We’re often told to save more for retirement, but have you ever stopped to think about how your pension pot compares to your peers?
Is your pension wealth keeping up with the Jones’s? How does your nest egg stack up against people of a similar age to you?
Saving for retirement can be difficult when you’ve got so many other competing priorities for your money, such as paying a mortgage or putting kids through private school. The state pension will pay you a base income (about £11,975 a year if you qualify for the full new state pension), but this is not enough for a comfortable retirement.
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According to the Pensions and Lifetime Savings Association (PLSA), a “comfortable retirement” costs £43,900 a year for a single person, or £60,600 a year for a two-person household. This allows for spending on luxuries such as regular beauty treatments, theatre trips and a fortnight’s holiday in Europe each year.
For this level of retirement, the PLSA calculates that someone living alone would need a pension pot of about £540,000 to £800,000, if using it to buy an annuity for a guaranteed income. For two people sharing bills, it falls to £300,000 to £460,000 each.
Self-employed workers have it particularly hard, and could be more at risk of pensioner poverty. While employees benefit from auto-enrolment and receive employer contributions into their pension, freelancers must open and pay into a pension by themself.
Comparing ourselves to others in the same age bracket can highlight some trends and show us how we’re doing versus the average. But, remember that everyone’s circumstances are different – for example, in terms of salary and retirement goals. Average pension balances can be skewed by super savers with high balances or low-paid workers starting out with small amounts.
Pension wealth also differs for men and women, as evidenced by the so-called gender pension gap, which shows that women have £85,000 less than men on average by the time they reach retirement age.
The size of your pension pot is often directly related to your net worth – you can discover the average net worth by age using our guide.
If your pension pot is higher than the average for your age group, don’t assume you’re all set to achieve your retirement goals. Regardless of how you compare to your peers, are you actually on track to afford your own dream retirement?
If you’re hoping to finish work and retire early, you will also likely need a larger pension than average, or other types of wealth that can produce an income.
And if your pension savings are lower than average for your age group, try not to get stressed. Think about whether your pension savings are on track to meet your goals for later life. If they are, keep calm and carry on. If they’re not, now’s a great time to think about what you can do to enhance your nest egg.
Even if your retirement is many years away, the steps you take today can make a big difference to your quality of life in the future.
Source: Pension wealth: wealth in Great Britain, 2020-2022, ONS, published January 2025. Only includes people with pension wealth, those that have zero pension savings are excluded in the figures.
Unsurprisingly, the youngest people have the smallest pension pots. Those aged 16 to 24 have average pension wealth of £5,500.
This figure then more than triples to £18,800 once we get into the 25 to 34 age bracket, where the vast majority of people are working.
The average amount roughly doubles to £39,500 for the 35-44 age group. Average pension wealth peaks when savers are aged between 55 and 74, with around £140,000 tucked away for retirement.
It then falls to £59,700 for those aged 75 and over as they start to spend their savings in retirement.
The ONS data also highlights the gender pension gap, with men having more in their pensions than women at every age group. For example, the average man aged 45 to 54 has £108,100 in pension wealth. But the average woman only has £57,900.
By the time pension savers reach retirement, the gender gap has widened to £85,000.
Pension pots have actually got bigger for the younger generations over the past few years, according to the ONS, while they have got smaller for older people. This could be due to auto-enrolment boosting pension wealth for young workers.
At the same time, baby boomers with fat pension pots are starting to fall out of the statistics and are being replaced by a growing number of people approaching retirement who don't have final salary schemes.
For example, the average pension wealth has doubled for a 25 to 34-year old from 2018-20 to 2020-22 (from £9,500 to £18,800). But for a 65 to 74-year old, the figure has dropped from £190,000 to £145,900.
Some pension providers have also done research into how much pension pots are worth for different age groups. Fidelity surveyed 2,000 UK non-retired adults in May last year to find out their total pension wealth.
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Header Cell - Column 0
Men
Women
Average UK adult
Average
£76,700
£42,600
£59,650
Aged 18-34
£59,700
£30,400
£45,050
Aged 35-54
£80,300
£46,800
£63,550
Aged 55+
£114,000
£66,800
£90,400
Fidelity's figures reveal a similar, sizeable gender pension gap.
Meanwhile, PensionBee gave the following figures to MoneyWeek showing the average pension of its customers:
Aged 18-29: £3,609
Aged 30-39: £10,372
Aged 40-49: £23,807
Aged 50 and over: £42,503
Don’t panic if you’re lagging your age group
What may look like a low pension balance today can grow in value over time with steady saving, tax relief, investment gains and compounding.
“Trying to build up a good level of pension savings can feel like a big mountain to climb but it is precisely the regular drip feed of contributions mixed with long-term investment growth that can see the amount you build up really grow over the years,” comments Helen Morrissey, head of retirement analysis at Hargreaves Lansdown.
“Taking regular actions like increasing contributions as and when you have extra cash – for instance if you get a pay rise – can make a huge difference. Using pension calculators can also give you some insight into how much you are on track to receive and the impact of boosting your contributions on your retirement income.”
Lisa Picardo, chief business officer UK at PensionBee, echoes this advice: “The first course of action should be to check in on your current pension contributions and consider raising them by 1 or 2% if you can afford to do so. As pensions benefit from compound interest, even making small regular or one-off contributions now can significantly increase the size of a pension pot over time.”
She adds that it's encouraging to see that younger savers are forecast to accumulate larger pension pots than previous generations, “but the persistence of the gender pension gap is extremely disappointing”.
Picardo notes: “It is vital that female savers are supported in saving as much as into their pension from early on in their careers, as we know the pension gap only widens with age. For those with caring responsibilities, it’s important to continue paying into your pension in whatever quantity you can. This could also mean asking a partner to pay into your pension for you if it makes sense to do so.”
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Ruth is an award-winning financial journalist with more than 15 years' experience of working on national newspapers, websites and specialist magazines.
She is passionate about helping people feel more confident about their finances. She was previously editor of Times Money Mentor, and prior to that was deputy Money editor at The Sunday Times.
A multi-award winning journalist, Ruth started her career on a pensions magazine at the FT Group, and has also worked at Money Observer and Money Advice Service.
Outside of work, she is a mum to two young children, while also serving as a magistrate and an NHS volunteer.
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