How much should I have in my pension at 60 UK?

A benchmark is 7x your final working salary in pension savings by 60. If you earned £50,000, aim for approximately £350,000 in combined pension pots. At 60, you're 7 years from State Pension (67), so focus shifts to sustainable withdrawal and tax-efficient income.

What age do I get State Pension UK?

State Pension age is currently 67 for most 60-year-olds. You can check your specific State Pension age at gov.uk/state-pension-age. Your State Pension is not paid automatically — you must claim it when you reach your State Pension age.

Am I entitled to free prescriptions at 60 UK?

Free NHS prescriptions start at age 60 in England. Scotland, Wales, and Northern Ireland already have free prescriptions for all ages. You'll need an NHS medical exemption certificate once you turn 60 to access free prescriptions.

Should I buy an annuity at 60 UK?

It depends on your circumstances. Annuities provide guaranteed lifetime income, which becomes more valuable as you age. At 60, rates may not be optimal — some wait until 70-75 when rates improve. Many use drawdown early in retirement and consider annuity later for guaranteed base income.

Money at 60: Financial Guide for Your Sixties UK

If you want the full age-based planning framework and adjacent decade routes, use the Money by Age Hub as your central navigation page.

At 60, retirement is either here or imminent. Whether you’re still working, recently retired, or planning your exit, this is when retirement planning becomes retirement reality. This guide covers everything you need to know about money at 60 in the UK.

Where You Should Be Financially at 60

Key Benchmarks

Category	Target	Notes
Pension savings	7x final salary	£350,000 if earned £50,000
Net worth	7x salary	Including property
Emergency fund	12-24 months expenses	More conservative buffer
Mortgage	Clear or nearly clear	Ideally £0 by 60
Debt	£0	No debt at all

At 60, you should have clarity on:

Your sustainable retirement income
How long your money needs to last
Your State Pension entitlement
Tax-efficient withdrawal strategy

The 7-Year Countdown to State Pension

State Pension Basics

Factor	Details
Age	67 (check your specific age at gov.uk)
Full amount	~£11,500/year (2024/25, triple-locked)
Qualification	35 years NI contributions
Minimum years	10 years for any State Pension

Check your forecast: gov.uk/check-state-pension

Filling National Insurance Gaps

If you have gaps in your NI record:

Action	Cost	Benefit
Voluntary Class 3 contributions	~£907/year (2024/25)	Increases State Pension
Each year added	Variable	~£329/year pension
Payback period	~3 years	Often highly worthwhile

Deadline: You can usually fill gaps from the past 6 years. Current extension allows filling gaps back to 2006 until April 2025.

Retirement Income at 60

What Income Do You Need?

Lifestyle	Annual Income	Monthly
Minimum	£14,400	£1,200
Moderate	£31,300	£2,608
Comfortable	£43,100	£3,592
Affluent	£60,000+	£5,000+

PLSA Retirement Living Standards 2024, single person.

Building Your Retirement Income

Source	Amount	When Available
Private pension drawdown	Variable	Now (from 55)
State Pension	~£11,500/year	Age 67
ISAs	Tax-free	Anytime
Workplace DB pension	If applicable	Scheme rules
Other savings/investments	Variable	Anytime

Example: Retirement Income at 60 vs 67

£400,000 pension pot at 60:

Phase	Strategy	Annual Income
60-66	Drawdown 4.5%	£18,000
67+	Drawdown 3% + State Pension	£12,000 + £11,500 = £23,500

Note: Drawing more before State Pension means less later. Plan the transition.

See our pension drawdown guide.

Tax-Efficient Retirement Income

Personal Allowance Strategy

Take advantage of the tax-free personal allowance:

Income Source	Tax Treatment
First £12,570	Tax-free (Personal Allowance)
£12,571-£50,270	20% (Basic rate)
£50,271-£125,140	40% (Higher rate)

Strategy: If not working, draw pension income up to personal allowance tax-free, then supplement from ISA (tax-free) if needed.

ISA First Strategy

Phase	Strategy	Benefit
60-66	Draw from ISA	Tax-free, preserve pension growth
67+	State Pension + pension drawdown	ISA depleted or preserved

Why this works: ISA withdrawals don’t affect your tax situation. Using ISA first allows pension to continue growing tax-sheltered.

Beware the 60% Tax Trap

If income exceeds £100,000:

Income Level	Effective Rate
£100,000-125,140	Up to 60%
Why	Personal allowance withdrawn £1 per £2

Solution: Keep income below £100,000 if possible, or accept the higher rate.

See our 60% tax trap guide.

Key Decisions at 60

1. Still Working or Retired?

If Still Working	Considerations
Continue full-time	More contributions, delay drawdown
Reduce hours	Draw partial pension, work-life balance
Stop work	Begin full retirement phase

Working beyond 60 benefits:

Additional contributions
Growth on existing pot
Fewer years of drawdown
Each year adds ~10% to retirement income

2. Drawdown or Annuity (or Both)?

At Age 60	Consideration
Drawdown preferred	Flexibility, potential for growth, death benefits
Annuity rates	Not typically optimal at 60
Combined approach	Often best — annuity for base income later

Common strategy:

Age 60-70: Drawdown for flexibility
Age 70-75: Consider partial annuity for guaranteed income
Age 75+: Annuity rates better, security more valued

3. Taking More Tax-Free Cash?

If you haven’t taken your full 25% tax-free:

Option	When Sensible
Take remainder now	Specific need, better use outside pension
Leave invested	Don’t need it, prefer tax-sheltered growth
Take gradually	Phased approach, maintain flexibility

4. Downsizing Property?

Downsize If	Consider Carefully If
House too large	Strong attachment
Need to release equity	Market poor
Want to reduce maintenance	Other options exist
Moving closer to family	Disruption to social network

Equity release alternatives:

Downsize (most cash released)
Lifetime mortgage (stay in home, debt grows)
Home reversion (sell share, stay in home)

Benefits and Entitlements at 60

Benefit	Age	Details
Free prescriptions (England)	60	Apply for exemption certificate
Free eye tests	60	NHS entitled
Winter Fuel Payment	State Pension age	£100-300
Free bus pass	60 (varies by area)	Local authority specific
State Pension	67	Check your specific age
Free TV licence (over 75)	75	If receiving Pension Credit

Often Overlooked

Entitlement	Check If
Pension Credit	Low income in retirement
Council Tax reduction	Single occupancy or low income
Attendance Allowance	Health/disability needs (from 65)
Carer’s Allowance	If caring for someone

See our benefits in retirement guide.

Health Costs and Planning

NHS at 60+

Service	Cost
Prescriptions	Free from 60 (England)
Eye tests	Free
Dental	NHS charges apply (unless exempt)
GP/Hospital	Free (NHS)

Private Healthcare Considerations

Factor	Consideration
NHS wait times	May be long for non-urgent
Private insurance	£100-250/month at 60
Self-fund option	Build healthcare reserve
Existing conditions	May not be covered

Budget suggestion: £2,000-5,000 annual reserve for health costs not covered by NHS.

Long-Term Care Planning

Factor	Reality
Likelihood	~1 in 4 will need care
Care home costs	£35,000-60,000/year
Home care costs	£25,000-45,000/year
Funding threshold	Over £23,250 assets (England)

Options:

Self-fund from savings
Immediate needs annuity (if care needed)
Long-term care insurance (limited availability)
Property as asset (may need to sell to fund care)

Sample Budgets at 60

Retired at 60 with £450,000 Pension + Mortgage-Free Home

Drawing £20,000/year pre-State Pension:

Category	Monthly	Annual
Income (drawdown)	£1,667	£20,000
Home maintenance	£150	£1,800
Bills & utilities	£200	£2,400
Council Tax	£180	£2,160
Groceries	£320	£3,840
Transport	£180	£2,160
Healthcare/dental	£100	£1,200
Insurance	£100	£1,200
Leisure/hobbies	£250	£3,000
Holidays	£200	£2,400
Remaining	~£150	~£1,800

At 67 (State Pension + reduced drawdown):

Income Source	Monthly	Annual
State Pension	£960	~£11,500
Drawdown (reduced)	£750	£9,000
Total	£1,710	£20,500

Couple at 60, £700,000 Combined Pensions

Drawing £35,000/year combined:

Category	Monthly	Annual
Income	£2,917	£35,000
Home maintenance	£200	£2,400
Bills & utilities	£280	£3,360
Council Tax	£200	£2,400
Groceries	£500	£6,000
Transport	£300	£3,600
Healthcare	£150	£1,800
Insurance	£150	£1,800
Leisure	£400	£4,800
Holidays	£400	£4,800
Remaining	~£337	~£4,000

Investment Strategy at 60

Asset Allocation in Retirement

Approach	Allocation
Cautious	40-50% equities, 50-60% bonds/cash
Balanced	50-60% equities, 40-50% bonds/cash
Growth-oriented	60-70% equities, 30-40% bonds/cash

Key consideration: You may live 25-30+ years in retirement. Some equity exposure is usually needed for growth.

The Bucket Strategy

Bucket	Purpose	Holdings	How Much
1	Short-term (0-3 years)	Cash, money market	3 years expenses
2	Medium-term (4-10 years)	Bonds, conservative	7 years expenses
3	Long-term (10+ years)	Equities, growth	Remainder

How it works: Draw from Bucket 1, replenish from Bucket 2, let Bucket 3 grow.

Estate Planning at 60

Critical Documents

Document	Status
Will	Current and comprehensive?
Pension nominations	Match current wishes?
LPAs (both types)	Registered with OPG?
Letter of wishes	Details for executors?

Inheritance Tax Planning

Threshold	Amount
Nil-rate band	£325,000
Residence nil-rate	£175,000 (to direct descendants)
Combined individual	Up to £500,000
Combined couple	Up to £1,000,000

Planning options:

Regular gifts from income (exempt)
£3,000 annual gift exemption
Potentially exempt transfers (7-year rule)
Trusts for control and efficiency
Life insurance written in trust (covers IHT bill)

See our inheritance tax guide.

Making Your Money Last

Sustainable Withdrawal Rates

Withdrawal Rate	Likely Outcome (30 years)
3%	Very safe, money likely grows
4%	Traditional “safe” rate
5%	Higher income, some risk of depletion
6%+	Risk of running out

Longevity Risk

At Age 60	Life Expectancy
Men	Average 83, many reach 90+
Women	Average 86, many reach 90+
Couple	Good chance one reaches 95+

Plan for longevity: Consider that your money may need to last 30-35 years.

Sequence of Returns Risk

Risk	Impact
Poor returns early in retirement	Can devastate portfolio
Withdrawing in down market	Locks in losses

Protection: Keep 2-3 years expenses in cash to avoid selling in down markets.

Common Situations at 60

If You’re Behind on Retirement Savings

Action	Impact
Work longer	Each year significantly helps
Reduce expected lifestyle	Lower income needs
Downsize now	Release capital
Delay State Pension	~5.8% increase per year delayed

If You Have More Than Enough

Consider	Options
Retire earlier	If not already
Spend more	You’ve earned it
Gift to children	Help them sooner
Charitable giving	Tax-efficient ways
Legacy planning	Structured giving

If Health Becomes an Issue

Consideration	Action
Attendance Allowance	Apply if daily care needs (from 65)
Income needs may change	Medical costs up, activity costs down
Life expectancy impact	May affect withdrawal strategy
Annuity rates	Poor health may improve rates (enhanced annuity)

Your Financial Checklist at 60

Essential Now

State Pension forecast checked
NI record reviewed and gaps filled
Sustainable withdrawal rate determined
Tax-efficient drawdown strategy in place
Mortgage cleared
Will and LPAs current

By 65

State Pension claim planned
Retirement budget stress-tested
Healthcare provisions in place
Estate planning complete
Long-term care considered
Attendance Allowance checked (if applicable)

By 67 (State Pension Age)

State Pension claimed
Income adjusted for new reality
Full retirement budget operating
Annual review system established
Longevity risk addressed

Summary

At 60, you’re in the implementation phase of retirement. Whether just retired or preparing to stop work, the decisions you make about income, tax-efficiency, and sustainability will shape the next 25-30 years.

Key priorities:

State Pension optimisation — Check forecast, fill gaps before deadlines
Tax-efficient income — Use personal allowance, coordinate ISA and pension
Sustainable withdrawal — Don’t draw too much too early
Healthcare planning — Budget for increasing costs
Longevity planning — Your money may need to last 30+ years

The single most impactful thing at 60: Ensure your State Pension record is maximised and plan the transition to combined State + private pension income at 67.

For more guidance:

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