Planning for retirement as a single person
Single people might have to plan earlier – and smarter – to afford the retirement of their dreams.
Key points
- Retirement planning for single people may require earlier preparation, with savings, bills and retirement income relying on one person.
- Single retirement planning can be more challenging due to unshared household costs and reduced financial flexibility.
- Retirement income for single people can come from pensions, investments and ISAs, depending on individual goals and circumstances.
- Women’s retirement planning may require additional consideration due to the gender pension gap and career breaks affecting pension contributions.
Holidays, council tax, household bills: just some of the ways life can be more expensive for single people. When it comes to pensions, single people might have to plan earlier – or just smarter – to have the retirement they want. You can usually access your pensions (apart from your State Pension) from the normal minimum pension age. This is currently age 55 and will increase to 57 from 6 April 2028. Keep in mind, tax rules can change and any benefits depend on personal circumstances.
Why retirement planning is different when you're single
While there are many benefits to being single, pension planning solo can present a different set of challenges to planning as a couple.
Saving from one income
The obvious challenge for solo pension planning is that you’re relying on your own income and pension benefits, whereas couples have two salaries, two pension pots, and two tax-free personal allowances to factor into their planning. As a result, a single person is likely to need more retirement savings than two individuals in a couple.
Everyday costs aren’t shared
People living on their own may find they spend more on everyday costs and bills than two-adult households who can split their costs. That means it can be trickier to put money into pensions and investments, even though it could be more needed.
Less financial flexibility
No-one likes unexpected costs, but for single folk they can be a burden. A broken boiler or an emergency medical bill might mean you have to dip into your savings, without the financial backup a partner could have provided.
A focus on independent wealth
If you’re single then you might have to put that extra bit of thought into your pension planning, with the goal to build wealth for your retirement.
Did you know that pensions can be split as part of a divorce settlement? If you’re divorced or going through a divorce, it could be important to consider this for your financial future.
How much do I need to retire as a single person?
Part of the planning process is knowing the target income for your retirement and what is a comfortable retirement income for a single person in the UK. This will depend on what age you want to retire at and the sort of retirement you want. The Retirement Living Standards website can help you understand what income you may need in retirement, depending on how lavish or modest you want yours to be. It shows that a single person spends around two-thirds of what a couple spends, mostly because we pay similar bills whether there’s one or two people in the house.
You could also use our pension calculator to help see what your pension could be worth in the future. Once you know what you can expect in retirement as it stands and you know what your target income is, you can figure out how to bridge the gap.
How to plan for retirement if you’re single
Figuring out where your retirement income is going to come from and how you can maximise it is a key part of retirement planning.
Here are some of the main sources of retirement income:
Pensions are a tax-efficient way to save for your retirement
Workplace pensions
This is what you (and your employers) have been paying into throughout your career. How and when you take money from your pension, though this will depend on your goals and the type of workplace pension you have.
State Pension
a regular payment that you can claim from the government once you’ve reached your State Pension age. The State Pension is pretty low and probably won’t be enough to support you on its own, but it can be a useful addition to your retirement income.
Personal Pensions
A flexible way to save for retirement. You can choose when you pay in, and how much. You can tweak payments, or stop and restart them, whenever you like. This makes it a good option if you’re self-employed or want to save a bit extra for retirement.
Investments can help you build your wealth over the long-term, but there are risks
Investments
An investment portfolio can outperform cash savings over a longer time, though market volatility means returns are not guaranteed. There are various types of investment you can put your money into, including bonds, funds, and shares.
ISAs
An ISA lets you invest up to £20,000 a year, with any income and gains earned free from income and capital gains tax. This money can be invested in different ways, depending on the sort of risk level you want, and it’s normally easy to withdraw it if you need to cover any unexpected costs.
The value of your investments can go down as well as up, and you may get back less than you’ve paid in.
Once you have an idea of how much money you’ll need in retirement, you can plan how to save and maintain that amount. Here’s some ideas:
Diversify your income streams
Spreading your money across different income sources can create a stronger retirement portfolio that’s more resilient to risk – if one investment does poorly, others might do well and make up for it.
Make your money work harder
If you have a few pension pots, you could combine them into one, so you’re not paying more charges than you need to. You could also get clued up on potential tax advantages you could benefit from, to help negate some of the extra costs of being single. This could mean putting more money into a private pension or workplace pension rather than investments, to benefit from increased employer contributions where applicable, as well as tax relief on your contributions.
Create a sustainable withdrawal strategy
Make your money last and figure out how much you can withdraw without emptying your pension pot. The amount you can take will depend on personal circumstances, but a method that is often cited as safe and effective for drawdown is the 4% withdrawal rule. This is where you take no more than 4% of your pension pot each year, only adjusting annually for inflation.
Retirement planning for a single woman
Women in particular need to think about retirement planning, as they tend to have a smaller pension pot than men due to the gender pension gap. Part of the reason this gap exists is because women are more likely to take time out of work to have and care for children, resulting in less workplace pension contributions. The costs associated with childcare can also particularly impact single parents, who have to front the bills themselves and leaving less cash to save or invest.
As a result, women often need to plan for retirement differently than men and think more carefully about their retirement income, boosting pension contributions, or splitting pensions in the event of a divorce.
Single people might have a little more financial pressure when it comes to retirement, but it means that you’re fully in control of your plans and, once you hit the hallowed age, you can spend it doing exactly what you want when you want.
If you need a bit of guidance on your retirement planning, and have pension or investment savings of £300k or more, then our pension advice and retirement planning service could be right for you. Your first appointment is free, so you can discuss your goals and decide if our pension advice is right for you. Should you proceed, your adviser will explain all fees upfront.
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