# Is £250,000 enough to retire on?

> £250,000 is more than most people retire with and less than a moderate retirement costs. That makes it the hardest pot to give a straight answer for, so here is the answer at every age instead.

**Question:** Is £250,000 enough to retire on?

**Answer:** Enough for a minimum-plus retirement, not a moderate one. £250,000 supports about **£1,604 a month** in today's money from 60 to 95, alongside a full State Pension from 67, or **£2,020 a month** if you stop at 67. Both clear the PLSA's minimum standard of £1,150; both fall short of their moderate £2,725, by £1,121 a month at 60 and £705 at 67.

- Author: Adam Akhlaq, founder of MyRetireAge
- Published: 2026-09-21
- Updated: 2026-09-21
- Canonical URL: https://myretireage.com/blog/is-250000-enough-to-retire-uk

## Key figures

- **£1,604 a month** - what £250,000 supports from 60 to 95
- **£2,020 a month** - what the same pot supports if you stop at 67
- **£705 a month** - short of the PLSA's moderate standard, even from 67
- **7%** - of pension pots accessed in 2024/25 were £250,000 or more

**Interactive: [See how long £250,000 would last for you](https://myretireage.com/pension-drawdown-calculator-uk?pot=250000&spend=1600)** - 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.

## What £250,000 actually pays you

£250,000 is not an income, and the honest answer to "is it enough" starts 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.

That is not £250,000 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 ninety-fifth birthday rather than left behind. Stop later and all three work harder for you: from 67 the same pot supports £2,020 a month.

- **£1,604 a month** - if you stop at 60. £19,248 a year, with 7 years funded by the pot alone before the State Pension starts.
- **£2,020 a month** - if you stop at 67. Seven more years of growth, seven fewer years of spending, and no gap to bridge.
- **£2,377 a month** - for a couple, from 60. Same £250,000, but two full State Pensions worth £25,095 a year join at 67.

Notice how much of that is the State Pension. From 67 it pays £1,046 a month on its own, so the pot's share of the £2,020 is only £974. On a pot this size the State Pension is not a top-up to your savings; your savings are a top-up to it. Spend £1,445 a month or less from 60 and the pot is never exhausted at all.

## How £250,000 compares with the pots people actually retire on

It is a bigger pot than it feels. 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.

*Pension plans accessed for the first time in 2024/25, by size*

| 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 from the other direction. 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, and across everyone approaching State Pension age - including the many with nothing - the median was £37,600. £250,000 is 2.3 times the first figure and 6.6 times the second.

The FCA data also shows what people do with pots like this. 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. It is a sustainable rate only if the State Pension is genuinely coming and you genuinely mean to spend the pot; as a rate to hold for life it is not.

> £250,000 is a bigger pot than 93% of the pensions people access. It is still not a moderate retirement.

## £250,000 clears the minimum and misses the moderate

The PLSA's Retirement Living Standards are the only widely used answer to "what does a UK retirement cost", and £250,000 lands between the first two: past the minimum with room to spare, well short of the moderate.

*Where £1,604 a month - £250,000 from 60 - sits against the standards for one person*

| Standard | Monthly cost | Does £250,000 reach it from 60? | What it covers |
| --- | --- | --- | --- |
| Minimum | £1,150 a month | Yes, with £454 to spare | all your needs, with a little left over for fun, but no car |
| Moderate | £2,725 a month | No, £1,121 short | more financial security and flexibility, a car, and a two-week holiday in Europe |
| Comfortable | £3,775 a month | No, £2,171 short | more financial freedom, some luxuries, and regular beauty treatments or theatre trips |

*Living standards are for a single person outside London and assume no rent and no mortgage. Our column is the Balanced scenario, spending the pot down by 95.*

So the answer depends entirely on which retirement you mean. If you own your home outright and a minimum-plus life sounds like enough - every need met, a little over for fun, no car - then £250,000 does it from 60 with £454 a month of headroom. If you are picturing the moderate version, with a car and a fortnight in Europe each year, £250,000 is £1,121 a month short from 60 and still £705 short from 67. No investment choice closes a gap that size.

The moderate standard needs a pot of about £430,682 at 67, or £587,216 at 60. That is £180,682 and £337,216 more than you have - which is why, on £250,000, the useful levers are the ones that change the target or the date rather than the pot.

## Can you retire at 55, 60, 65 or 67 with £250,000?

The same £250,000 produces very different lifestyles depending on when you start drawing it. Between 55 and 67 the gap is £621 a month, every month, for life.

*What £250,000 supports each month to age 95, by the age you stop*

| 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 |

*Balanced assumptions: 5% growth, 2.5% inflation, 0.4% fees, spending to 95. 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 standard, with 12 bridge years to fund first. Technically yes, practically a minimum retirement with no margin - and from 6 April 2028 the earliest you can touch a pension is 57, so anyone retiring at 55 after that needs ISAs or other savings for the first two years.
- **At 60:** £1,604 a month. Yes for a minimum-plus retirement in a home you own outright. Add £900 of rent and it fails: a minimum lifestyle plus rent would need a pot of about £384,087.
- **At 65:** £1,880 a month, £276 more than at 60 for five more years of work. Only 2 bridge years to fund. For a couple it is £2,835 a month, £940 short of the moderate couple standard of £3,775.
- **At 67:** £2,020 a month with no bridge at all. The best this pot does for one person, and still £705 short of moderate. For a couple it is £3,066 a month.

Each year you wait between 60 and 67 is worth roughly £59 a month for the rest of your life, and the effect compounds twice: the pot grows for another year, and it has one fewer year to cover. On a pot this size that leverage is the whole game, because every £100 a month is a larger share of the total than it would be on £500,000.

## Where £250,000 works, and where it does not

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

**Owns their home outright, stops at 67: Enough** for a minimum-plus retirement

With no housing costs, £250,000 supports £2,020 a month from 67 - £870 past the PLSA's minimum £1,150, £705 short of their moderate £2,725. 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. Sustaining that spending from 60 would take about £384,087. Housing, not investing, is the thing to fix - or the retirement date is.

**A couple with two full State Pensions, stopping at 65: Between the standards** £940 a month short of a moderate retirement

Their shared £250,000 supports £2,835 a month from 65, against the PLSA's minimum couple figure of £1,875 and moderate £3,775. Two State Pensions are the reason it goes so much further: £25,095 a year of inflation-linked income that no pot has to produce.

## What £250,000 buys as an annuity instead

Everything above spends the pot down. The other option is to hand it to an insurer for a guaranteed income, and on 17 September 2026 the best single-life rate for a 65-year-old paid £8,125 a year per £100,000. Pro rata, £250,000 buys about £20,316 a year, or £1,693 a month.

- **£1,693 a month** - level annuity at 65, single life. Guaranteed for life, but fixed: after 20 years of 2.5% inflation it buys 39% less than it did on day one.
- **£1,160 a month** - inflation-linked annuity at 65. Rises with RPI each year, so it is the like-for-like comparison with our today's-money figures - and it starts £720 a month below the £1,880 drawdown supports.
- **£1,578 a month** - joint-life level annuity at 65. Pays half to a spouse three years younger for the rest of their life, for £115 a month less than the single-life version.

The difference between the inflation-linked annuity and our drawdown figure is the price of certainty. Drawdown at £1,880 a month assumes 5% growth arrives on schedule and that you are content to finish with nothing at 95; the annuity pays whatever markets do and however long you live. Most people with a pot this size choose drawdown - 17% of £100,000 to £249,999 plans accessed in 2024/25 bought an annuity, against 6% of larger ones - but 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 17 September 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.

## £250,000 against the 4% rule

The 4% rule says £250,000 gives you £10,000 a year, or £833 a month. Our engine says £1,604 a month from 60. Both are right, because they are answering different questions.

The 4% rule comes from US research into portfolios that had to survive any 30-year window with money still in them. It ignores the State Pension entirely, and it never spends the pot down. Our figure adds £12,548 a year from 67 and finishes at 95 with the pot at zero, which is what most people actually want their money to do.

On £250,000 the difference is not academic. £833 a month is £317 below the PLSA minimum, so by the 4% rule this pot cannot fund any retirement at all. Add the State Pension back and it funds a minimum-plus one from 60. If you have read that £250,000 is nowhere near enough, the 4% rule is usually why, and leaving the State Pension out is what makes it wrong for the UK.

## The bridge years decide it

Almost every difference in this article traces back to the same thing: the years between stopping work and your State Pension starting, when the pot pays for everything on its own.

Retire at 60 with a State Pension age of 67 and you have 7 of those years. Spending £1,600 a month across them costs £134,400 with nothing arriving to replace it, which is why a £250,000 pot is down to about £143,704 by the time the State Pension finally starts. From then on the pot only has to find £554 a month, and £143,704 does that for decades.

That single fact explains the £416-a-month gap between stopping at 60 and stopping at 67, and the £621 gap from 55. Nothing about the lifestyle changes between those rows. The pot simply carries 12 years unaided in one of them and none in the other, and £250,000 is not large enough to carry twelve unfunded years and still fund a good thirty after them.

> **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](https://www.gov.uk/state-pension-age).

## What moves £250,000 from tight to workable

Six changes that move the answer, and what each is worth in monthly spending against the £1,604 a month the pot supports from 60.

1. **Work to 65 instead of 60: £276 a month more** - The 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.
2. **Find £500 a month of income that lasts: £500 a month of spending** - A lodger, a small final salary pension, or a rental. Income that carries on for as long as you do is worth pound for pound, because it is income the pot never has to produce: £500 a month takes you to £2,104 from 60, closing 45% of the gap to moderate. Work that stops at 67 is worth much less over a lifetime, but it does the one job that matters most: it stops you selling investments during the bridge years.
3. **Remove housing costs before you stop** - Every £900 a month of rent or mortgage is £900 a month of the pot's output already spoken for - and £900 is 56% of everything £250,000 produces at 60. Clearing a mortgage or downsizing changes the answer to this article more reliably than any investment decision.
4. **Plan as a household, not as two people** - A couple sharing £250,000 can spend £2,377 a month from 60 rather than £1,604, because two full State Pensions bring in £25,095 a year between them from 67.
5. **Fill the gaps in your National Insurance record: £110 a month** - The 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](https://www.gov.uk/check-state-pension).
6. **Cut your fees** - We 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.

## What you actually keep after tax

The £1,604 a month above is what leaves the pot. 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, so what lands in your account is a little less.

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 the same withdrawal costs about £240 a month in tax. Neither figure comes near the higher-rate band; on a pot this size income tax is a rounding error next to the stopping age.

> **Take the lump sum slowly**
>
> Taking all £62,500 on day one is tax free too, but it leaves every later withdrawal fully taxable and takes a quarter of the pot out of the market. Unless there is a mortgage to clear, spreading the tax-free element across withdrawals usually leaves more in your pocket over a retirement.

## The assumptions behind £1,604 a month

Every figure here rests on a guess about growth and a guess about how long you live. Both are worth seeing rather than hiding.

*What £250,000 supports from 60, by growth scenario*

| Scenario | Growth before inflation | Monthly spending supported |
| --- | --- | --- |
| Cautious | 3% | £1,438 a month |
| Balanced | 5% | £1,604 a month |
| Adventurous | 7% | £1,804 a month |

*All three assume 2.5% inflation and 0.4% fees, and all are in today's money.*

That is a range of £366 a month on the same £250,000, decided by something nobody controls. Every row still lands between the minimum and moderate standards, which is the useful conclusion: the growth assumption changes how comfortable you are, not which retirement you are having.

*What £250,000 supports from 60, by how long you plan for*

| Plan to age | Monthly spending supported |
| --- | --- |
| 85 | £1,759 a month |
| 90 | £1,669 a month |
| 95 | £1,604 a month |
| 100 | £1,556 a month |

*We use 95 as standard, because planning to average life expectancy leaves half of us with an unfunded decade.*

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 half of us outlive them, and a plan that stops at 86 has a coin-flip chance of running dry. Planning to 95 costs £155 a month against planning to 85, which is the price of not being on the wrong side of the flip.

> **Everything here is in today's money**
>
> We subtract inflation from growth, so £1,604 a month means the lifestyle £1,604 buys right now, in every year of the plan. The nominal figure you would actually withdraw in 2050 is far larger, and buys exactly the same shopping.

## What this calculation leaves out

Four things could move the answer materially, and none of them are in the numbers above.

- **The order returns arrive in.** A steady £1,604 a month assumes steady growth. A bad first five years is far more damaging than the same five years at 80, because you sell units to live on while they are cheap. Holding one to two years of spending in cash is the usual defence, and it matters more on £250,000 than on a large pot with room to absorb the loss.
- **Defined benefit pensions.** Any final-salary or career-average pension is income the pot never has to produce. Even £300 a month of it is worth as much to this plan as £90,280 of extra pot.
- **Care costs.** Later-life care can consume a pot this size several times over, and none of these figures include it.
- **Access.** The normal minimum pension age is 55, rising to 57 on 6 April 2028. Retiring before then means the first years cannot come from a pension at all - they have to come from ISAs or other savings you can reach at any age.

None of that makes the exercise pointless. £250,000 is a real pot that a minority of people reach, and knowing it buys roughly £1,604 a month from 60 or £2,020 from 67 tells you which retirement is on the table and which one needs another decision.

## How to check your own numbers

1. **Add up every pot you have** - Old workplace pensions, the current one, SIPPs and ISAs. The FCA counts plans rather than people for a reason: most retirees have more than one, and £250,000 across three pots is exactly as good as £250,000 in one.
2. **Get your State Pension forecast** - Free on [gov.uk](https://www.gov.uk/check-state-pension). 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.
3. **Set spending to your real budget, housing included** - Then run it in the [drawdown calculator](/pension-drawdown-calculator-uk) and look at the depletion age, not the monthly figure. If it lands before 90, the plan needs a change somewhere.
4. **Work out what another few years is worth** - Put your real numbers into the [retirement age calculator](/retirement-age-calculator-uk). 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.

## Frequently asked questions

### Is £250,000 enough to retire on?

It is enough for a minimum-plus retirement if you own your home, and not enough for a moderate one 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 PLSA's minimum standard of £1,150 and £705 to £1,121 a month below their moderate £2,725.

### Can I retire at 55 with £250,000?

Only for a minimum retirement with no margin. It supports about £1,399 a month to 95, just £249 above the PLSA 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 or a mortgage and it stops working - a minimum lifestyle plus £900 of housing would need a pot of about £384,087.

### 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 PLSA's moderate standard for one person.

### Can I retire at 67 with £250,000?

Yes, and it is the age at which the pot does the most: £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?](/blog/how-long-will-my-pension-last-uk).

### 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 17 September 2026 would pay about £20,316 a year fixed, or £13,920 a year rising with inflation, guaranteed for life.

### 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 the PLSA's 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 and £240 after, once the State Pension is using the allowance.

### 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](https://www.gov.uk/new-state-pension/what-youll-get) - GOV.UK
- [Check your State Pension forecast](https://www.gov.uk/check-state-pension) - GOV.UK
- [Tax when you get a pension](https://www.gov.uk/tax-on-pension) - GOV.UK
- [Retirement Living Standards](https://www.retirementlivingstandards.org.uk/) - Pensions UK (formerly the Pensions and Lifetime Savings Association)
- [Retirement income market data 2024/25](https://www.fca.org.uk/data/retirement-income-market-data-2024-25) - Financial Conduct Authority
- [Saving for retirement in Great Britain: April 2018 to March 2020](https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/pensionwealthingreatbritain/april2018tomarch2020) - Office for National Statistics
- [National life tables - life expectancy in the UK: 2022 to 2024](https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/lifeexpectancies/bulletins/nationallifetablesunitedkingdom/2022to2024) - Office for National Statistics
- [Best annuity rates](https://www.hl.co.uk/retirement/annuities/best-buy-rates) - Hargreaves Lansdown

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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.