Is £500,000 enough to retire on?
A £500,000 pension pot gives you £31,502/yr through drawdown plus the state pension — that's £606/week. Here's how that stacks up against what you actually need.
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Check your scoreA £500,000 pension pot puts you well above the UK median and into the range where a genuinely comfortable retirement is achievable. At 4% drawdown plus state pension, you'd have around £31,502/year — above the PLSA "comfortable" standard.
At this level, tax efficiency becomes the primary concern. Pension drawdown is taxed as income, so how you structure your withdrawals across tax years can save you thousands. If you also have ISA savings or other assets, coordinating which pot you draw from in which year is worth professional advice.
You should also consider the inheritance implications. DC pensions are generally outside your estate for inheritance tax purposes — which makes them one of the most tax-efficient assets to pass on. If you have other income sources, it may be worth drawing from those first and letting your pension grow.
- •Drawdown income uses the 4% rule (withdrawing 4% of your pot per year). Actual sustainable withdrawal rates depend on investment returns, fees, and how long you live.
- •Annuity rates are illustrative market averages and will vary by provider, health, and annuity type. Get multiple quotes before buying.
- •State pension (£11,502/yr) assumes a full 35-year National Insurance record. Your entitlement may differ — check at gov.uk.
- •Target pots use the PLSA Retirement Living Standards (2024/25 single-person figures) and assume retirement at 67 lasting to age 87.
- •All figures are in nominal terms and do not account for inflation. The purchasing power of your pot will be lower in future years.
- •This is general information, not personal financial advice. For personalised guidance speak to an FCA-regulated financial adviser.
This calculator provides estimates based on 2025/26 tax rates and is not financial advice. Scottish taxpayers are subject to different income tax rates and bands. The calculations assume your salary is your only source of income and do not account for benefits in kind or other taxable income.
For personalised guidance on your pension contributions, speak to an FCA-regulated financial adviser. You can find one via Unbiased or VouchedFor.