The UK retirement funding gap

Many people reach retirement with a pension income that falls short of what a decent standard of living is said to cost. The difference is the retirement funding gap. This page sets the widely cited cost of retirement against a typical pension income, shows the annual shortfall, and gives a rough sense of how much property wealth might be needed to bridge it. The cost figures are anchored to the PLSA Retirement Living Standards and the rest is clearly labelled.

The required income anchor. The cost-of-retirement figures use the Pensions and Lifetime Savings Association (PLSA) Retirement Living Standards for a single person, given as indicative annual amounts: minimum around 14,400 pounds, moderate around 31,300 pounds, and comfortable around 43,100 pounds. These are PLSA figures and indicative. Confirm against the latest PLSA publication before relying on them.

Illustrative income and bridge. The typical pension income column and the property wealth bridge are illustrative worked examples to show the format, not sourced statistics. The bridge is a simple multiplication of the annual gap over a 20 year horizon, for scale only. It is not a financial projection and ignores investment growth, interest, inflation and drawdown. Do not quote these as fact.

Retirement funding gap by living standard, single person (required anchored to PLSA, rest illustrative)
Living standard	Required income (PLSA, per year)	Typical income (illustrative)	Annual gap	20yr bridge (illustrative)
Minimum	£14,400	£11,500	£2,900	£58,000
Moderate	£31,300	£18,000	£13,300	£266,000
Comfortable	£43,100	£22,000	£21,100	£422,000

Source: Required income: PLSA Retirement Living Standards (indicative). Typical income and bridge: illustrative worked examples only.

Copy this data as text

| Living standard | Required income (PLSA, per year) | Typical income (illustrative) | Annual gap | 20yr bridge (illustrative) |
| --- | --- | --- | --- | --- |
| Minimum | £14,400 | £11,500 | £2,900 | £58,000 |
| Moderate | £31,300 | £18,000 | £13,300 | £266,000 |
| Comfortable | £43,100 | £22,000 | £21,100 | £422,000 |

Source: Required income: PLSA Retirement Living Standards (indicative). Typical income and bridge: illustrative worked examples only.

What the gap means

The state pension, even at the full new rate, sits below the PLSA minimum standard for many single people once essentials are paid. A modest private pension closes part of the gap to a moderate lifestyle, but reaching the comfortable standard from pension income alone is out of reach for a large share of retirees. That is where property wealth enters the picture. For a homeowner, the value in the house is often far larger than the pension pot, which is why later life lending and equity release are discussed as one way to top up income across retirement.

The property wealth bridge

The final column gives a rough sense of scale: if you wanted to close the annual gap for around 20 years purely from released property wealth, this is the order of magnitude involved, before any interest. In reality a lifetime mortgage charges interest that compounds, so the true cost of bridging a gap this way is higher than a simple multiplication suggests, and the amount you can release depends on your age and home value. The figure is here to show the size of the problem, not to model a solution. A real plan needs your own numbers and advice.

How this is measured

The required income figures are the PLSA Retirement Living Standards for a single person, quoted as indicative annual amounts and to be confirmed against the latest PLSA publication. The typical pension income column is an illustrative worked example, not a measured average; a sourced version would draw on ONS and DWP pensioner income data and the FCA Financial Lives survey. The property wealth bridge is a plain multiplication of the annual gap over a 20 year horizon, shown for scale only and not a projection. Where a figure here is labelled illustrative or indicative, do not treat it as a confirmed statistic. Last reviewed June 2026.