The State Pension currently provides a maximum of £10,600 per year (gross) for those who didn't reach State Pension age prior to 2016. Whether the State Pension will be available in its current form in the future is another question entirely, however, for the purposes of this piece, we’ll assume that it is. Although it may seem relatively small and insufficient to meet even the individual's 'minimum' level of spending needs in retirement (according to the review), it can nonetheless form part of the building blocks of one’s retirement funds.
Fortunately, at the current level, if a couple had two sets of full State Pension entitlement, they’d meet the 'minimum' income requirement with even a small surplus. Individuals may of course have other sources of income, such as final salary pensions or investment income, but we have focused on pension income in this insight.
If you’re an individual, you need to top up your net income by £2,200 per year in order to meet the 'minimum' standard. We calculate that you might need c. £49,000 invested in a pension at age 66 to generate this. These are based on assumptions detailed below and are of course subject to change and shouldn't be relied upon.