What Is the Average UK Pension Pot

What Is the Average UK Pension Pot?

Knowing the average pension pot in the UK can give you a useful benchmark for your own retirement savings. While everyone’s circumstances are different, understanding how much people typically save can help you assess whether you are on track to meet your goals.

This article explains what the average pension pot looks like in the UK, how it varies by age, and what you can do to grow your savings.

What is a pension pot?

A pension pot is the total value of your defined contribution pension, which includes:

• Personal pensions

• Workplace pensions

• Self invested personal pensions (SIPPs)

It does not include defined benefit pensions, such as final salary schemes, which pay a guaranteed income for life but do not have an individual pot value.

What is the average pension pot in the UK?

According to recent data from the Financial Conduct Authority and industry studies, the average pension pot values for defined contribution pensions are:

• Ages 25 to 34: around £10,000

• Ages 35 to 44: around £30,000

• Ages 45 to 54: around £50,000 to £60,000

• Ages 55 to 64: around £90,000 to £120,000

These are only averages. Some people will have far more, and many will have less. These figures also do not include the State Pension or other retirement income sources.

Is the average pension pot enough?

In most cases, the average pension pot is not enough to fund a comfortable retirement on its own. According to the Pensions and Lifetime Savings Association (PLSA):

• A single person needs about £14,400 per year for a minimum retirement

• About £23,300 per year is needed for a moderate lifestyle

• Around £37,300 per year supports a more comfortable retirement

To provide a moderate income alongside the full State Pension, you would need a pension pot of around £250,000 to £400,000, depending on how and when you draw it.

What is the average State Pension?

As of the 2024 to 2025 tax year, the full new State Pension is £221.20 per week, which is about £11,500 per year. You need 35 qualifying years of National Insurance contributions to receive the full amount.

While this provides a useful foundation, most people will need extra savings to achieve their desired retirement lifestyle.

Why are pension pots often smaller than needed?

There are a few common reasons why pension pots fall short:

• Many people start saving too late

• Some only contribute the minimum required through auto enrolment

• Pensions may be left untouched when changing jobs

• A lack of awareness or planning

Even small increases in pension contributions can make a big difference over time due to compound growth and tax relief.

How can I grow my pension pot?

If you are concerned about the size of your pension pot, here are a few ways to improve it:

1. Increase your contributions

Try to contribute more than the minimum. A good target is to save around 15 percent of your salary, including your employer’s contribution.

2. Start early

The earlier you begin, the more time your pension has to grow. Even small amounts saved in your twenties and thirties can build up significantly by retirement.

3. Consolidate old pensions

If you have several small pension pots from different jobs, consider combining them. This may reduce fees and make your savings easier to manage.

4. Review your investments

Check whether your pension is invested in the right fund for your age and risk tolerance. Most providers offer options for different life stages.

Final thoughts

The average UK pension pot is a helpful reference, but it is not necessarily the ideal target. Most people will need to save significantly more than the average to enjoy a comfortable retirement, especially if they do not have other income sources.

If you are not sure whether you are on track, consider using a pension calculator or speaking to a financial adviser. By taking action now, you can give yourself the best chance of reaching your retirement goals.