Retiring at 50 is a dream of many wanting to escape the corporate rat race. The price for those keen for an early retirement with a bit of luxury in their later years? Around £800,000, rising to a cool £1 million when adjusted for inflation.
That’s the cost to quit work at 50 and live until age 95 at the Pensions and Lifetime Savings Association’s (PLSA) new ‘comfortable’ standards. Updated for 2025/26, these now show that for a higher-end retirement you’ll need £43,900 a year, an increase of £800 on last year’s figures.
The cost of a middle-of-the-road retirement, what the PLSA calls ‘moderate’, has also jumped, this time by £400 to £31,700 a year. If you want to retire at 50 on that level of income, the price tag is a slightly more modest £530,000 in pensions, savings and investments, £790,000 after inflation.
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These calculations have been carried out exclusively for MoneyWeek by self-invested personal pension (Sipp) provider Alltrust, and financial planning firm AAF Financial, which have also worked out how much you need to save to get there.
You would need to make significant investments to achieve your nest egg for your million pound comfortable early retirement by age 50. Some people will potentially require a time machine.
If you started at age 25, you’d need to make a monthly commitment of £516 into a stocks and shares ISA and £1,326 into a pension, a total of £1,843.
Wait 10 years to start at age 35 and that jumps to £1,150 into an ISA and £2,960 into a pension, giving a grand total of £4,100 invested every month. Start at age 40 and assume another doubling.
To get your pot of £530,000 for your moderate retirement, you’ll need to be investing £1,330 a month – £370 into an investment ISA and £960 into a pension. That’s if you start from age 25.
From age 35 that more than doubles to monthly savings of £2,965 – with £824 into an ISA and £2,140 into a pension. Again, double once more if you're starting at 40.
James Floyd, managing director at Alltrust, said: "These calculations expose the harsh mathematics of early retirement. While achievable for high earners with disciplined savings habits, retiring at 50 with PLSA comfort levels requires sacrifices most people would find difficult to sustain over 25 years.”
However, with a plan, it is possible, Paul Uings, private client director at AAF Financial, said: “In order to hit your specific retirement goals, even the smallest change can have a large long term impact.
“Ensuring you have a cost-effective pension plan with a tailored investment strategy, reviewed on a regular basis, can not only reduce your level of contributions required but get your retirement savings working for you to help hit your goals.
“As always, the earlier you start, the less financial pressure there will be further down the line.”
How much you need to retire at 50: the breakdown
Ultimately how much you’ll need in retirement will depend on your personal goals for later life and the opportunity you have to save and invest towards them while you are still working.
But retiring at 50 creates a unique financial puzzle with three distinct phases, each presenting its own mathematical hurdles. It needs to be looked at as a three-phase challenge.
1. Bridge years (age 50 to 57 years)
The earliest someone in the UK can take their private pension – known as the normal minimum pension age (NMPA) – is currently age 55. But barring any (unlikely) dramatic changes, this is rising to 57 from 2028. We’re using the later date for our calculations.
This means from ages 50 to 57 of your early retirement, your income must come entirely from ISAs or taxable investments.
Assuming investment growth of 4% to 5% a year, and 0.75% annual charges, for these seven ‘bridge’ years of spending Alltrust calculates you’ll need approximately £189,000 for a moderate retirement or £261,000 for a comfortable one.
Adjusted for inflation, AAF Financial pegs it at £220,500 and £307,300 respectively.
2. Pre-state-pension years (age 57 to 66 years)
Once you hit 55 (soon to be 57) you can start drawing down from your pension. Private pension pots must fund nine further years until state pension age at 66.
Assuming the same level of growth, and charges, you’ll need a pot worth around £233,000 for a moderate living standard during the pre-state pension years or around £323,000 for a more comfortable lifestyle.
(Bear in mind too the state pension age is rising to 67 between April 2026 and March 2028 for those born after April 1960. A further rise to 68 is scheduled between 2044 and 2046.)
3. State pension years (from age 66 to 95)
The full new state pension in the UK, as of April 2025, is £230.25 per week, which translates to £11,973 per year. Our calculations assume the retiree receives it in full and that it keeps its real value with increases of at least 2.5% a year.
The top-up (in addition to the state pension) required from private pensions to bring the retiree’s income in line with the PLSA standards from age 66 to age 95 is about £348,000 to achieve a moderate lifestyle or £549,000 for a comfortable one (again assuming growth of around 4.5% and annual charges of 0.75%).
Total required at 50?
To pay for these stages in total and live to age 95, by age 50 you’ll need savings and investments of roughly £541,000 for a moderate lifestyle or £784,000 for a comfortable one, (assuming 4% to 5% net growth after charges).
This rises to £792,500 and £1,097,500 respectively when adjusted for inflation.
AAF Financial’s Paul Uings said: “If you are planning on retiring at 50 and concerned your financial plan is not robust enough, there are several flexible options that can help you improve your work-life balance, reduce stress and help you on your way to achieving financial freedom.
“These include phased retirement, contracting, planned downsizing or alternatively, continuing work for a few more years – the additional years saving, especially at your earnings peak, can make all the difference.”
Potential problems with retiring early at 50
The harsh reality behind these calculations reveals several uncomfortable truths, Alltrust’s James Floyd pointed out.
- Consistent real returns of 4%+ are not guaranteed. A decade of poor performance during the crucial accumulation phase could derail plans entirely.
- Life seldom follows a perfect earnings path free of redundancy, illness or caring breaks. We've assumed 25 years of uninterrupted high-level saving – a luxury few enjoy.
- Investment charges and inflation erode returns over time. Our 4% to 5% assumptions factor in 0.75% annual charges but assumes steady growth that markets rarely deliver.
Ways to achieve early retirement at 50
For those serious about early retirement, however, there are several strategies that might ease the savings and investments burden.
Entrepreneurship – Business Asset Disposal Relief offers 10% capital gains tax up to £1 million in your lifetime. For business owners this could potentially turbo-charge their wealth accumulation post-sale of their firm far more efficiently than employment savings.
Property or geo-arbitrage – Owning rental property while living in lower-cost locations can cut drawdown requirements substantially. However, liquidity and management considerations apply.
Partial work – Modest freelance income during your fifties dramatically slashes the bridge-fund requirement. Even £10,000 annually from consultancy reduces the ISA burden by over £60,000 in present-value terms.
Family wealth – Inheritance planning might supplement retirement funds, though relying on others' mortality for your financial freedom is a precarious strategy.
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