How close – or far – are you from saving enough money for your retirement? And just how much DO you need to retire?

These are two questions our retirement gap calculator aims to help you answer. Just follow our prompts to work out what your cost of living is, including everything from cleaning products to pet costs. Then input your potential sources of income, for example state and private pensions, rental income and ISA savings, and we will calculate any retirement income gap:

To get your free copy of our retirement gap calculator, just add your email address below and we will send a link to the calculator and a short video guide to using it.

Why is our retirement gap calculator important?

Currently, too many people in the UK are sleepwalking into pension poverty. According to the government, the estimated pension pots of women aged 55 to 59 in 2020 to 2022 was just £81,000. For men it is £156,000.

When we look at the cost of living in retirement, according to Retirement Living Standards, a single person needs £31,700 a year and a couple £43,900 for a moderate standard of living.

If we deduct the full State Pension (currently £11,973) from this sum, a single person needs to fill an annual gap of £19,727 and a couple need an extra £19,954.

In order to achieve an annuity of £22,000 a year, you would need a pension pot of approximately £500,000. If you opt for a drawdown pension, again you would need roughly £500,000 to provide an annual income of between £20,000 to £25,000.

Why I don’t want you to be scared about these numbers

I don’t share these figures because I want to scare you. Instead I want to help people understand how important it is to take positive action to save for our retirement. Whatever your age and current situation, taking action now can make your retirement easier, thanks to the power of compound interest.

Our retirement gap calculator is also designed to help you play with your expenses, and see what happens when you reduce some of your outgoings, so you can make informed decisions on what kind of lifestyle you want and can afford.

One of the many reasons why the gender pension gap exists is a lack of financial confidence in women. According to the Gender Retirement Planning report, 60% of women report not having a plan for their
finances in retirement, and only 41% of working age women say they understand enough about pensions
to make decisions about retirement.

Knowledge is the first step in taking responsibility for our finances, and positive action to plan for a more comfortable retirement.