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What is the average UK retirement income?

5 mins read
by Nick Green
Last updated Thursday, January 11, 2024

Find out the average current UK income from state pension plus private pensions, and how this compares to current average wages.

How much income will you have in retirement? And how well - in real terms - will it compare to what you earn now?

When it comes to income, the key factor isn't raw numbers so much as spending power, and also what essential outgoings you may have.

Going by this definition, millions of Brits today will be surprised to learn how current average earnings compare to current average retirement incomes.

If you want to know if you're saving enough for retirement, the most recent UK figures should give you a good idea.

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What is the average retirement income in the UK?

The government’s most recent data (as of 2022) shows the average weekly income for pensioners to be £349 – that’s after you’ve taken away direct taxes and housing costs. This works out at around £18,148 per year.

The average retirement income in the UK is also affected by regions.

If you live in London, you’re likely to have less than the average retirement income. But if you’re based in Scotland or the North East, you’re likely to have more to spend on average.

The gap generally comes down to a difference in living and housing costs.

In 2022, 71% of pensioners received income from a private pension.

The proportion generated from private pensions has increased in recent years, but state pension benefits, occupational pension schemes and investments are also major sources of income for UK retirees.

Find out how much retirement income you might receive from your private pension and how to boost it by using our pension calculator.

How does average retirement income compare to average earnings?

It’s interesting to see how much disposable income the average pensioner today receives, in comparison to the average worker.

Average UK earnings is £34,963 annually for the year ending on 5 April 2023.

After income tax, National Insurance and 5% pension contributions (the recommended minimum), this is reduced to £26,511.

On the face of it, this is around 50% more than the average retirement income.

However, this does not factor in housing costs, which have recently soared.

The average UK mortgage payment is £1,132 per month or £13,584 per year, according to Rightmove. 

While the retired generation may largely own their own homes outright and have no further mortgage payments to make, the working generation is spending a large chunk of its higher income on putting a roof over its head.

Is the average retirement income different for couples?

Couples tend to have more retirement income than single people.

As of 2022, retired couples have an average income of £515 a week, which may be due to couples sharing housing having lower overheads than someone living on their own.

Another factor may be that those who are single when retiring are likely to be divorced or separated, which may have had a significant impact on their past finances and their ability to save for retirement.

People in long-term stable relationships may have a greater capacity for building up retirement funds, as well as a stronger motivation for doing so.

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Can I live comfortably on the average retirement income?

As the comparison above shows, the average retired income may not be much different – in terms of disposable income – than that of the average wage earner.

But this doesn’t necessarily mean that such an income provides a comfortable or desired standard of living (since many wage earners still consider themselves to be struggling or ‘just getting by’).

So what makes a ‘comfortable’ retirement income?

Ultimately, it depends on how you want to spend your retirement.

Research by the Pensions and Lifetime Savings Association (PLSA) suggests that a couple in the UK need an annual combined income of £54,500 to have a retirement with few or no money worries, while a single person would need £37,300.

This estimate assumes a lifestyle that includes:

  • Three weeks’ holiday in Europe every year

  • Spending £144 per week on food

  • £1,500 worth of clothes and footwear per person annually

These assumptions aren’t extravagant, but they aren’t penny-pinching either.

So if you see yourself living more modestly – e.g. shorter UK-based holidays, cheaper food shops and fewer new clothes, you could get by on much less.

Research suggests that an annual income of £12,800 per person is enough for a frugal retirement – but any less might mean making some big sacrifices.

To give you an idea of how much you would need to save, a £100,000 pension pot would give you an income of between £4,000 to £5,000 a year, plus a lump sum of £25,000 tax-free cash.

This doesn’t sound like much, but if you are also receiving the full new state pension, the total could be between £14,600 and £15,600 per year (plus the tax-free lump sum).

Bear in mind that the state pension age is set to rise in the future.

Based on these figures, it’s clear that it’s advisable to aim for a pension pot of at least £100,000 or preferably more.

Fortunately, this is realistically achievable, as shown here.

Are most people prepared for retirement?

The full basic state pension in 2023/24 is £156.20 per week.

This is significantly below the average retirement income, which means that retirees are filling the gap using private (workplace or personal) pensions.

Those who do pay into private pensions should hopefully continue to meet this shortfall.

The real challenge will be faced by those who have no such pensions, mainly due to a lack of awareness – these individuals don’t know about pension schemes or why they are important.

So, they will have to cope with a major drop in disposable income when they retire, unless they can put some pension savings in place in the meantime.

How can I increase my retirement income?

The bigger pension pot you can build, the better chance you have of enjoying a comfortable retirement.

It is even possible to retire as young as 55, without necessarily earning a massive salary.

Your most powerful tool for retirement saving is time.

Compound interest over many years can build small contributions into impressive sums, so the golden rule is to start saving soon: the earlier, the better.

Learn more: what are the best savings accounts for the over 60s?

On the other hand, it’s never too late to start.

Every pension contribution you make is boosted by tax relief, so even putting money away in the final years before retirement is a lot better than doing nothing.

One of the best steps you can take to increase your retirement income is to talk to a financial adviser.

They will explain to you in simple terms what you need to do in order to achieve the income you want – and even better, they will show you how it’s possible.

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Nick Green
Nick Green is a financial journalist writing for, the site that has helped over 10 million people find financial, business and legal advice. Nick has been writing professionally on money and business topics for over 15 years, and has previously written for leading accountancy firms PKF and BDO.