Blog · Pension pots

Is £1 million enough to retire on?

It buys a comfortable retirement from 57. It also sits just under the point where a pension stops paying out anything more tax free, and close to the line where drawing it tips into 40% tax. This guide is about those two lines.

Adam Akhlaq21 September 202617 min readUpdated 29 October 2026

The short answer

Yes, comfortably, from 57. £1,000,000 supports about £4,096 a month before tax from 60 to 95, alongside a full State Pension from 67, or £4,945 a month if you stop at 67: past the Pensions UK comfortable standard of £3,775 for one person. The harder question is tax. A quarter of the pot, £250,000, can come out tax free, only £18,275 under the £268,275 cap, and the way you draw the rest decides whether any of it is taxed at 40%.

Moderate£2,725Comfortable£3,775from 55£3,678from 60£4,096from 67£4,945

← Minimum £1,150

of growth before £1,000,000 reaches the tax-free cap: about 19 months, left untouched: £73,100
the spending above which some income is taxed at 40%, once the tax-free cash is spent: £4,189 a month
when drawing £4,096 a month from 60, a quarter tax free, uses up the allowance: Age 80

Try it with your numbers

See how long £1,000,000 would last for you

Prefilled with £1,000,000 from age 60 at £4,000 a month, which lasts to 96. Push the spending to £5,000 and it is gone at 84; pull it back under £3,228 and it never empties at all. The spending is before tax, and on a pot this size the tax is the part worth planning.

Your numbers

Pot at retirement£1,000,000

Everything you'll draw on: pensions, SIPPs, ISAs combined, in today's money.

Age you retire60

Monthly spending£4,000

In today's money. A moderate single lifestyle is roughly £2,725 a month (PLSA 2026).

Growth scenario in retirement

Prefer the full page? Open the pension drawdown calculator.

Where £1 million lands: comfortable, and close to the cap

£1,000,000 is not an income, so start by turning it into one. Spread from 60 to 95, with a full State Pension arriving at 67, it supports about £4,096 a month in today's money, or £49,152 a year, before income tax.

That clears all three Pensions UK standards for one person, with £321 a month to spare over their comfortable £3,775. It first clears comfortable if you stop at 57, on £3,831 a month, and misses it at 55 by £97. For one person who owns their home, that settles "is it enough".

Where £4,096 a month - £1,000,000 from 60 - sits against the standards for one person

Standard	Monthly cost	Does £1,000,000 reach it from 60?
Minimum: all your needs, with a little left over for fun, but no car	£1,150	Yes, with £2,946 to spare
Moderate: more financial security and flexibility, a car, and a two-week holiday in Europe	£2,725	Yes, with £1,371 to spare
Comfortable: more financial freedom, some luxuries, and regular beauty treatments or theatre trips	£3,775	Yes, with £321 to spare

The standards are for one person outside London and assume no rent and no mortgage. Our column is the Balanced scenario, spending the pot down by 95, before tax.

So the question changes. A quarter of £1,000,000, £250,000, can usually come out tax free, and the most anyone can take tax free across all their pensions is £268,275: a quarter of £1,073,100, £73,100 more than you have. Everything else is taxed as income, so the rest of this guide is about the cap, the 40% band, and the order you draw your money in.

Every pot at every age, side by side. What each pot pays from 55 to 67, and the assumptions behind every figure, on one page.Pension pot sizes compared →

Can you retire at 55, 60, 65 or 67 with £1 million?

Yes at every one of those ages. From 65, what you do with the tax-free cash decides whether any of the income is taxed at 40%.

What £1,000,000 supports each month to age 95, by the age you stop

You stop at	One person	A couple	Bridge years
Age 55	£3,678 a month	£4,318 a month	12
Age 57	£3,831 a month	£4,520 a month	10
Age 60	£4,096 a month	£4,870 a month	7
Age 62	£4,301 a month	£5,140 a month	5
Age 65	£4,660 a month	£5,615 a month	2
Age 67	£4,945 a month	£5,990 a month	0

Before tax. The couple column assumes two full State Pensions from 67 and one shared pot. Bridge years are the years you fund with no State Pension at all.

At 55: £3,678 a month, £953 over the moderate standard and £97 under comfortable. From 6 April 2028 the earliest you can touch a pension is 57, so unless your scheme gives you a protected pension age of 55, retiring at 55 after that means funding the first two years from ISAs or other savings.
At 60: £4,096 a month, comfortable with £321 to spare. However you take the tax-free cash, none of it reaches the 40% band at these figures.
At 65: £4,660 a month, or £5,615 for a couple against a comfortable couple standard of £5,225. A quarter of each withdrawal tax free keeps it under the 40% line until about 84. After that, or sooner if you live on the tax-free cash first, every pound is taxable and £471 a month of the same spending is over the 40% line.
At 67: £4,945 a month with no bridge at all, or £5,990 for a couple. A quarter of each withdrawal tax free keeps it in the basic-rate band until about 85; once the tax-free cash is spent, £756 a month is over the 40% line.

The lump sum allowance: £268,275 and no more

Since April 2024 the most anyone can take tax free from all their pensions together is £268,275, the lump sum allowance. A quarter of £1,000,000 fits under it with £18,275 to spare. A quarter of anything over £1,073,100 does not.

At 5% growth less 0.4% fees, a £1,000,000 pension left untouched passes £1,073,100 in about 19 months, so anyone still paying in, or simply not drawing yet, should plan as if they are over it. The allowance is also a fixed sum of cash with no built-in inflation increase: after 20 years of 2.5% inflation, £268,275 buys what about £164,000 does today.

What the cap means for £1,000,000, by how you take the tax-free cash

How you take it	Tax-free cash	After that
The whole quarter now, the rest into drawdown	£250,000	Later growth is all taxable
A quarter of each withdrawal, as you go	Up to £268,275	Tax-free until about 80, then taxed in full
Leave it to grow past £1,073,100 first	£268,275	Growth past the cap is all taxable

Slices run out at about 80 on the £4,096-a-month plan from 60. Taken up front, the £18,275 of allowance left over can only cover tax-free cash from other pension savings. Tax-free cash taken from any pension since April 2024 counts against the allowance. Pensions you started drawing before then usually reduce it by a quarter of the lifetime allowance they used, unless you get a transitional tax-free amount certificate showing the cash actually taken. If you hold lifetime allowance protection, your allowance may be higher.

Taking the cash as you go reaches the full £268,275 even if you start drawing now, because the pot keeps growing while you draw on it, but it has an end date. Once the allowance is used up at about 80, tax on the same £4,096 a month rises from £457 to £610. Choosing between slices and a lump sum up front is covered in the £750,000 guide; at this size the cap adds one more point for slices, since taking a quarter now stops at £250,000.

If contributions push you over, there is no penalty: the lifetime allowance charge went in April 2023 and the allowance itself in April 2024. Money paid in above the cap still gets tax relief on contributions up to 100% of your earnings, and a tax charge only applies above the £60,000 annual allowance, which is lower for very high earners. What it loses is the tax-free quarter on the way out. In an ISA, by comparison, money comes out as it went in.

What £100 paid into a pension costs and pays back

Your tax rate	Costs you	Comes out as
40% now, 20% later, above the cap	£60	£80
20% now and later, above the cap	£80	£80
20% now and later, below the cap	£80	£85

The first row needs the whole gross contribution to fall within income taxed at 40%, and in a relief-at-source scheme the extra relief has to be claimed through Self Assessment. Salary sacrifice also saves National Insurance, and an employer contribution costs you nothing, which tips the basic-rate rows towards the pension.

If you are still working

Taking taxable money from a pension flexibly, including a withdrawal that is a quarter tax free, cuts what you can pay into defined contribution pensions without a tax charge to £10,000 a year. Taking only the tax-free cash does not.

A second cap, for what you leave behind

The lump sum and death benefit allowance of £1,073,100 covers the tax-free cash you take in life plus any tax-free lump sums paid to your beneficiaries if you die before 75. Above it, a lump sum paid on death is taxed as the beneficiary's income.

When drawing £1 million crosses into 40% tax

With a quarter of each withdrawal tax free, spending stays in the basic-rate band up to £5,585 a month before 67 and £5,237 from 67, which covers what £1,000,000 supports at every stopping age. That lasts only while the tax-free cash does. Once it is spent, for example after living on it first, or once the slices have used up the allowance, every pound you draw is taxable and the line drops to £4,189 a month.

The line falls at 67 because the State Pension is taxed in full. At £12,548 a year in 2026/27 it uses all but £22 of the £12,570 personal allowance on its own, so from 67 the taxable part of every pension withdrawal is taxed at 20% from almost its first pound.

2026/27 income tax a month on spending drawn from a pension

A month	Before 67	From 67	Cash spent
£3,000	£241	£293	£391
£4,000	£391	£443	£591
£4,096	£405	£457	£610
£4,945	£532	£585	£931, some 40%
£5,000	£541	£593	£953, some 40%
£6,000	£753, some 40%	£857, some 40%	£1,353, some 40%

Spending is before tax. "Before 67" and "From 67" take a quarter of each withdrawal tax free; "Cash spent" is from 67 once the tax-free cash is spent, so every pound is taxable. £1,000,000 supports £4,096 from 60 and £4,945 from 67. From 67 spending includes the State Pension of £1,046 a month. Personal allowance £12,570, basic rate 20% to £50,270, then 40%. Scottish rates differ.

Above the line, each extra £100 from the pension costs £30 in tax with a quarter tax free, or £40 without, instead of £15 or £20 below it. The "Cash spent" column is where the as-you-go route ends up once the allowance is used up: about 80 on the plan from 60, which stays under the line even then, and about 85 on the plan from 67, which then has £756 a month over it.

The 60% band, for one big year

A single large withdrawal can push one year's income past £100,000. Above £100,000 you lose £1 of personal allowance for every £2 of income, and it is gone by £125,140, which taxes that slice at 60%. Taking an extra £100,000 at 67, on top of £4,945 a month and with a quarter tax free, costs £34,003 in tax in one tax year. Split half each side of 6 April and it costs £28,948, £5,055 less; paying part from ISAs cuts it further.

Drawing order: which money to spend first

Most people with £1,000,000 hold it in more than one place: pensions, ISAs, and savings. The order you spend them in changes how much of the pension comes out at 20% rather than 40%.

Pension up to the line, ISAs above itISA withdrawals are tax free and do not count as income. From 67, while a quarter of each pension withdrawal is tax free, draw the pension up to £5,237 a month and take anything above that from ISAs. Spending £6,000 a month, the £763 above the line would cost £229 a month in tax from the pension and nothing from an ISA.
Use your personal allowance every year before 67Living on ISAs or cash before the State Pension and leaving the pension untouched wastes up to £12,570 a year of allowance and leaves a bigger pension to draw later, on top of a State Pension that has already used the allowance. Drawing at least enough from the pension to fill it is usually right. From 6 April 2027 unused pensions also count for inheritance tax, which weakens the old "spend the pension last" advice further; that trade-off is the subject of the £1.5 million guide.
Draw from two people, not oneA couple has two personal allowances and two basic-rate bands, so the same money drawn from two pensions has twice the room under each line. Pensions cannot be moved between spouses, so even them up while you are both still paying in.

How much income does £1 million give?

It depends what you want to happen to the pot: spend it down by 95, draw it so it never runs out, or hand it to an insurer for a guaranteed income.

spent down by 95, from 60

£4,096 a month

£49,152 a year, including the State Pension from 67. Tax is about £405 a month before 67 and £457 after.

never runs out, from 60

£3,228 a month

Growth and the State Pension cover the withdrawals, and something is left to pass on. The 4% rule's £3,333 a month lands close by, because on a pot this size the State Pension the rule ignores is a small part of the answer.

inflation-linked annuity at 65

£4,637 a month

The best single-life rate on 8 October 2026, pro rata, rising with RPI for life: £931 a month more than the £3,706 the pot alone supports from 65 to 95. The State Pension comes on top.

An annuity is taxed in full, like the State Pension, and if you take the tax-free cash first you buy it with £750,000, so it pays three quarters of that figure. Rates change weekly.

How long will £1 million last?

From 60, £1,000,000 lasts to 84 at £5,000 a month and to 78 at £6,000; below £3,228 a month it is never exhausted.

The age £1,000,000 runs out, by monthly spending and the age you stop

A month	Stop at 60	Stop at 65	Stop at 67
£3,000	Never	Never	Never
£3,500	Beyond 100	Beyond 100	Never
£4,000	96	Beyond 100	Beyond 100
£5,000	84	91	94
£6,000	78	85	87

Full State Pension from 67. Spending is before tax, in today's money, and rises with inflation each year. "Never" means the pot still has money at 120.

At £6,000 a month, tax and longevity pull the same way: part of it is taxed at 40% from 60, and the pot is gone by 78. Every pot size is in How long will my pension last?.

Still building the pot? Work backwards from spending to the age you could afford to stop.

See your retirement age →

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How rare a £1 million pension is

Rare. The FCA's data on pots being accessed stops counting at £250,000, and only 7% of the 961,575 plans accessed for the first time in 2024/25 were even that large.

In the ONS's last full survey (April 2018 to March 2020), the tenth of the population with the most private pension wealth had a median of £637,500, and the median pension among 55 to 64 year olds who have one was £107,300. Both are per person, and so is the cap.

Check your own numbers

Step 1

Add up every pot, by wrapper

Pensions, SIPPs and ISAs, recorded separately: on a pot this size the split between them decides the tax bill.

Step 2

Check your lump sum allowance

Ask each provider how much tax-free cash you have taken and whether you hold any protection. The rules are on gov.uk.

Step 3

Get your State Pension forecast

Free on gov.uk. It uses up your personal allowance, so it sets where your 40% line falls.

Step 4

Run your spending, then the tax on it

Try your budget in the drawdown calculator. Above £5,237 a month from 67, decide which part comes from ISAs.

The figures every pot guide shares

Every figure here uses the same assumptions as the other pot guides: 5% growth, 2.5% inflation and 0.4% fees, a full State Pension from 67, and a pot spent down by 95, all in today's money and before tax. Pension pot sizes compared sets them out once, alongside every pot at every age.

On cautious growth £1,000,000 supports £3,252 a month from 60, on adventurous £5,088. With a State Pension age of 68 it supports £4,060 from 60 rather than £4,096. Planning to 95 rather than 85 costs £850 a month; the ONS puts life expectancy at 65 at 21.2 more years for a woman and 18.7 for a man (2022 to 2024), and half of us outlive the average. The tax figures use 2026/27 bands held flat in today's money, but the thresholds are frozen in cash terms until April 2031, so in real terms the 40% line falls a little each year until then.

Compare other pot sizes

Stop work at 60 and spend this much a month until 95, on the same assumptions as this guide. Each pot has its own full guide.