- On average, taxpayers aged 65-69 received incomes of £26,200 in 2023/24
- This is more than two-thirds of average peak income for taxpayers – one rule of thumb for retirement income goals
- However, income fell with age to £22,700 for taxpayers aged 70-74 and £21,800 for those aged 75 and over – both less than two thirds of the peak
- It was also lower for women – women taxpayers aged 65-69 received an average of £23,000 in 2023/24, while the men received an average of £29,600
- It also falls short of the Retirement Living Standards figure for a moderate retirement income – which at the time was £31,300 or £43,100 for a couple
- It falls short of what people expect to need as AJ Bell research last year showed on average we think we need £39,000 a year for a comfortable retirement
- HMRC’s figures exclude anyone not earning enough to pay income tax, so these are relatively well-off pensioners
Figures from HMRC’s latest Personal Incomes Statistics, released 29 April 2026: Personal Incomes Statistics for the tax year 2023 to 2024 - GOV.UK except where otherwise stated.
Sarah Coles, head of personal finance at AJ Bell, comments:
The bad news
“The average taxpayer in retirement doesn’t have enough income for a moderate standard of living, and falls well short of the levels that the average Brit is hoping for.
“AJ Bell analysis of government data shows that on average, taxpayers aged 65-69 received incomes of £26,200 in 2023/24. This fell a long way short of the Retirement Living Standards figure for a moderate retirement income at the time, which was £31,300 (£31,700 this year). It’s also a long way short of the sums people expect to need after they stop work. AJ Bell research last year showed that on average, people expected to need £39,000 to live on in retirement.
“The figures are even more stark for older retirees, because income falls with age so that taxpayers aged 70-74 received an income of £22,700 a year and those aged 75 and over had £21,800 to live on.
“When you break the figures down by gender, it shows that female taxpayers are even more stretched. Women taxpayers aged 65-69 received an average of £23,000 in 2023/24, while men received an average of £29,600, and women got less as they got older, so those aged 70-74 received £20,600 and those aged 75 and over received £20,300.
“And these are the comparatively wealthy retirees. The government figures only count those with enough income to pay tax, so anyone earning below the personal allowance, is excluded from the average.
The good news
“However, things aren’t quite as bad as they seem. For a mixed sex couple living together, on average they meet the Retirement Living Standards moderate income for a couple – even as they get older. Clearly one of every couple will end up living alone, but unless they are living off a single life annuity or their spouse has spent all of their pension, they should usually still get some benefit from their partner’s pension.
“These standards are also a fairly blunt instrument, because they don’t take account of the income you might be used to while you’re working. Given that the average income for a taxpayer in their late 40s – when income peaks – is £36,700, the moderate retirement figure starts to feel a bit punchy. An alternative rule of thumb is to aim for roughly two thirds of your salary, which in this case would be £24,447, which is less than the average taxpayer’s income in their late 60s.
“The amount of money you need in retirement isn’t the same for the entire period either. While someone in their late 60s might want to fund a lifestyle of travel and socialising, someone in their late 70s might opt for something less active. Having a lower income later may be no problem at all.
“The figures of what people think they need in retirement are also skewed by younger people. Gen Z – those aged between 18 and 27 – stated that they’d need £46,000 in annual income to enjoy a comfortable retirement, compared to Baby Boomers who thought that £24,000 a year would be enough. It could be that by the time Gen Z get to retirement, more of them are carrying debts and mortgages, and more of them will still rent, so their income needs are higher. But for most of those retiring in the near future, the amount of money they need may be lower.
How to tell if you’re on track
“Your retirement and the income you need to fund it are as individual as you are, so the only way to really tell if you’re on track is to do your own calculations. It pays to start with a pension calculator. Input everything you have in your pensions so far, what you’re contributing, and when you want to retire. That will show you the kind of pot you can amass, which will give you an idea of the income you can take.
“Then you need to consider the income you’ll personally need in retirement. This can only ever be an estimate, but you can calculate it from the monthly essentials, the nice-to-haves you wouldn’t want to live without, the regular expenses on things like household goods and clothes, and the annual costs. It pays to err on the side of generosity, because it’s better to have slightly too much than too little.
“From here you will see whether you have a shortfall, and what you can do to close the gap. This might mean extra contributions to a workplace pension or SIPP, changing your investment strategy, or revisit your plans for how and when you want to stop work.”
