Despite this inflation-busting uprate, next year’s full State Pension will be worth just over £240 a week – an amount many of us would struggle to live on. Building up your own retirement funds is fundamental, particularly for those starting out on their Pension saving journey and many years from retirement.
The State Pension is currently supported by the triple lock, which guarantees that this benefit rises by whichever is the higher of inflation, average earnings or 2.5%. Surveys, however, suggest that many don’t expect the triple lock to continue. In fact, recent research found 51% of adults don’t expect there to be any State Pension by the time they retire.
Most people are accumulating retirement savings through workplace pensions, SIPPs and ISAs. Keeping track of whether these will deliver an adequate income in retirement is crucial.
Outliving your pension?
A retirement plan needs to look at more than just how much you’ve accumulated to date. It also needs to project forward, to understand how your savings might grow over time, what level of income they could generate in retirement, and how long the funds need to last.
It is clear many people underestimate this last factor, running the risk of outliving their savings by failing to save enough during their working lives, or spending their money too quickly in the early years of retirement.
Research by the insurance company Aviva highlighted this issue. One third of people in their 70s said they had already lived longer than they expected. Almost seven out of 10 of these retirees said they did not expect to live beyond 85. In reality, a man aged 70 can expect to live to 86, and women aged 70 to the age of 88. Both men and women aged 70 have a one in four chance of reaching their 92nd birthday – so clearly need sufficient retirement savings to cover this eventuality.
To return to that £240 a week State Pension – if that isn’t enough, what sort of income should you be targeting for retirement? A good starting point is Pensions UK’s Retirement Living Standards. These estimate the amount of money people will need to cover daily living expenses.
For a ‘moderate’ standard of living — which might include holidays and regular meals out — it calculates that a single person will need £31,700 a year (and a couple £43,900). This translates to a weekly income of around £610 a week for a single person, or £844 for a couple, significantly more than the State Pension currently pays. It’s clearly time to get serious about savings.
Risk warnings
Capital at risk. The value of your investment and the income from it can fall as well as rise and is not guaranteed, therefore you may not get back the full amount you invested.
Past performance is not a reliable indicator of future performance. Occupational pension schemes are regulated by The Pensions Regulator.
The Financial Conduct Authority does not regulate tax advice. Tax treatment varies according to individual circumstances and is subject to change.
Investment markets and conditions can change rapidly, as such, investments should always be considered long-term and should fit in with your overall attitude to risk, personal and financial circumstances. Investments do not offer the same level of capital security as deposit accounts.
This communication is for general information only, is a marketing communication, and is not intended to be individual investment advice, a recommendation, tax, or legal advice. The views expressed in this article are those of MHA Wealth or its staff and should not be considered as advice or a recommendation to buy, sell or hold a particular investment or product. In particular, the information provided will not address your personal circumstances, objectives, and attitude towards risk.
This information represents our understanding at the time of publication of current law and HM Revenue & Customs practice. Tax assumptions and reliefs depend upon an investor’s particular circumstances and may change if those circumstances or the law change. You are therefore recommended to seek professional regulated advice before taking any action. London, Midlands, South East, North West, Wales, Scotland.
MHA-UK MHA Wealth is the trading name of MHA Wealth Ltd, a company registered in England (01916615) with registered office at The Pinnacle, 150 Midsummer Boulevard, Milton Keynes, MK9 1LZ.
MHA Wealth is authorised and regulated by the Financial Conduct Authority (FCA) with registered number 143715 and is a member of the London Stock Exchange. MHA Wealth is a member of the MHA group.
Further information on the MHA group can be found at: www.mha.co.uk MHA is an independent member of Baker Tilly International Limited, the members of which are separate and independent legal entities.
Arrandco Investments Limited is the registered owner of the UK trademark for the name Baker Tilly. The associated logo is used under licence from Baker Tilly International Limited. Further information can be found via our website: www.mha.co.uk/terms-and-conditions. Publication date: 2 February 2026. ? 2026 MHA. All rights reserved
