Is £200,000 enough to retire on?

What £200,000 actually pays you

Spread from 60 to 95, with a full State Pension arriving at 67, £200,000 supports about £1,438 a month in today's money. Stop at 67 instead and it supports £1,825 a month.

That is not £200,000 divided by 35 years. It assumes the pot keeps growing while you draw on it, that the State Pension takes over £12,548 a year of the load from 67 (£241 a week in 2026/27), and that the last pound is spent around your 95th birthday rather than left behind.

From 67, most of your income is the State Pension. It pays £1,046 a month on its own, so the pot only provides £779 of the £1,825. On a pot this size your savings top up the State Pension, not the other way round - which is why your National Insurance record matters as much as your investments.

How long will a £200,000 pension last?

It depends on what you take out and when you start. From 60, £200,000 lasts to about 76 at £1,750 a month and to 71 at £2,000. Take £1,326 a month or less and it never runs out at all.

Why can a pot this size last for ever? Because once the State Pension starts, the pot only has to cover the part of your spending the State Pension does not. Below £1,326 a month from 60, or £1,552 a month from 67, growth plus the State Pension keep up with the withdrawals. Above that line, every extra £250 a month brings the end date years closer.

The same grid for other pot sizes is in How long will my pension last?, and the drawdown calculator at the top of this page draws the curve for your own numbers.

How £200,000 compares with the pots people actually retire on

It is a bigger pot than it feels. The median pension wealth of 55 to 64 year olds with a pension not yet being paid was £107,300 in the ONS's last count with an age breakdown (April 2018 to March 2020), so £200,000 is about 1.9 times the typical amount.

The FCA's data on pensions accessed for the first time in 2024/25 says the same. Of 961,575 plans, 17% were worth £100,000 or more and only 7% were worth £250,000 or more. Those are plans, not people - many retirees have several - but a £200,000 total still puts you well ahead of most.

In the £100,000 to £249,999 band that £200,000 sits in, 73% of plans went into drawdown (kept invested and drawn from as needed) and 17% bought an annuity. The rest were taken as cash, in one go or in chunks.

Is £200,000 enough for a moderate retirement?

No. The Retirement Living Standards from Pensions UK are the most widely used guide to what a UK retirement costs, and £1,438 a month from 60 is between the Pensions UK minimum (£1,150) and moderate (£2,725) standards for one person.

If you own your home outright and want a simple life - every need met, a little left for fun, no car - £200,000 does it from 60. A moderate retirement, with a car and a fortnight in Europe each year, needs a pot of about £587,216 from 60 or £430,682 from 67. No investment choice closes a gap that size, so on £200,000 the useful levers are when you stop and what you spend.

Can you retire at 55, 60, 65 or 67 with £200,000?

The same £200,000 pays very different amounts depending on when you start drawing it. Between 55 and 67 the difference is £578 a month, for life.

• At 55: £1,247 a month, between the Pensions UK minimum (£1,150) and moderate (£2,725) standards for one person, with 12 years to cover before the State Pension. And from 6 April 2028 most people cannot touch a pension until 57, so the first two years would have to come from other savings.
• At 57: £1,317 a month - the earliest most people can draw a pension from 6 April 2028.
• At 60: £1,438 a month. Workable for a simple retirement in a home you own. Add £900 a month of rent and it is not: a minimum lifestyle plus rent would need a pot of about £384,087.
• At 65: £1,695 a month, £257 more than at 60 for five more years of work. For a couple it is £2,650 a month, between the Pensions UK minimum (£1,875) and moderate (£3,775) standards for a couple.
• At 67: £1,825 a month with no gap to fill. The most this pot does for one person; £2,871 a month for a couple.

Each year you keep working between 60 and 67 is worth about £55 a month for the rest of your life. On a pot this size that is the lever most within your control.

Where £200,000 works, and where it does not

Three people with exactly the same pot, and three different answers. Housing and the age you stop do almost all of the work.

What £200,000 buys as an annuity instead

Everything above spends the pot down. The other option is to swap it for a guaranteed income for life. On 8 October 2026 the best rate for a single 65-year-old paid £8,172 a year for every £100,000, so £200,000 buys about £16,344 a year, or £1,362 a month.

At today's rates the inflation-linked annuity pays more than drawing the pot down yourself, because an insurer spreads the cost of long lives across everyone it pays. What drawdown keeps is flexibility, the chance of better growth, and money to leave behind. A common middle path is to buy an annuity that covers the essentials and keep the rest invested. How much annuity does £100,000 buy? explains the options.

£200,000 against the 4% rule

The 4% rule says £200,000 gives you £8,000 a year, or £667 a month. Our engine says £1,438 a month from 60. Both are right, because they answer different questions.

The 4% rule comes from US research into how much a portfolio could pay out and survive any 30-year period with money left. It ignores the State Pension, and in most periods it leaves money over at the end. Our figure adds £12,548 a year of State Pension from 67 and finishes at 95 with the pot at zero. Add the State Pension to the 4% figure and it becomes £1,713 a month from 67, so most of the gap is the State Pension the rule leaves out; the rest is the money the 4% rule expects to leave behind.

What moves £200,000 from tight to workable

Six changes that move the answer, and what each is worth against the £1,438 a month the pot supports from 60.

1. 1Work to 65 instead of 60: £257 a month moreThe most effective lever you fully control. Five more years takes what £200,000 supports from £1,438 to £1,695 a month, and stopping at 62 is worth £93 a month.
2. 2Find £500 a month of income that lasts: £500 a month moreA lodger, a small final salary pension, or rent from a property. Income that lasts as long as you do takes you to £1,938 a month from 60, because it is money the pot never has to produce.
3. 3Clear your housing costs before you stop£900 a month of rent or mortgage is 63% of everything £200,000 pays from 60. Clearing a mortgage or downsizing changes the answer more than any investment decision.
4. 4Plan as a householdA couple sharing £200,000 can spend £2,212 a month from 60 rather than £1,438, because two full State Pensions bring in £25,096 a year between them from 67.
5. 5Fill the gaps in your National Insurance record: a five-year gap costs £111 a monthThe full State Pension needs 35 qualifying years. On 30 years, £200,000 supports £1,327 a month from 60 instead of £1,438. On a pot where the State Pension is most of your income, gaps are expensive - and often cheap to fill. Checking is free on gov.uk.
6. 6Cut your feesWe assume 0.4% a year. On £200,000, paying 1% instead costs about £1,200 in the first year alone, and it is one of the few things here you can change this afternoon.

What you keep after tax

Until 67 the whole £1,438 a month comes out of the pot; from 67 only £392 does, and the State Pension pays the rest. Usually a quarter of a pension can be taken tax free - £50,000 on this pot - and the rest is taxed as income when you draw it.

Take the tax-free quarter as part of every withdrawal and the 2026/27 tax on £1,438 a month is about £6 a month before 67, because most of the taxable part fits inside the £12,570 personal allowance. From 67 the State Pension uses up almost all of that allowance, so tax on your £1,438 a month in total is about £58.

The assumptions behind £1,438 a month

Every figure here rests on a guess about growth and a guess about how long you live. Here is how much each one matters.

That is a range of £268 a month on the same £200,000, decided by something nobody controls. Because the State Pension makes up so much of the income, growth matters less on a pot this size than on a large one.

The ONS puts life expectancy at 65 at 21.2 more years for a woman and 18.7 for a man (2022 to 2024) - to about 86 and 84. Those are averages, so roughly half of us live longer than that. Planning to 95 costs £109 a month compared with planning to 85.

What this calculation leaves out

• Bad timing in the markets. A steady £1,438 a month assumes steady growth. A fall in the first few years hurts more than the same fall later, because you are selling investments to live on while they are cheap. Keeping a year or two of spending in cash is the usual defence.
• The years before the State Pension. Spending £1,500 a month from 60 takes the pot down to about £95,131 by 67. From then on it only has to find £454 a month, which is why it lasts so long afterwards.
• Final salary pensions. Any defined benefit pension is income the pot never has to produce, and changes every figure here for the better.
• Care costs. Care in later life can cost tens of thousands of pounds a year, and none of these figures include it.

How to check your own numbers

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.

• £100,000£1,105/mo
• £200,000This guide£1,438/mo
• £250,000£1,604/mo
• £300,000£1,770/mo
• £400,000£2,102/mo
• £500,000£2,435/mo
• £750,000£3,266/mo
• £1 million£4,096/mo
• £1.5 million£5,758/mo
• £2 million£7,420/mo

Frequently asked questions