Average Pension Pot at Age 60 in the UK
If you are 60 and wondering how your pension savings compare, you are not alone. Understanding the average pension pot at your age can help you assess whether you are on track for the retirement you want, and what steps you might need to take if you are falling behind.
According to the latest available data from the ONS Wealth and Assets Survey and industry analysis, the average pension pot at age 60 in the UK is approximately £165,000. However, the median (which better represents the typical saver) is significantly lower at around £95,000.
Average vs Median: Why the Difference Matters
The average pension pot is pulled up significantly by a small number of very wealthy individuals. The median – the midpoint where half of savers have more and half have less – gives a more realistic picture of where most people stand.
| Measure | Amount at Age 60 | What It Means |
|---|---|---|
| Average (mean) | £165,000 | Skewed by high earners; not typical |
| Median | £95,000 | More representative of most savers |
| Target for moderate retirement | £370,000 | PLSA moderate standard benchmark |
How Much Should You Have at 60?
The amount you need depends on your target retirement age and the lifestyle you want. Using the PLSA Retirement Living Standards as a guide:
- Minimum lifestyle (£14,400/year): The State Pension covers most of this, so your private pension needs are relatively modest.
- Moderate lifestyle (£31,300/year): You need approximately £19,327 per year on top of the State Pension, requiring a pot of around £370,000 by retirement at 67.
- Comfortable lifestyle (£43,100/year): You need approximately £31,127 per year above the State Pension, requiring a pot of around £600,000 by retirement at 67.
Working backwards from these targets, at age 60 you should ideally have around £370,000 saved to be on track for a moderate retirement lifestyle (assuming continued contributions and investment growth until retirement at 67).
Catching Up at 60
If your pension savings are below the target at 60, do not panic. There are still effective steps you can take:
- Maximise your annual allowance: You can contribute up to £60,000 per year (or 100% of earnings). Use carry forward to utilise unused allowance from the previous three years.
- Review your investment strategy: With 7 years until State Pension age, ensure your investments are working hard enough. A portfolio that is too conservative may not generate sufficient growth.
- Check for lost pensions: The average UK worker has 11 jobs over their lifetime. Use the Government's Pension Tracing Service to find old workplace pensions you may have forgotten.
- Consider delaying retirement: Working even 2-3 years longer dramatically improves your retirement outlook, both through additional contributions and fewer years of drawdown.
- Review your employer contributions: If you are employed, check whether your employer offers contribution matching beyond the minimum. This is free money you should take advantage of.
How Auto-Enrolment Affects Pension Pots at 60
Auto-enrolment, introduced in 2012, requires employers to contribute at least 3% of qualifying earnings to a workplace pension, with employees contributing at least 5%. For someone earning £30,000, the minimum total contribution is approximately £2,160 per year.
If you are 60, you may have spent much of your career before auto-enrolment was introduced. This means your pension savings may be lower than younger workers who have benefited from employer contributions throughout their career. Making up this shortfall requires active planning.
Drawdown vs Annuity Income Projections
Based on the average pot of £165,000 at age 60, if you were to retire at 67 with this amount (assuming 5% annual growth and no further contributions), your projected pot at retirement would be approximately £232,172. From this, you could expect:
- Tax-free cash: £58,043
- Annuity income: Approximately £9,055 per year
- Drawdown income (4%): Approximately £6,965 per year
What You Can Do Today
- Check your State Pension forecast: Visit gov.uk/check-state-pension to see your projected State Pension and whether you have any gaps in your National Insurance record.
- Review all your pensions: Log into each provider and check your current balances, investment choices, and charges.
- Consider consolidation: Merging old workplace pensions into a single SIPP can reduce fees, simplify management, and give you better investment options.
- Set a target: Based on the lifestyle you want, calculate how much you need by retirement and what monthly contributions are required to get there.
- Get advice if needed: If you have multiple pensions or complex circumstances, a regulated financial adviser can help you create a personalised retirement plan.