Blog · Pension pots
Is £400,000 enough to retire on?
Only about 7% of pension plans people access are even £250,000, and £400,000 comes close to the moderate retirement most people picture. How close depends almost entirely on the age you stop.
The short answer
Close to a moderate retirement if you work to 67, and £623 a month short of one if you stop at 60. £400,000 supports about £2,102 a month in today's money from 60 to 95, with a full State Pension from 67, or £2,605 a month if you stop at 67 - £120 a month short of the moderate standard for one person. Spend £2,200 a month from 60 and it lasts to about 90.
- what £400,000 supports from 60 to 95
- £2,102 a month
- what the same pot supports if you stop at 67
- £2,605 a month
- the most you can spend from 60 and never run out
- £1,802 a month
- of pension plans accessed in 2024/25 were £250,000 or more
- 7%
Try it with your numbers
See how long £400,000 would last for you
Prefilled with £400,000 from age 60 at £2,200 a month. Push the spending to £2,500 and the pot runs out at 82; bring it down to £1,802 and it never runs out. Change any number to match your own plan - nothing you enter leaves your browser.
Your numbers
Prefer the full page? Open the pension drawdown calculator.
What £400,000 actually pays you
Spread from 60 to 95, with a full State Pension arriving at 67, £400,000 supports about £2,102 a month in today's money. Stop at 67 instead and it supports £2,605 a month.
That is not £400,000 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.
if you stop at 60
£2,102 a month
£25,224 a year, with 7 years paid for by the pot alone before the State Pension starts.
if you stop at 67
£2,605 a month
7 more years of growth, 7 fewer years of spending, and no gap to fill.
for a couple, from 60
£2,876 a month
The same £400,000, but two full State Pensions worth £25,096 a year join at 67.
From 67 the State Pension pays £1,046 a month on its own, so the pot provides £1,559 of the £2,605. At this size the pot provides about 60% of your income and the State Pension the rest, which is why both the age you stop and your National Insurance record move the answer.
How long will a £400,000 pension last?
From 60, £400,000 lasts to about 82 at £2,500 a month and to 75 at £3,000. Take £1,802 a month or less and it never runs out at all.
| Monthly spending | Stop at 60 | Stop at 65 | Stop at 67 |
|---|---|---|---|
| £2,000 a month | Age 100 | Beyond 100 | Never runs out |
| £2,250 a month | Age 89 | Beyond 100 | Beyond 100 |
| £2,500 a month | Age 82 | Age 93 | Age 97 |
| £3,000 a month | Age 75 | Age 84 | Age 88 |
| £3,500 a month | Age 72 | Age 79 | Age 82 |
Balanced assumptions, 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 £1,802 a month from 60, or £2,059 a month from 67, growth plus the State Pension keep up with the withdrawals and the pot never empties. Above that line, every extra £500 a month brings the end date years closer. The same grid for other pot sizes is in How long will my pension last?.
Is £400,000 enough for a moderate retirement?
Almost, if you work to 67. The Retirement Living Standards from Pensions UK put a moderate retirement for one person at £2,725 a month, and £400,000 from 67 supports £2,605 - £120 a month short of the moderate standard. From 60 it supports £2,102, between the Pensions UK minimum (£1,150) and moderate (£2,725) standards for one person.
| Standard | Monthly cost | Does £400,000 reach it from 60? |
|---|---|---|
| Minimum: all your needs, with a little left over for fun, but no car | £1,150 | Yes, with £952 to spare |
| Moderate: more financial security and flexibility, a car, and a two-week holiday in Europe | £2,725 | No, £623 short |
| Comfortable: more financial freedom, some luxuries, and regular beauty treatments or theatre trips | £3,775 | No, £1,673 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.
A moderate retirement - a car, a fortnight in Europe each year, eating out now and then - needs a pot of about £430,682 if you stop at 67, or £587,216 if you stop at 60. So £400,000 is £30,682 short at 67, but £187,216 short at 60. The gap at 67 is small enough for a year or two of extra work, a little part-time income or slightly lower spending to close it.
Can you retire at 55, 60, 65 or 67 with £400,000?
The same £400,000 pays very different amounts depending on when you start drawing it. Between 55 and 67 the difference is £750 a month, for life.
| You stop at | One person | A couple | Bridge years |
|---|---|---|---|
| Age 55 | £1,855 a month | £2,495 a month | 12 |
| Age 57 | £1,945 a month | £2,634 a month | 10 |
| Age 60 | £2,102 a month | £2,876 a month | 7 |
| Age 62 | £2,223 a month | £3,063 a month | 5 |
| Age 65 | £2,437 a month | £3,391 a month | 2 |
| Age 67 | £2,605 a month | £3,651 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 with no State Pension at all.
- At 55: £1,855 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. 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: £1,945 a month - the earliest most people can draw a pension from 6 April 2028.
- At 60: £2,102 a month, between the Pensions UK minimum (£1,150) and moderate (£2,725) standards for one person. Plenty for a simple life in a home you own. With £900 a month of rent, a minimum lifestyle would need a pot of about £384,087, so £400,000 just covers it.
- At 65: £2,437 a month, £335 more than at 60. For a couple it is £3,391 a month, between the Pensions UK minimum (£1,875) and moderate (£3,775) standards for a couple.
- At 67: £2,605 a month with no gap to fill, £120 a month short of the moderate standard. For a couple it is £3,651 a month.
Each year you keep working between 60 and 67 is worth about £72 a month for the rest of your life. Even stopping at 62 instead of 60 adds £121 a month.
Where £400,000 works, and where it does not
Three people with exactly the same pot, and three different answers.
Owns their home outright, stops at 67
Nearly moderate £120 a month short
With no housing costs, £400,000 supports £2,605 a month from 67. That pays for every need and most of what a moderate retirement includes; trimming £120 a month of spending, or working a little past 67, closes the rest.
Still renting at £900 a month, wants to stop at 60
Just enough £52 a month to spare
A minimum lifestyle plus rent costs £2,050 a month, and £400,000 supports £2,102 from 60. It pays the rent and the essentials, with little room for anything else - and rent that keeps rising faster than inflation would eat into it.
A couple with two full State Pensions, stopping at 65
Enough £3,391 a month together
Their shared £400,000 supports £3,391 a month from 65, between the Pensions UK minimum (£1,875) and moderate (£3,775) standards for a couple. Two State Pensions bring in £25,096 a year of inflation-linked income that no pot has to produce.
Still building the pot? Work backwards from spending to the age you could afford to stop.
See your retirement age →Email me my results
One email with your numbers and a link back to this exact scenario, plus a monthly UK retirement briefing. Unsubscribe any time.
We confirm your address first and store nothing you typed above. Privacy
How £400,000 compares with the pots people actually retire on
It is a large pot by any measure. Of the 961,575 pension plans accessed for the first time in 2024/25, only 7% were worth £250,000 or more. Those are plans, not people - many retirees have several - but £400,000 in total still puts you well ahead of most.
The ONS found that the median pension wealth of 55 to 64 year olds with a pension not yet being paid was £107,300 (April 2018 to March 2020), so £400,000 is about 3.7 times the typical amount.
People with pots of £250,000 or more mostly keep them invested: 86% of those plans went into drawdown (kept invested and drawn from as needed) and 6% bought an annuity. Across all drawdown plans of £250,000 or more taking a regular income, 52% were drawing less than 4% a year.
What £400,000 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 £400,000 buys about £32,688 a year, or £2,724 a month.
level annuity at 65, single life
£2,724 a month
Guaranteed for life, but it never rises: after 20 years of 2.5% inflation it buys 39% less than on day one.
inflation-linked annuity at 65
£1,855 a month
Rises with inflation each year, so it compares directly with our today's-money figures: it pays £373 a month more than the £1,482 the pot alone supports from 65 to 95.
joint-life level annuity at 65
£2,553 a month
Keeps paying half to a spouse three years younger after you die, for £171 a month less.
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. On a pot this size, a common middle path is to buy an annuity that covers the essentials alongside the State Pension and keep the rest invested.
Annuity rates move
These are Hargreaves Lansdown's best-buy rates on 8 October 2026, for an average postcode. Rates follow government bond yields and change every week, and health conditions or smoking can raise them. Get a live quote before you decide anything.
£400,000 against the 4% rule
The 4% rule says £400,000 gives you £16,000 a year, or £1,333 a month. Our engine says £2,102 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. If you want to leave the pot to someone, the 4% figure is the better guide; if you want to spend it, ours is.
What moves £400,000 from close to comfortable
Six changes that move the answer, and what each is worth against the £2,102 a month the pot supports from 60.
- Work to 65 instead of 60: £335 a month moreThe most effective lever you fully control. Five more years takes what £400,000 supports from £2,102 to £2,437 a month, and stopping at 62 is worth £121 a month.
- Find £500 a month of income that lasts: £500 a month moreA small final salary pension, a lodger, or rent from a property. Income that lasts as long as you do takes you to £2,602 a month from 60, because it is money the pot never has to produce.
- Clear your housing costs before you stop£900 a month of rent or mortgage is 43% of everything £400,000 pays from 60. Clearing a mortgage changes the answer more than any investment decision.
- Plan as a householdA couple sharing £400,000 can spend £2,876 a month from 60 rather than £2,102, because two full State Pensions bring in £25,096 a year between them from 67.
- Fill the gaps in your National Insurance record: a five-year gap costs £110 a monthThe full State Pension needs 35 qualifying years. On 30 years, £400,000 supports £1,992 a month from 60 instead of £2,102. Checking is free on gov.uk.
- Cut your feesWe assume 0.4% a year. On £400,000, paying 1% instead costs about £2,400 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 £2,102 a month comes out of the pot; from 67 only £1,056 does, and the State Pension pays the rest. Usually a quarter of a pension can be taken tax free - £100,000 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 £2,102 a month is about £106 a month before 67, because much 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 £2,102 a month in total is about £158.
Take the lump sum slowly
Taking all £100,000 on day one is tax free too, but it makes 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 part across your withdrawals usually leaves you with more.
The assumptions behind £2,102 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.
| Scenario | Growth before inflation | Monthly spending supported |
|---|---|---|
| Cautious | 3% | £1,801 a month |
| Balanced | 5% | £2,102 a month |
| Adventurous | 7% | £2,461 a month |
All three assume 2.5% inflation and 0.4% fees, and all are in today's money.
That is a range of £660 a month on the same £400,000, decided by something nobody controls. Plan on the balanced row, and make sure the cautious one is still a retirement you could live with.
| Plan to age | Monthly spending supported |
|---|---|
| 85 | £2,397 a month |
| 90 | £2,224 a month |
| 95 | £2,102 a month |
| 100 | £2,012 a month |
We use 95 as standard, because planning to average life expectancy leaves half of us short.
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 £295 a month compared with planning to 85.
If your State Pension age is 68
Anyone born from April 1978 onwards waits an extra year, which is one more year the pot pays for alone. £400,000 then supports £2,066 a month from 60 rather than £2,102. Your State Pension age is free to check on gov.uk.
What this calculation leaves out
- Bad timing in the markets. A steady £2,102 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 £2,200 a month from 60 takes the pot down to about £262,380 by 67. From then on it only has to find £1,154 a month.
- 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
Step 1
Add up every pot you have
Old workplace pensions, the current one, SIPPs and ISAs. £400,000 across three pots is exactly as good as £400,000 in one.
Step 2
Get your State Pension forecast
Free on gov.uk. A five-year gap in your record costs about £110 a month for life on this pot.
Step 3
Set spending to your real budget, housing included
Then run it in the drawdown calculator and look at the age the money runs out, not just the monthly figure. If it lands before 90, something in the plan needs to change.
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 £400,000 enough to retire on?
Close to a moderate retirement if you work to 67, and £623 a month short of one if you stop at 60. £400,000 supports about £2,102 a month in today's money from 60 to 95, or £2,605 a month from 67, alongside a full State Pension. From 67 that is £120 a month short of the moderate standard for one person, assuming you own your home.
How long will a £400,000 pension last?
Drawing from 60 with a full State Pension from 67, it lasts to about 82 at £2,500 a month and 75 at £3,000. At £1,802 a month or less it never runs out, because growth and the State Pension keep up with the withdrawals.
How much income will a £400,000 pension pot give me?
About £2,102 a month - £25,224 a year - if you stop at 60 and spend the pot down by 95, including a full State Pension from 67, or £2,605 a month from 67. As an annuity at 65 it would pay about £32,688 a year fixed, or £22,256 a year rising with inflation (best rates on 8 October 2026).
Can I retire at 55 with £400,000?
Yes, on a modest budget. It supports about £1,855 a month to 95, between the Pensions UK minimum (£1,150) and moderate (£2,725) standards for one person, with 12 years before any State Pension. From 6 April 2028 most people cannot touch a pension until 57, so the first two years would need other savings.
Can I retire at 60 with £400,000?
Yes: £2,102 a month to 95, between the Pensions UK minimum (£1,150) and moderate (£2,725) standards for one person, assuming you own your home. A moderate retirement from 60 would need a pot of about £587,216.
Can I retire at 65 with £400,000?
Yes: £2,437 a month to 95 for one person, between the Pensions UK minimum (£1,150) and moderate (£2,725) standards for one person, or £3,391 for a couple with two full State Pensions, with only 2 years before the State Pension starts.
Is £400,000 enough for a couple to retire on?
It goes further for a couple, because two full State Pensions bring in £25,096 a year. A shared £400,000 supports about £2,876 a month from 60 or £3,651 from 67 - from 67 that is between the Pensions UK minimum (£1,875) and moderate (£3,775) standards for a couple.
How much tax will I pay on a £400,000 pension?
Usually a quarter - up to £100,000 - can be taken tax free, and the rest is taxed as income. Drawing £2,102 a month with a quarter of each withdrawal tax free costs about £106 a month in tax before 67. From 67 the State Pension pays part of it and uses up your personal allowance, and tax on the same £2,102 in total is about £158 a month.
Do these figures account for inflation?
Yes. Every figure is in today's money: we take inflation off the growth rate, so £2,102 a month means what £2,102 buys today, in every year of the plan.
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
- Increasing Normal Minimum Pension Age · GOV.UK
- Check your State Pension age · 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.