Can a couple retire at 57 with £1.25m?
On track On our model, two 57-year-olds retiring today with £1.25m between them could draw a sustainable household income of about £69,400 a year (£5,780 a month) in today’s money, holding that spending power to age 95. That is above the £45,400 the PLSA links to a ‘moderate’ retirement for a couple, by roughly £24,000 a year. You would bridge 10 years on your own savings before the State Pensions start at 67.
Why two people beat one with the same money
£1.25m held by one person supports about £55,500 a year. The same £1.25m split evenly between two supports about £69,400 — roughly £13,800 a year more, or 25%, on identical savings and identical assumptions. Nothing about the investments changed; only whose name the money is in.
The reason is less clever than it is usually made to sound, and it is worth stating plainly because most write-ups get it wrong. Almost all of that gap is the second State Pension. Two full new State Pensions pay about £23,004 a year in today’s money from 67, against £11,502 for one person — an extra £11,502 a year of guaranteed, triple-locked income that owes nothing to tax planning. Set that beside the £13,800 total advantage and about £2,300 a year is left over from everything else.
At this pot size that remainder is the tax effect, and it is real: £1.25m in one name pushes a single holder toward higher-rate territory, while two people drawing half each stay largely inside their own basic-rate bands. Across the plan the couple’s effective rate is about 6.9% against 11.8% for the single holder. The bigger the pot, the more this matters.
Two things follow. The couple’s total tax bill over the plan is larger in cash terms — about £382,000 against £544,000 — simply because you are drawing much more income, which is not a bad problem to have. And more usefully: this entire advantage assumes both of you have a full National Insurance record. If one of you has significant gaps, most of it disappears, because most of it was never about the pension pots at all. Two State Pension forecasts on GOV.UK are worth more here than any amount of drawdown modelling.
Pot balance still matters, just less than the headline suggests: an even split uses both personal allowances in full, and the more lopsided the pots, the closer you drift toward the single-person figure of £55,500. Moving contributions toward the lower-balance partner before you stop remains worth doing — it is simply not where the bulk of the couple advantage comes from.
What the projection shows
For the 10 years between finishing at 57 and the State Pensions arriving at 67, everything comes from your own pots — £625,000 and £625,000 respectively, each split 70% SIPP and 30% ISA. Two ISAs matter more than they look here: they let each of you take tax-free income alongside a modest taxable SIPP withdrawal, which is what keeps the early-year tax bill down.
From 67, two full new State Pensions add about £23,004 a year in today’s money between you, triple-locked. That is roughly 33% of the household income covered before your pots contribute anything — the single biggest reason a couple’s pot stretches further than the headline number suggests.
Questions people ask
Can a couple retire at 57 with £1.25m?
Yes, on our model. Split evenly, £1.25m supports a household income of about £69,400 a year (£5,780 a month) in today's money, sustained to age 95. The PLSA puts a moderate retirement for a couple at £45,400, so you would be roughly £24,000 a year clear of it.
Why does a couple do better than one person with the same pot?
On identical money — £1.25m either way — two people draw about £69,400 a year between them against roughly £55,500 for one person holding the lot: about £13,800 a year more. Most of that is not tax planning, it is the second State Pension, worth £11,502 a year in today's money from 67. The tax split adds roughly £2,300 a year on top at this pot size, because one person holding £1.25m starts meeting higher-rate tax. The practical implication is that both of you having a full National Insurance record matters more than how the pots are split.
How much State Pension would we get between us?
Two full new State Pensions is about £23,004 a year in today's money from age 67 — roughly 33% of the household target on its own. Both figures assume a full 35-year National Insurance record each; check both forecasts on GOV.UK, because a partial record on either side changes this materially.
What if one of us has a much bigger pension?
Then the advantage above shrinks. These figures assume an even £625,000 / £625,000 split, which is the best case for tax — it uses both personal allowances fully. The more lopsided the pots, the closer the outcome moves toward the single-person figure of £55,500. Equalising pots between partners before retirement is often the single cheapest thing a couple can do, and it is exactly the kind of thing worth modelling with your real numbers rather than an even split.
Run your own numbers
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