Can you retire at 55 with £900k?

The £41,700 a year this supports clears the moderate benchmark by about £9,000. It’s a workable moderate retirement, but the margin is thin enough that a poor run of early returns would eat into it — worth stress-testing before you commit.

For the 12 years between finishing work at 55 and the State Pension arriving at 67, every penny of income comes from your own pots. That first year the tax bill is modest — around £7,500 on £67,000 of gross withdrawals, an effective rate of about 11% — because a quarter of each SIPP withdrawal is tax-free and the taxable slice mostly sits in the basic-rate band.

From 67 the full new State Pension — about £11,502 a year in today’s money, and triple-locked so it broadly keeps pace with prices — covers roughly 28% of your £41,700 target on its own. From that point your pots only have to find the rest, so they stretch a good deal further than they do in the bridge years before it starts.

The plan is designed to run the pots down to roughly zero by age 95: both the £630,000 SIPP and the £270,000 ISA are put to work rather than left as a large estate. If leaving something behind matters to you, you’d take a little less each year.

55 is exactly where the pension access rules bite hardest. The normal minimum pension age is 55 today — so you can reach the SIPP right now — but it rises to 57 on 6 April 2028. Retire at 55 before that date and nothing changes; reach 55 after it and you face two years in which the £630,000 SIPP is untouchable and the £270,000 ISA is all you have. Of every age on this grid, this is the one where the date on your birth certificate does the most to the plan. Our projection ignores the restriction and draws from the SIPP from 55, so check which side of April 2028 you fall before treating these early years as settled.

Putting the margin in pot terms rather than income: at 55 you’d need about £660,000 to land exactly on the £32,700 moderate benchmark. You’re modelling £900,000, so roughly £240,000 of this pot is doing work beyond the moderate standard — that is your cushion against a bad first decade of returns, or the part you could spend earlier if you’d rather front-load your retirement.

Over the full 41-year plan the model projects roughly £225,000 of income tax in total — an average of about £5,500 a year, though it is not spread evenly. The bill is lightest in the bridge years, when the 25% tax-free element of each SIPP withdrawal does the most work, and steps up once the State Pension starts at 67 and occupies most of your personal allowance on its own. From that point every pound drawn from the SIPP is taxable from the first penny.

Retiring a couple of years earlier would trim the sustainable figure, since the pot has to cover more years before the State Pension arrives; later, and it climbs.