The Staggering Figure Needed To Match The Full State Pension

4th September 2024

The state pension is now worth £250,000 to retirees, research shows.

Pensioners aged 66 qualify for the full state pension paying £11,502.40 a year if they have paid National Insurance (NI) contributions for 35 years. However, buying an annuity that guarantees this same rate of income for life would require a private pension pot worth a quarter of a million pounds, according to pension provider Aegon.

To build a pot this big, a worker would need to save £228 per month into their pension over 45 years. This assumes annual 3pc earnings growth, 4.25pc investment growth and 2pc inflation.

It comes amid concern that Labour may be tempted to means-test the benefit. This would mean wealthier retirees receiving a lower state pension or being denied it altogether.
Steven Cameron, of Aegon, said the £250,000 figure was "staggering" and highlighted how many people were reliant on the monthly payments.

He said: "The fact is that the state pension is worth a huge amount of money. For millions of people, the state pension is the bedrock of their retirement plans.

"Any suggestion that it might be ‘means tested' would send shockwaves through the pensioner community, impacting hugely on living standards for all but the truly wealthiest of wealthy.

“Unless you've built up a pot of over a quarter of a million pounds in your private or workplace pensions, the state pension will make up the majority of your retirement income.

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