New analysis of government figures[1] highlights that the average retired UK couple has a pension income worth £284 per week, made up of both occupational and private pension income and excluding State Pension income.

For those approaching retirement who have a similar weekly income target in mind, to buy a ‘level’ annuity which would guarantee this income for life, but might not maintain purchasing power for future years, they would need to have amassed £267,000 in retirement savings.


Meanwhile, the top fifth of pensioner couples have pension incomes of £704 per week. This requires a savings pot of £660,000 to secure the same type of annuity and guarantee their income for life. To buy an ‘index-linked’ annuity, which increases income in line with inflation, the required pot is considerably larger. However, this provides an income that is more likely to keep up with cost increases.

The analysis comes as annuity rates are, however, rising. Rates are estimated to have improved by 25%[2] since the start of the year, meaning that savers can generate larger incomes from their savings.


The analysis also found that over the last ten years, the average income of retired couples has increased by around 7% in real terms.  The richest fifth increased by 4%, compared to 7% for the least well-off pensioners.

It is encouraging that over the past ten years pensioners’ incomes have increased in real terms. However, in the current environment with inflation having recently reached double figures, there is an increased challenge of making money last.

So, even while we are in a challenging situation that can lead to a focus purely on short-term finances, if you’re able to continue paying attention to your long-term pension savings, it will be extremely worthwhile by the time you come to retire.

  • Revisit your financial goals – As you start to notice the effects of increased prices, you might find that your current financial goals could take longer to reach than originally planned, or they might need to be adjusted. So now could be a prime time to revisit your plans and consider if they need to change.
  • Have a Direct Debit detox – Many of us sign up to memberships and subscriptions that we could probably live without.  So, have a think about whether you could cancel them or shop around for a better deal. You might be surprised at how much money you could save.
  • Prioritise your spending – It’s worth seeing if you can put off purchases you’d planned for a while longer. If it’s not essential, you might be better waiting until you’re confident that making that purchase now won’t impact your standard of living. However, if you’ve been thinking about making a big purchase, such as a car or a required home improvement, and you have the money to do so, you might find you’d be better off going ahead now rather than waiting until later when prices could be even higher and the pound in your pocket is worth less, saving you money in the long run.
  • Try to clear any outstanding debt – When inflation rises, interest rates are generally increased to help control the economy. If you have any variable rate debt, you might find that your regular payments go up as a result. So, it’s best to review debt arrangements as a priority, making sure you are reducing interest being paid as much as possible.
  • Make the most of tax-efficient savings and consider making investments – It’s worth bearing in mind that you receive tax benefits on pension payments, effectively meaning it costs less to save more into a pension plan.

So even if you’re focused on short-term finances at the moment, it’s important to continue contributing to your pension. Time in market is one of the most important factors in investing, and if you choose to stop contributing you could miss out on valuable contributions from your employer. Although remember that you can’t access your pension savings until you’re aged 55 (rising to 57 in 2028 unless you already have a plan with a protected pension age).

If you want to access your money before age 55, while giving your savings the opportunity to grow in line with inflation (and, importantly, stand a chance of beating it), it’s advisable to invest over the medium to long term, which is generally five years or more. Stocks & Shares Individual Savings Accounts (ISAs) are a tax-efficient way to save for medium or long-term goals without having to tie up your money.

Or you could consider a Cash ISA for shorter-term goals like rainy day funds – but, of course, be mindful of the impact of inflation on the value of these.


Start talking to us today about your future retirement plan. We can help you make sure it’s a resilient one. We understand that your goals, aspirations and dreams are unique to you and we’d love to discuss how we could help.

To discuss any of the issues raised in this article, please contact us. Further information can also be found at

Source data:

[1] According to Pensioner Income Series Data –

[2] Figure is based on Standard Life internal analysis of market annuity rates as at July 2022

 A pension is a long-term investment not normally accessible until age 55 (57 from April 2028 unless plan has a protected pension age).

The value of your investments (and any income from them) can go down as well as up which would have an impact on the level of pension benefits available.

Your pension income could also be affected by the interest rates at the time you take your benefits.

The value of your investments can go down as well as up and you may get back less than you invested.

Personal circumstances differ and not all of this information is applicable to every client and/or their business, this information is general in nature and should not be relied upon without seeking specific professional financial advice.

The Financial Conduct Authority (FCA) does not regulate tax advice, estate planning, trusts or will writing.

The content in this article is for your general information and use only and is not intended to address your particular requirements. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice.

Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of any articles.

Thresholds, percentage rates and tax legislation may change in subsequent finance acts. Levels and bases of, and reliefs from, taxation are subject to change and their value depends on the individual circumstances of the investor. The value of your investments can go down as well as up and you may get back less than you invested. Past performance is not a reliable indicator of future results.

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