Blog · Pension pots

Is £750,000 enough to retire on?

From 60 it lands past moderate, short of comfortable. Taking the tax-free quarter in slices is often sold as a big tax saving; plan either route well and the tax comes out close. What separates them is cash sitting idle, and what you can still pay in.

Adam Akhlaq21 September 202614 min readUpdated 2 November 2026

The short answer

For one person who owns their home, yes. £750,000 supports about £3,266 a month before tax from 60 to 95 with a full State Pension from 67: past moderate, short of comfortable. Stop at 67 and it is £3,970 a month. Taking the £187,500 tax-free cash in slices or up front is closer than it looks: use your personal allowance either way and the tax is about £2,000 apart over 35 years.

Moderate£2,725Comfortable£3,775from 55£2,919from 60£3,266from 67£3,970

← Minimum £1,150

the tax gap over 35 years between slices and a lump sum, using your personal allowance either way: About £2,000
of growth £187,500 misses in savings that only keep pace with inflation: About £13,000
what you can pay into pensions after your first slice, down from £60,000: £10,000 a year

Try it with your numbers

See how long £750,000 would last for you

Prefilled with £750,000 from age 60 at £3,250 a month. Push the spending to £4,000 and the pot empties at 83; pull it back under £2,634 and it never empties at all. The spending is before tax, and how much of it tax takes is what this guide is about.

Your numbers

Pot at retirement£750,000

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

Age you retire60

Monthly spending£3,250

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 £750,000 lands: past moderate, short of comfortable

£750,000 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 £3,266 a month in today's money, or £39,192 a year, before income tax.

That is between the Pensions UK moderate (£2,725) and comfortable (£3,775) standards for one person. Stop at 65 and it supports £3,734 a month; stop at 67 and it is £3,970, past the comfortable standard.

Where £3,266 a month - £750,000 from 60 - sits against the standards for one person

Standard	Monthly cost	Does £750,000 reach it from 60?
Minimum: all your needs, with a little left over for fun, but no car	£1,150	Yes, with £2,116 to spare
Moderate: more financial security and flexibility, a car, and a two-week holiday in Europe	£2,725	Yes, with £541 to spare
Comfortable: more financial freedom, some luxuries, and regular beauty treatments or theatre trips	£3,775	No, £509 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, before tax.

It is also a lot of money for a pension. Only 7% of the 961,575 plans accessed for the first time in 2024/25 were £250,000 or more, and in the ONS's last full survey (April 2018 to March 2020) the tenth of people with the most private pension wealth had a median of £637,500. £750,000 is more than that.

So the more useful question is how to take it out. Usually a quarter of a pension, £187,500 here, can come out tax free, and the rest is taxed as income. You can take that quarter all at once or a slice at a time. Slices are often sold as the big tax saving, but on this pot the tax comes out close if you plan either route well. The differences that matter are elsewhere, and the rest of this guide is about them.

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 →

Two ways to take the tax-free quarter

Either way a quarter comes out tax free. What you choose is when: all on day one, or a little with every withdrawal.

All at once, up front. You move the whole pot into drawdown, take £187,500 tax free on the day, and every pound you draw after that is taxable income.
A slice at a time. Each withdrawal is a quarter tax free and three quarters taxable. You can do this with an uncrystallised funds pension lump sum (UFPLS), paid straight from the untouched pot, or with phased drawdown, where you move a slice into drawdown each time, take its quarter tax free and draw the rest as income. The tax is the same; what differs is the paperwork, and what your provider offers.

You do not have to pick one route for the whole pot. You can take tax-free cash on part of it for a specific cost and leave the rest untouched to slice later: only the part you move into drawdown uses up its tax-free quarter.

Not every provider offers both

Providers may not offer every way of taking a pension, so ask yours which it does. If it offers neither UFPLS nor phased drawdown, you can transfer your pension to one that does.

One month at 60 and one at 67, both ways

Take £3,266 a month, the most £750,000 supports from 60. The lump sum taker spends the cash but still draws £1,047 a month from the pension, enough to use the personal allowance, so the cash lasts about 7.0 years, to about 67. From 67 the State Pension pays £1,046 of the month either way.

2026/27 income tax on £3,266 a month, by how the tax-free cash comes out

Each month	At 60	From 67
Paid by the State Pension	None	£1,046
Slices: drawn from the pot	£3,266	£2,220
Slices: tax-free quarter	£817	£555
Slices: taxable	£2,449	£2,711
Slices: income tax	£280	£333
Lump sum: spent from the cash	£2,219	None, it is spent
Lump sum: taxable	£1,047	£3,266
Lump sum: income tax	None	£444

From 67 the taxable figures include the State Pension, which is taxed in full. Personal allowance £12,570, basic rate 20% to £50,270. Scottish rates differ.

While the cash lasts the lump sum is cheaper: it pays no tax while slices pay £280 a month. From 67 slices are cheaper by £111 a month, because once the cash is gone every pound of the lump sum route is taxable, while slices keep a quarter of each withdrawal tax free. The slices' own bill rises by £53 at 67, as the State Pension replaces pot money that was a quarter tax free with income that is taxed in full. Both routes stay inside the basic-rate band throughout.

Over the whole plan, the tax comes out close

The £280 a month the lump sum saves while the cash lasts and the £111 a month slices save after it nearly cancel. Over the plan from 60 to 95, slices pay about £2,000 less tax, as long as the lump sum taker uses the personal allowance every year.

Income tax a year on £3,266 a month from 60, in today's money

When	Slices	Lump sum
60 to 66	£3,360	None
67 to 85	£3,996	£5,328
86 on	£5,328	£5,328
Total, 60 to 95	£147,000	£149,000

"Lump sum" takes £187,500 at 60, draws enough from the pension each year to use the personal allowance, and spends the cash for the rest. At about 86 the slices have used up the £268,275 lump sum allowance. It is fixed in pounds, while 2.5% inflation makes each year's withdrawals larger in pounds, so a quarter of everything drawn reaches it before 95; from then every withdrawal is taxable either way. We count it from 60 in today's pounds: retire years from now and, unless it is raised, it will be worth less by then and you reach it sooner. Tax bands are held at 2026/27 levels in today's money, but they are frozen in pounds until 5 April 2031, so real tax is a little higher under both routes. Totals are to the nearest £1,000.

The £2,000 left over is because slices take a quarter of the pot's growth out tax free as well: about £198,000 in today's money before the lump sum allowance runs out, against £187,500 up front. The cap itself is the subject of the £1 million guide.

The lump sum only costs much more tax if you live on the cash and leave the pension alone. Then the cash runs out after about 4.8 years, the personal allowance goes unused for all of them, and the plan pays about £160,000 in tax, £13,000 more than slices.

What the lump sum also costs is growth. Slices leave all £750,000 invested. £187,500 in savings that only keep pace with inflation misses about £13,000 of the growth the pot would have earned while you spend it, which puts slices about £15,000 ahead in all. In savings paying 1.5% above inflation, before any tax on the interest, the whole gap shrinks to about £4,000.

If you stop at 67

On £3,970 a month from 67, slices cost £438 a month in tax against £585 once a lump sum is spent. Over the plan the gap is about £3,000, because the State Pension uses up the personal allowance either way. The bigger difference is the £10,000 or so of growth a lump sum in savings that only match inflation would miss.

When the lump sum up front is the better call

Slices edge it when the money is for living on. When you need a large sum in one go, tax-free cash is cheaper than a slice, even counting the tax it costs later.

A big one-off cost: about £11,700 cheaper as tax-free cashRaising £100,000 at 60 as tax-free cash means moving £400,000 into drawdown and taking a quarter of it; the other £350,000 stays untouched to slice later. Taking the same £100,000 as one slice, on top of the year's £3,266 a month, adds £26,704 to that year's bill: three quarters of it is taxable, and it pushes the year's income into the 40% band and past the £100,000 point where the personal allowance starts to shrink. The tax-free cash has a later cost too: the £300,000 moved into drawdown with it has no tax-free quarter left, so £75,000 more is taxed when you draw it, about £15,000 at 20%. Net, the slice costs about £11,700 more, or £6,700 more split across two tax years.
Clearing a mortgageWithin the basic-rate band the total tax is about the same whether you clear it with tax-free cash or pay it month by month from slices, so it comes down to the mortgage rate against the 4.6% a year after fees we assume the pot earns. The £250,000 guide works through clearing one with the tax-free cash.
Still paying into a pensionTaking only tax-free cash, whether the whole quarter up front or just the quarter of each phased-drawdown slice, leaves your pension allowance alone. A UFPLS cuts it from the first payment, as the next section explains.

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

See your retirement age →

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The catch if you still pay in: the £10,000 allowance

The first time you take a UFPLS, or the first time you draw income from a flexi-access drawdown fund, the most you can pay into defined contribution pensions each year without a tax charge drops from £60,000 to £10,000, for good. This is the money purchase annual allowance.

It counts everything paid in, by you or your employer, including tax relief, and you cannot carry forward unused allowance from earlier years to cover a payment above it. Your provider sends a flexible access statement within 31 days of the first withdrawal that triggers it; keep it, because it records the date.

Taking only tax-free cash does not trigger it. Take the whole £187,500 up front and leave the rest in drawdown untouched, or use phased drawdown and take only the tax-free quarter of each slice, and your full £60,000 allowance stays. So if you are still working and more than £10,000 a year goes into a pension for you, live on tax-free cash only until those contributions stop. On this pot that matters more than the tax gap between the two routes.

Setting up slices

Step 1

Check what your provider offers

Ask whether it pays UFPLS withdrawals, phased drawdown, or both, and what it charges for each. If it offers neither, you can transfer to a provider that does.

Step 2

Pick a size and a rhythm

A monthly slice works like a salary; a yearly one means fewer payments. Either way a quarter is tax free; keep each tax year's taxable part inside the basic-rate band and none of it is taxed above 20%.

Step 3

Check the tax on the first payment

Your provider takes tax off before paying you. If too much comes off, claim the overpayment back from HMRC.

Step 4

Run your own numbers

Try your spending in the drawdown calculator, and get your State Pension forecast on gov.uk: it uses up most of your personal allowance, so it sets how much of each slice is taxed from 67.

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 £750,000 supports £2,647 a month from 60, on adventurous £3,994. With a State Pension age of 68 it supports £3,230 from 60 rather than £3,266. Planning to 95 rather than 85 costs £618 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.

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.