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- tested:
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- tested:
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- credentials:
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The average UK pension pot is £32,700 according to the latest ONS data (January 2025), varying from £5,500 for under-25s to £145,900 for those aged 65-74. However, to achieve a "moderate" retirement lifestyle of £31,700 per year, you'll need a pot of £330,000-£490,000 alongside the full State Pension. With 43% of working-age Britons undersaving for retirement, understanding your position has never been more critical.
What Is the Average Pension Pot in the UK Right Now?
According to the Office for National Statistics (ONS) Wealth and Assets Survey published in January 2025, the median private pension pot across all age groups in Great Britain stands at £32,700. This figure covers defined contribution (DC) and defined benefit (DB) pensions but excludes the State Pension.
However, this headline figure masks significant variation. Your pension wealth is heavily influenced by your age, gender, region, and whether you've benefited from auto-enrolment since its 2012 introduction.
How Does the Average Pension Pot Vary by Age?
Unsurprisingly, pension wealth grows substantially as you progress through your career. The ONS data reveals a clear pattern—pension pots peak between ages 65-74 before declining as retirees begin drawing down their savings.
| Age Group | Median Pension Pot | Change from Previous Band |
|---|---|---|
| 16-24 | £5,500 | — |
| 25-34 | £18,800 | +242% |
| 35-44 | £39,500 | +110% |
| 45-54 | £80,000 | +103% |
| 55-64 | £137,800 | +72% |
| 65-74 | £145,900 | +6% |
| 75+ | £59,700 | -59% |
Source: ONS Pension Wealth: Wealth in Great Britain, April 2020-March 2022, published January 2025
The sharp decline after age 74 reflects pensioners actively spending their retirement savings—a natural part of the pension lifecycle. For younger workers, auto-enrolment has had a transformative effect, with 25-34 year olds seeing their median pension wealth double between 2018-2020 and 2020-2022.
How Does the Gender Pension Gap Affect Average Savings?
One of the starkest inequalities in UK pensions is the gender pension gap. According to the Department for Work and Pensions (DWP) 2025 report, women aged 55-59 have pension wealth of just £81,000 compared to £156,000 for men—a gap of 48%.
What Is the Pension Gap Between Men and Women by Age?
The gap starts relatively small but widens dramatically as careers progress. PensionBee's 2025 data shows the disparity at each life stage:
| Age Group | Men's Average | Women's Average | Gap |
|---|---|---|---|
| Under 30 | £3,907 | £3,214 | 18% |
| 30-39 | £11,326 | £8,927 | 21% |
| 40-49 | £26,241 | £19,591 | 25% |
| 50+ | £50,575 | £27,861 | 45% |
Source: PensionBee UK Pension Landscape 2025
Why Does the Gender Pension Gap Exist?
The gap stems from compounding factors throughout women's working lives. The gender pay gap (currently 6.9% for full-time workers according to ONS 2025 data) means lower pension contributions from the outset. Career breaks for childcare or caring responsibilities—taken disproportionately by women—create years of missed contributions and employer matching.
Part-time work also plays a significant role. While 35% of employed women work part-time compared to just 13% of men, those earning under the £10,000 auto-enrolment threshold miss out on automatic pension saving entirely.
Partners can contribute to each other's pensions and receive tax relief on contributions up to £3,600 gross annually, even if the recipient has no earnings. This can help offset years of reduced income during parental leave.
How Much Pension Do You Actually Need to Retire Comfortably?
Average figures only tell part of the story. The more important question is: how does your pension pot compare to what you'll actually need?
The Pensions and Lifetime Savings Association (PLSA) publishes Retirement Living Standards calculated by Loughborough University, defining three lifestyle tiers based on real spending patterns.
What Are the Three Retirement Living Standards?
| Standard | One Person (Annual) | Two People (Annual) | Lifestyle Includes |
|---|---|---|---|
| Minimum | £13,400 | £21,600 | Basic needs, limited social activities, UK holidays only |
| Moderate | £31,700 | £43,900 | More financial security, some luxuries, European holiday |
| Comfortable | £43,900 | £60,600 | Financial freedom, regular beauty/leisure, longer holidays |
Source: PLSA Retirement Living Standards 2025 (updated June 2025)
What Size Pension Pot Do You Need for Each Standard?
The PLSA provides indicative pension pot sizes required to achieve each standard, assuming you receive the full State Pension (£11,973/year in 2025/26) and have no mortgage or rent costs:
| Standard | One Person Pot Required | Two People (Each) |
|---|---|---|
| Minimum | ~£0* | ~£0* |
| Moderate | £330,000 - £490,000 | £165,000 - £250,000 |
| Comfortable | £540,000 - £800,000 | £270,000 - £400,000 |
*Two full State Pensions (£23,946 combined) cover the Minimum standard for couples. Source: PLSA 2025
The gap between reality and requirement is sobering. The average pension pot of £32,700 falls dramatically short of even the moderate standard—explaining why 43% of working-age Britons (14.6 million people) are currently classified as undersaving for retirement according to DWP analysis.
How Does the State Pension Factor Into Your Retirement Income?
The State Pension forms the foundation of most retirement incomes. For 2025/26, the full new State Pension is £230.25 per week (£11,973 annually). From April 2026, the triple lock guarantee will increase this by 4.8% to approximately £241.30 per week (£12,547 annually).
To qualify for the full amount, you need 35 qualifying years of National Insurance contributions. You can check your NI record and State Pension forecast on GOV.UK.
Your pension savings are protected up to £120,000 per provider under the Financial Services Compensation Scheme (FSCS) if your pension company fails. This limit was increased from £85,000 in December 2026.
How Has Auto-Enrolment Changed Average Pension Savings?
Since its introduction in 2012, automatic enrolment has transformed workplace pension participation. According to DWP data from August 2025, 89% of eligible employees (21.7 million people) now save into a workplace pension—compared to just 55% before the reforms.
Total annual workplace pension savings reached £149.7 billion in 2024, a real-terms increase of £49.1 billion since 2012. The contribution breakdown shows employers shouldering the largest share:
| Contribution Source | Share of Total Savings |
|---|---|
| Employer contributions | 62% |
| Employee contributions | 27% |
| Tax relief (government) | 11% |
Source: DWP Workplace Pension Participation and Savings Trends 2009-2024
Is the 8% Minimum Contribution Enough?
The current minimum auto-enrolment contribution is 8% of qualifying earnings (5% from employee, 3% from employer). While this represents significant progress, pension experts widely agree it falls short of what's needed for an adequate retirement.
The Pensions Commission that designed auto-enrolment originally envisaged contributions rising to 12-15% over time. At just 8%, someone on median earnings starting at age 22 would accumulate a pot of around £180,000 by retirement—enough for the minimum standard but falling well short of moderate.
The Pensions (Extension of Automatic Enrolment) Act 2023 gives government powers to lower the age threshold from 22 to 18 and remove the lower earnings limit. These changes could bring an additional 900,000 young workers into pension saving.
How Can You Boost Your Pension Pot Above Average?
If you're concerned about falling short of your retirement goals, there are practical steps you can take to build a larger pension pot.
What Is the Power of Starting Early?
Compound growth is your greatest ally. Someone contributing £200 per month from age 25 could accumulate approximately £430,000 by age 65 (assuming 5% annual growth). Starting the same contributions at age 35 would yield around £250,000—a difference of £180,000 from just 10 years of earlier saving.
Should You Increase Your Workplace Pension Contributions?
If your employer offers contribution matching above the minimum 3%, you're effectively leaving free money on the table by not taking advantage. Many employers match contributions up to 5%, 6%, or even 10% of salary.
Salary sacrifice arrangements can also boost your pension while reducing your tax and National Insurance bill. By sacrificing gross salary into your pension, both you and your employer save on NI contributions—and many employers pass their savings back to you.
What Are the Benefits of Opening a SIPP?
A Self-Invested Personal Pension (SIPP) offers greater investment flexibility than most workplace schemes. You can choose from thousands of funds, individual shares, ETFs, and investment trusts—often with lower ongoing charges than default workplace funds.
Every £100 you contribute to a SIPP is automatically topped up to £125 through basic-rate tax relief. Higher-rate taxpayers can claim an additional 20% through Self Assessment, making a £100 contribution effectively cost just £60.
For platform comparisons, see our guide to the best investment platforms in the UK.
What Happens to Your Pension If You're Self-Employed?
Self-employed workers face a significant pension disadvantage. Without auto-enrolment or employer contributions, freelancers must take full responsibility for their retirement savings—and many don't.
Just 17% of self-employed workers contribute to a personal pension annually, according to the Wealth and Assets Survey. This explains why self-employed pension pots typically lag significantly behind employed peers.
The solution is opening a personal pension or SIPP and treating contributions like a non-negotiable business expense. Aim for at least 15% of your profits if possible, and remember—you still receive the same tax relief as employees (25% basic-rate top-up on contributions).
Final Thoughts
The average UK pension pot of £32,700 provides useful context, but the more important benchmark is whether your savings align with your retirement goals. With 43% of working-age Britons undersaving and a persistent 48% gender pension gap, there's clearly work to be done.
The good news? Small changes now can have outsized effects later. Increasing your workplace contributions by just 1-2%, opening a SIPP for additional savings, or simply checking your State Pension forecast can set you on a better path.
Start by checking your current pension value and comparing it to the PLSA Retirement Living Standards. If there's a gap, make a plan to close it—your future self will thank you.
For more on building your investment portfolio, explore our guides to the best Stocks and Shares ISAs and how to invest in stocks in the UK.
Frequently Asked Questions
What is a good pension pot at 40 in the UK?
Based on ONS data, the median pension pot for 35-44 year olds is £39,500. However, to achieve a "moderate" retirement lifestyle, you should aim for significantly more. A common rule of thumb suggests having 3x your annual salary saved by age 40—so around £105,000-£120,000 for someone on median earnings.
How much State Pension will I get in 2026?
From April 2026, the full new State Pension will be approximately £241.30 per week (£12,547 annually) following a 4.8% triple lock increase. You need 35 qualifying years of National Insurance contributions for the full amount; fewer years means a proportionally reduced payment.
Can I retire at 55 with £300,000?
A £300,000 pension pot could provide approximately £12,000-£15,000 annual income using the 4% drawdown rule, plus 25% tax-free lump sum (£75,000). Combined with State Pension from age 66/67, this approaches a "moderate" lifestyle—but retiring at 55 means funding 11+ years before State Pension begins, which significantly stretches your pot.
How do I find lost pension pots?
Use the government's free Pension Tracing Service to locate old workplace pensions. You'll need previous employer details. Private services like Gretel and PensionBee can also help locate and consolidate lost pots.
Is my pension protected if my provider goes bust?
Yes. The Financial Services Compensation Scheme (FSCS) protects pension savings up to £120,000 per provider if your pension company fails. This limit was increased from £85,000 in December 2024. Defined benefit schemes have separate protection through the Pension Protection Fund (PPF).
What happens if I have no pension?
You'll rely solely on the State Pension (£11,973/year in 2025/26) and potentially means-tested Pension Credit. This provides a basic income but falls well short of what most people need for a comfortable retirement. If you're not yet retired, it's never too late to start saving—even small contributions benefit from tax relief and compound growth.
References
- Office for National Statistics. "Pension wealth: wealth in Great Britain, April 2020 to March 2022." Published 24 January 2025. ons.gov.uk
- Department for Work and Pensions. "Gender Pensions Gap in Private Pensions: 2020 to 2022." Published July 2025. gov.uk
- Department for Work and Pensions. "Workplace pension participation and savings trends: 2009 to 2024." Published August 2025. gov.uk
- Department for Work and Pensions. "Analysis of Future Pension Incomes 2025." Published July 2025. gov.uk
- Pensions and Lifetime Savings Association (PLSA). "Retirement Living Standards 2025 Update." retirementlivingstandards.org.uk
- PensionBee. "The UK Pension Landscape 2025." pensionbee.com
- GOV.UK. "The new State Pension." gov.uk
- Financial Services Compensation Scheme. "Pensions protection." fscs.org.uk
