Blog · Pension pots
Is £250,000 enough to retire on?
It clears the minimum and misses moderate. Where you land between the two comes down to one thing more than any other: whether you still pay for a home.
The short answer
Enough for the minimum, not for moderate. £250,000 supports about £1,604 a month from 60 to 95 with a full State Pension from 67: £454 over the Pensions UK minimum and £1,121 under moderate. Own your home outright and that is a modest but workable retirement. Pay £900 a month in rent and you would need about £384,000 just to reach the minimum.
- above the minimum standard, from 60
- £454 a month
- short of a moderate retirement, from 60
- £1,121 a month
- the pot you would need for the minimum from 60 while paying £900 rent
- £384,000
Try it with your numbers
See how long £250,000 would last for you
Prefilled with £250,000 from age 60 at £1,600 a month. Push the spending to £2,000 and the pot empties at 77; pull it back under £1,445 and it never empties at all. Between those two numbers is every decision this article is about.
Your numbers
Prefer the full page? Open the pension drawdown calculator.
Where £250,000 lands: past the minimum, short of moderate
£250,000 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 £1,604 a month in today's money, or £19,248 a year.
That puts it between the first two Pensions UK standards, much nearer the minimum: £454 a month above their minimum of £1,150, and £1,121 below their moderate £2,725. In a home you own outright that is a minimum-plus retirement: every need met and a little over, but no car and no regular holidays abroad. The rest of this guide is about that gap, because at this size it is the whole question.
| Standard | Monthly cost | Does £250,000 reach it from 60? |
|---|---|---|
| Minimum: all your needs, with a little left over for fun, but no car | £1,150 | Yes, with £454 to spare |
| Moderate: more financial security and flexibility, a car, and a two-week holiday in Europe | £2,725 | No, £1,121 short |
| Comfortable: more financial freedom, some luxuries, and regular beauty treatments or theatre trips | £3,775 | No, £2,171 short |
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.
Much of that income is the State Pension. From 67 it pays £1,046 a month on its own, so of the £2,020 this pot supports if you stop at 67, only £974 comes from the pot. On £250,000 your savings are a top-up to the State Pension, not the other way round.
If you have read that £250,000 cannot fund any retirement, that is usually the 4% rule, which says it pays £833 a month and leaves the State Pension out entirely.
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 →Retiring at 55, 60, 65 or 67: how big the gap is
Stopping later narrows the gap to moderate but never closes it: £1,326 a month short from 55, £1,121 from 60, £845 from 65 and £705 from 67.
| You stop at | One person | A couple | Bridge years |
|---|---|---|---|
| Age 55 | £1,399 a month | £1,956 a month | 12 |
| Age 57 | £1,474 a month | £2,163 a month | 10 |
| Age 60 | £1,604 a month | £2,377 a month | 7 |
| Age 62 | £1,705 a month | £2,544 a month | 5 |
| Age 65 | £1,880 a month | £2,835 a month | 2 |
| Age 67 | £2,020 a month | £3,066 a month | 0 |
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: £1,399 a month, £249 above the minimum, with 12 bridge years to fund first. A minimum retirement with little margin, and from 6 April 2028 the earliest you can touch a pension is 57, so stopping at 55 after that needs ISAs or other savings for the first two years.
- At 60: £1,604 a month, £454 over the minimum and £1,121 short of moderate. Workable in a home you own outright; rent changes the answer, as the next section shows.
- At 65: £1,880 a month, £276 more than at 60 for five more years of work, and £845 short of moderate. For a couple it is £2,835 a month, against a moderate couple standard of £3,775.
- At 67: £2,020 a month with no bridge at all. The closest this pot gets to moderate for one person, and still £705 short. For a couple it is £3,066 a month.
Most of that narrowing is the bridge: the years before the State Pension when the pot pays for everything alone. Stop at 60 and it is down to about £143,000 by 67, after which it only has to find £558 a month. Each year you wait is worth roughly £59 a month for life, so even at 67 the gap to moderate is still £705.
If your State Pension age is 68
Anyone born from April 1978 onwards waits an extra year, which is one more year of the pot working alone. On these assumptions £250,000 then supports £1,568 a month from 60 rather than £1,604. Your own State Pension age is free to check on gov.uk.
Housing decides which side you are on
Both standards assume you own your home outright, and on this pot that assumption decides the answer. From 60, £250,000 has £454 a month to spare over the minimum, and rent comes out of that first, for life.
| Rent | Left to live on | Vs minimum | Pot needed |
|---|---|---|---|
| None | £1,604 | £454 over | £113,000 |
| £300 | £1,304 | £154 over | £204,000 |
| £600 | £1,004 | £146 short | £294,000 |
| £900 | £704 | £446 short | £384,000 |
Monthly figures from 60 to 95 in today's money, with a full State Pension from 67. The last column is the pot that would cover the Pensions UK minimum of £1,150 plus that rent, to the nearest £1,000.
Above £454 a month of rent, the answer flips from yes to no. Paying £900, a minimum retirement from 60 takes about £384,000, 54% more than you have. Even stopping at 67, the same rent leaves £1,120 a month, £30 short of the minimum. A mortgage is different, because it ends: clear it before you stop and the whole pot goes back to living on.
Owns their home outright, stops at 67
Enoughfor a minimum-plus retirement
With no housing costs, £250,000 supports £2,020 a month from 67: £870 past the minimum, £705 short of moderate. Every need covered, most wants covered, and a car only if something else gives.
Still renting at £900 a month, wants to stop at 60
Not enough£446 a month short of even a minimum life
A minimum lifestyle plus rent is £2,050 a month, and £250,000 supports £1,604 from 60. Housing is the thing to fix, or the retirement date is.
Has £40,000 left on a mortgage, stops at 60
Enoughif the tax-free cash clears it first
Using £40,000 of the £62,500 tax-free cash to clear the mortgage leaves £210,000, which supports £1,471 a month from 60 with no housing cost: £321 over the minimum. The catch is that the tax-free cash is spent, so more of every later withdrawal is taxed.
What closes the gap: later, longer, or less
Reaching moderate would take a pot of about £587,000 at 60, or £431,000 at 67. No investment choice makes up that difference, so the levers that work change when you stop, how long other income lasts, or how much you spend.
- Stop later: £276 a month more at 65The least popular lever and the most effective one you fully control. Five more years takes what £250,000 supports from £1,604 to £1,880 a month, and a partial version works too: stopping at 62 is worth £101 a month.
- Keep some income going for longer: £500 a month closes 45% of the gapA lodger, a small final salary pension, or a rental. Income that lasts as long as you do is worth pound for pound, because the pot never has to produce it: £500 a month takes you to £2,104 a month from 60. Part-time work that stops at 67 is worth less over a lifetime, but it does the one job that matters most: it stops you selling investments during the bridge years.
- Fill the gaps in your National Insurance record: £110 a monthThe full State Pension needs 35 qualifying years. On 30 years, £250,000 supports £1,494 a month from 60 instead of £1,604: a permanent cut for something that is often cheap to fix, and it bites hardest on a pot where the State Pension is more than half the income. Checking is free on gov.uk.
- Cut your feesWe assume 0.4% a year. Paying 1% instead is a drag on every year of a 35-year drawdown, and it is one of the few things on this list you can change this afternoon and never think about again.
How long will £250,000 last?
The last lever is spending less. Fix the spending and ask how far the pot stretches instead: from 60, £250,000 lasts to 77 at £2,000 a month and to 70 at £2,500, while stopping at 65 makes the same £2,000 a month last to 90.
| Monthly spending | Stop at 60 | Stop at 65 | Stop at 67 |
|---|---|---|---|
| £1,500 a month | Beyond 100 | Never runs out | Never runs out |
| £1,750 a month | Age 85 | Beyond 100 | Beyond 100 |
| £2,000 a month | Age 77 | Age 90 | Age 95 |
| £2,500 a month | Age 70 | Age 80 | Age 84 |
| £3,000 a month | Age 67 | Age 75 | Age 79 |
Full State Pension from 67. Spending is in today's money and rises with inflation each year. "Never runs out" means the pot still has money at 120.
Below £1,445 a month from 60, or £1,680 a month from 67, the pot is never exhausted, because growth plus the State Pension cover the withdrawals. The same grid for every pot from £100,000 to £1,000,000 is in How long will my pension last?.
Still building the pot? Work backwards from spending to the age you could afford to stop.
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What £250,000 buys as an annuity
Everything above spends the pot down. The other option is to hand it to an insurer for a guaranteed income, and on 8 October 2026 the best single-life rate for a 65-year-old paid £8,172 a year per £100,000. Pro rata, £250,000 buys about £20,430 a year, or £1,703 a month.
level annuity at 65, single life
£1,703 a month
Guaranteed for life, but fixed: after 20 years of 2.5% inflation it buys 39% less than it did on day one.
inflation-linked annuity at 65
£1,159 a month
Rises with RPI each year, so it is the like-for-like comparison with our today's-money figures: it pays £232 a month more than the £927 the pot alone supports from 65 to 95. The State Pension comes on top of either from 67.
joint-life level annuity at 65
£1,595 a month
Pays half to a spouse three years younger for the rest of their life, for £108 a month less than the single-life version.
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, while drawdown has to plan for every single person reaching 95. What drawdown keeps is flexibility, the chance of better growth, and money to leave behind. Most people with a pot around this size choose drawdown: only 6% of plans of £250,000 or more accessed in 2024/25 bought an annuity, and 17% of those just below, from £100,000 to £249,999. The common middle path is to annuitise enough to cover the essentials and draw down the rest.
Annuity rates move
The quotes above are Hargreaves Lansdown's best-buy rates on 8 October 2026, for an average postcode and a £100,000 pot. Rates track gilt yields and change weekly, larger pots sometimes get slightly better terms, and health conditions or smoking raise them. Get a live quote before you decide anything.
What it costs in tax
Until 67 the whole £1,604 a month comes out of the pot; from 67 only £558 does, and the State Pension pays the rest. Usually a quarter of a pension can be taken tax free, £62,500 on this pot, and the rest is taxed as income when you draw it.
Take the tax-free quarter as a slice of every withdrawal and the 2026/27 bill on £1,604 a month is about £31 a month before 67, because most of the taxable part sits inside the £12,570 personal allowance. From 67 the State Pension uses up almost all of that allowance itself, so tax on your £1,604 a month in total is about £83. Neither figure comes near the higher-rate band; on a pot this size income tax is a rounding error next to housing and the stopping age. Taking a lump sum to clear a mortgage, as in the example above, raises it a little.
Is £250,000 a good pension pot?
Good is not the same as enough. Of the 961,575 pension plans accessed for the first time in 2024/25, only 7% were £250,000 or more, and 83% were under £100,000.
| Pot size | Plans accessed | Share |
|---|---|---|
| £250,000 and above | 67,934 | 7% |
| £100,000 to £249,999 | 92,968 | 10% |
| £50,000 to £99,999 | 116,980 | 12% |
| £30,000 to £49,999 | 101,392 | 11% |
| £10,000 to £29,999 | 220,302 | 23% |
| Less than £10,000 | 361,999 | 38% |
FCA retirement income market data. These are plans, not people: someone with three old workplace pensions appears three times, so the share of retirees with £250,000 in total is higher than the share of plans.
The ONS tells the same story. In its last survey with an age breakdown (April 2018 to March 2020), the median pension not yet in payment among 55 to 64 year olds who had one was worth £107,300. £250,000 is 2.3 times that, and still short of moderate.
The FCA data also shows how hard people lean on pots just below this size. Among £100,000 to £249,999 plans in drawdown taking a regular income, 34% were withdrawing 8% a year or more. On £250,000 that is £1,667 a month, close to the £1,604 our engine says spends the pot down to nothing by 95 from 60. That rate only works if the State Pension is genuinely coming and you genuinely mean to spend the pot.
Check your own numbers
Step 1
Add up every pot you have
Old workplace pensions, the current one, SIPPs and ISAs. Most retirees have more than one, and £250,000 across three pots is exactly as good as £250,000 in one.
Step 2
Get your State Pension forecast
Free on gov.uk. On a pot where the State Pension is more than half the income it is the single most important number in the plan, and a five-year gap in your record costs about £110 a month for life.
Step 3
Set spending to your real budget, housing included
Then run it in the drawdown calculator and look at the depletion age, not the monthly figure. If it lands before 90, the plan needs a change somewhere.
Step 4
Work out what another few years is worth
Put your real numbers into the retirement age calculator. On £250,000 the stopping age moves the answer more than anything else you control, and seeing the date move is more persuasive than reading that it does.
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.
Frequently asked questions
Is £250,000 enough to retire on?
Enough for the minimum if you own your home, and not enough for moderate at any age. £250,000 supports about £1,604 a month in today's money from 60 to 95, or £2,020 a month from 67, alongside a full State Pension. That is above the Pensions UK minimum of £1,150 and £705 to £1,121 a month below their moderate £2,725.
Is £250,000 enough to retire on if I rent?
Not from 60 on rent of £900 a month. £1,604 less rent leaves £704, £446 short of the minimum, and reaching the minimum would take a pot of about £384,000. Stopping at 67 leaves £1,120 a month after the same rent.
Can I retire at 55 with £250,000?
Only for a minimum retirement with little margin. It supports about £1,399 a month to 95, £249 above the Pensions UK minimum, and you would fund 12 years before any State Pension. From 6 April 2028 the earliest you can access a pension is 57, so retiring at 55 after that also needs ISAs or other savings for the first two years.
Can I retire at 60 with £250,000?
Yes if you own your home and a modest lifestyle is enough: it supports £1,604 a month to 95, with 7 years funded by the pot alone before the State Pension starts. Add rent and it stops working: a minimum lifestyle plus £900 of rent would need a pot of about £384,000.
Can I retire at 65 with £250,000?
Yes, more comfortably than at 60: £1,880 a month to 95 for one person, £2,835 for a couple with two full State Pensions, with only 2 bridge years to fund. It is still £845 a month short of the moderate standard for one person.
Can I retire at 67 with £250,000?
Yes, and it is the best of the ages here: £2,020 a month to 95 with the State Pension starting the same day, or £3,066 a month for a couple. The pot's own share of that is only £974 a month; the rest is the State Pension.
How long will £250,000 last in retirement?
Drawing from 60 with the State Pension from 67: it lasts to 83 at £1,800 a month, to 77 at £2,000 and to 70 at £2,500. Below about £1,445 a month it is never exhausted, because growth and the State Pension cover the withdrawals. Every pot size and spending level is in How long will my pension last?.
How much income will £250,000 give me?
About £1,604 a month, £19,248 a year, if you stop at 60 and spend the pot down by 95, including the State Pension from 67, rising to £2,020 a month from 67. As an annuity at 65, the best single-life rate on 8 October 2026 would pay about £20,430 a year fixed, or £13,910 a year rising with inflation, guaranteed for life, with the State Pension on top from 67.
Is £250,000 enough for a couple to retire on?
It goes further for a couple, not less far: two full State Pensions are £25,095 a year of income no pot has to produce. A shared £250,000 supports about £2,377 a month from 60 or £3,066 from 67, against a minimum couple figure of £1,875 and moderate £3,775.
Is £250,000 a good pension pot?
By the numbers, yes. Only 7% of the 961,575 pension plans accessed for the first time in 2024/25 were £250,000 or more, and the ONS median pension among 55 to 64 year olds with one not yet in payment was £107,300. Good is not the same as enough: it funds a minimum-plus retirement, not a moderate one.
How much tax will I pay on a £250,000 pension?
Usually a quarter, up to £62,500, can be taken tax free, and the rest is taxed as income at your normal rates, with the £12,570 personal allowance applying in 2026/27. Drawing £1,604 a month with a quarter of each withdrawal tax free costs about £31 a month in tax before 67. From 67 the State Pension pays all but £558 of it and uses up the allowance, and tax on the same £1,604 in total is about £83 a month.
Do these figures account for inflation?
Yes. Every figure is in today's money: we subtract inflation from growth, so £1,604 a month means the lifestyle £1,604 buys today, in every year of the plan. The amount you actually withdraw would rise each year to keep pace.
Sources
- The new State Pension: what you'll get · GOV.UK
- Check your State Pension forecast · GOV.UK
- Tax when you get a pension · GOV.UK
- Retirement Living Standards · Pensions UK (formerly the Pensions and Lifetime Savings Association)
- Retirement income market data 2024/25 · Financial Conduct Authority
- Saving for retirement in Great Britain: April 2018 to March 2020 · Office for National Statistics
- National life tables - life expectancy in the UK: 2022 to 2024 · Office for National Statistics
- Best annuity rates · Hargreaves Lansdown
Keep going
This article is guidance, not financial advice. Every figure is produced by the same engine that powers our free calculators, stated in today's money on the assumptions named above, and checked against 2026/27 rates; the external statistics are quoted with their dates and sources. Tax is simplified to the UK-wide bands and ignores Scottish rates. Your own position will differ - if a decision this size is close, speak to a regulated financial adviser.