What is a good pension pot?

According to the Saltus Wealth Index Report (a biannual survey of over 2,000 individuals with £250,000 or more in investable assets), 60% believe they will need over £50,000 annually in retirement, regardless of marital status. Notably, more than 1 in 5 anticipate needing over £70,000 per year.[2]

In short, while the PLSA retirement living standards and the Saltus Wealth Index offer helpful benchmarks, what truly defines a ‘good’ pension pot comes down to your individual circumstances and goals.

How to determine how much you need in retirement?

So, how can you figure out how much you need for retirement?

A common starting point is the 4% rule, which suggests withdrawing 4% of your portfolio annually to make your savings last around 30 years.[3] For instance, if you want £80,000 a year gross, you’d need roughly £2 million in your pension pot.

However, this is only a benchmark, not a guarantee. Market fluctuations, inflation, tax, and lifestyle choices can all affect outcomes. These variables can make a simple rule inadequate.

That’s why cashflow planning and professional advice are essential. Modelling projects your income, spending, and investment growth under different scenarios like market downturns or inflation spikes, giving you better clarity and confidence. A financial planner can refine this further, ensuring tax efficiency, adjusting for changing circumstances, and incorporating estate planning.

The Financial Conduct Authority does not regulate cashflow modelling.

A simple cash flow plan may look similar to the image below:

How to make sure you’re saving enough for retirement?

Understanding your retirement target is only half the battle; the real challenge can be ensuring you’re on track. A pension calculator can be an excellent starting point, helping you estimate whether your current contributions and investment strategy will deliver the income you need later in life.

For those seeking more tailored insight, the Saltus pension calculator goes a step further. It doesn’t just provide a personalised projection based on your income needs, lifestyle expectations, and retirement horizon, it also draws on data from the Saltus Wealth Index, a biannual survey of over 2,000 individuals with £250,000 or more in investable assets. This unique feature offers benchmarks on average pension pot sizes, contribution levels, and retirement expectations among people in a similar financial position.

By using the Saltus pension calculator, you can see how your plans compare to others with similar wealth profiles, identify potential shortfalls, and explore how adjustments, such as increasing contributions or changing your retirement age, could impact your future. While calculators provide valuable insight, combining them with professional advice ensures your plan is robust and aligned with your long term goals.

Pension Calculator | Estimate your UK retirement income | Saltus

What is a good pension pot?

Remember, your pension pot is often just one piece of the puzzle. Your retirement income may also come from other sources such as the State Pension, ISAs, investment portfolios, property holdings, or more sophisticated structures like offshore bonds, trusts, and family investment companies. These solutions can be highly effective, but they are complex and should be considered with professional guidance. Having them won’t ensure retirement success, rather the real value lies in how these components work together.

By coordinating income streams across different wrappers, you can optimise tax efficiency and ensure your plan supports both your lifestyle and long term objectives. This integrated approach can be useful in maintaining flexibility and resilience as circumstances evolve.

Ultimately, there is no universal figure that defines a ‘good’ pension pot because it depends on a number of factors. While pensions often form the foundation of retirement planning, they are only one element of a broader financial strategy.