Only 23% of workers are on track for a moderate retirement, and for couples the picture is even more uneven — one partner often carries a much smaller pension pot, sometimes none at all. The full new State Pension pays £12,548 a year per person in 2026/27, but a couple aiming for a moderate standard needs £45,400 a year between them, excluding housing. That leaves a gap most households haven’t planned for, and it lands differently on each partner.
Disclosure: Some links on this page are affiliate links. If you make a purchase through them, Britwealth may earn a commission at no extra cost to you. We only include products and services that are relevant to the topic.
This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
Two people in the same household can end up with very different retirement incomes. Career breaks, part-time work, and lower earnings mean one partner’s pension pot often falls well behind the other’s. The Retirement Living Standards from the Pensions and Lifetime Savings Association (PLSA) show what each level actually costs, but most couples haven’t mapped their two separate pots against those numbers together. That’s where the trouble starts. Here’s what you actually need to know.
The first term worth getting straight is income splitting. It simply means drawing retirement income from two separate pension pots in a way that uses both personal allowances and keeps each partner in a lower tax band. What I tend to notice is that most couples think about their pensions separately — one person’s pot, one person’s plan. But the tax saving from coordinating withdrawals can be substantial, especially when one pot is much larger than the other. For a closer look at how timing affects this, the article on phased retirement covers the mechanics of staggering your exit from work.
What a comfortable retirement actually costs in 2026/27
The PLSA’s Retirement Living Standards are updated each year to reflect rising costs. For 2026/27, a couple needs £62,700 a year after housing costs for a comfortable retirement — that’s two weeks in Europe each year, regular dining out, and a car with few limits. A moderate standard, which includes one foreign holiday and a short UK break, costs £45,400 for a couple. The full new State Pension covers about £25,100 a year for two people receiving it, which is roughly 55% of the moderate target. The rest has to come from private pensions, savings, or other income.
Here’s what that gap looks like in practice for a couple where one partner has a full NI record and the other has gaps from career breaks.
→ Scroll right to see all columns
| Retirement level | Single (per year) | Couple (per year) | State Pension covers (couple) | Private income needed (couple) |
|---|---|---|---|---|
| Minimum | £13,900 | £22,500 | ~£25,100 | £0 (fully covered) |
| Moderate | £32,700 | £45,400 | ~£25,100 | ~£20,300 |
| Comfortable | £45,400 | £62,700 | ~£25,100 | ~£37,600 |
The State Pension alone gets a couple to the minimum standard, but the jump to moderate requires roughly £20,000 a year from private sources. For a couple with unequal pots, that £20,000 has to come mostly from the partner with the larger pension, which pushes them into higher tax bands faster. Coordinating withdrawals — drawing from both pots to keep each person’s income within the basic-rate band — can save a couple thousands per year in income tax. The full new State Pension is £241.30 a week in 2026/27, but not everyone qualifies for the full amount. A partner with fewer than 35 qualifying NI years gets less, which widens the gap further.
Research from Loughborough University confirms that 82% of workers will reach at least the minimum standard, but only 23% are on track for moderate. For couples, the risk is that one partner’s shortfall pulls down the household’s overall standard unless they plan together. The Saltus Wealth Index notes that retirement planning for couples should focus on lifestyle alignment, not just a financial target — but most households still treat their pensions as separate projects.
Where couples most often get this wrong
Assuming one big pension is enough
Relying on one partner’s pension pot creates a single point of failure. If the relationship ends, the partner with the smaller pot faces a severe retirement shortfall. Even in an intact relationship, drawing all income from one pot pushes that person into higher tax bands faster. The other partner’s personal allowance goes unused. A better approach is to build both pots, even if one is much smaller. Spousal contributions allow a working partner to pay up to £2,880 net into a non-earning spouse’s pension each year, which is topped up to £3,600 with tax relief. Over ten years, that’s £36,000 in the smaller pot, plus investment growth.
Ignoring the State Pension gap from career breaks
Each partner needs 35 qualifying NI years for the full State Pension. Career breaks for childcare or caring reduce those years. A partner with only 20 qualifying years gets about £7,170 a year instead of £12,548 — a gap of £5,378 per year, every year of retirement. Voluntary Class 3 NI contributions can fill missing years, but the window to top up is limited. Checking both partners’ NI records on GOV.UK is a straightforward first step. The cost of filling a gap varies, but the annual benefit from an extra qualifying year is roughly £360, which adds up over a 20-year retirement to £7,200.
Not updating nomination forms after marriage or separation
Unmarried couples do not automatically inherit each other’s pension benefits. Even married couples should check that their expression of wish forms name the right person. After divorce, a previous spouse may still be the named beneficiary unless the form is updated. Each pension provider has its own nomination form, and it needs to be completed separately for each pot. This is a paperwork task with a very concrete consequence: the wrong person could receive the death benefit.
Forgetting that spending changes differently for couples
The Oxford Economics thematic report for Hargreaves Lansdown shows that couple households tend to reduce spending more sharply as they age than single households do, because essential costs like housing and utilities are shared. That means couples have more discretionary spending to cut in later retirement, which can be a buffer — but it also means planning assumptions based on single-person spending patterns will be off. Couples should model two different spending trajectories, not just one household average.
The strategies that close the gap between two pensions
Spousal contributions and the non-earner’s pension
Anyone can contribute to another person’s pension in the UK. A working partner can pay up to £2,880 net per year into a non-earning spouse’s pension, which receives basic-rate tax relief automatically and becomes £3,600. This is particularly valuable for stay-at-home parents or partners who work part-time. The contribution counts against the contributor’s annual allowance, not the recipient’s, so a higher-rate taxpayer gets 40% relief on the way in while building the other partner’s pot. Over a decade, this can add over £40,000 to the smaller pension, including growth.
Income splitting in retirement
Once both partners are drawing from their pensions, the goal is to keep each person’s income within the basic-rate band (up to £50,270 in 2026/27). If one partner has a much larger pot, withdrawing from both pots to stay under that threshold can save thousands in 40% tax. Each partner also has their own personal allowance (£12,570), so the first £25,140 of combined income is tax-free. Coordinating withdrawals to use both allowances is the single most effective tax strategy for retired couples.
Staggered retirement dates
If one partner retires before the other, the retired partner can draw from their pension while the working partner continues to contribute and benefit from employer matching. This bridges the income gap without requiring both to stop work at the same time. The working partner can also increase their contributions during this period, using the higher earnings to build the household’s total pot. The Pension Helper guide for couples notes that this approach is common and effective for tax planning, especially when the retired partner draws income from a smaller pot first.
What changes with the rising State Pension age
The State Pension age is rising to 67 between 2026 and 2028, and then to 68 between 2044 and 2046. For couples with an age gap, the younger partner may reach State Pension age several years after the older one. That means a period where only one State Pension is coming in, and the household needs to bridge the gap from private savings. Planning for this window — often five to eight years — is essential. Drawing from the older partner’s pension first and deferring the younger partner’s State Pension can boost the eventual amount, but the trade-off is lower income in the early years.
For couples with unequal pots, a blended strategy often makes sense — use drawdown on the larger pot for flexibility and a small annuity on the smaller pot to cover essential costs. The unexpected costs of retirement can derail even the best plan, so building in a cash buffer for home repairs, health expenses, or family support is worth factoring into the withdrawal strategy.
Frequently asked questions
Can I pay into my partner’s pension if they don’t work? ▾
What happens to my pension if I divorce? ▾
Do unmarried partners automatically inherit each other’s pension? ▾
How does the marriage allowance work in retirement? ▾
What is the tapered annual allowance and how does it affect couples? ▾
Should we use a joint-life annuity or a single-life one? ▾
The cost of waiting another year
Every year a couple delays coordinating their retirement plans, the gap between their two pensions can widen. A missed NI year costs roughly £360 per year in State Pension income for life. A spousal contribution not made means £3,600 of tax-advantaged saving lost for that year. And the longer one partner’s pot stays small, the harder it becomes to use income splitting effectively in retirement. The housing decision in retirement — renting versus owning — adds another layer of cost that couples need to factor in, especially if one partner’s pension is too small to cover their share of the rent.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read Future-Proofing Your Finances: Inflation-Busting Retirement Strategies.
Sources and Further Reading
Retirement Planning for Millennials — A guide for younger couples who want to start building two pensions early, with practical steps on contributions and tax efficiency.
The Unexpected Costs of Retirement — What couples often miss when planning their joint retirement budget, from home repairs to health expenses.
PLSA (2026). Retirement Living Standards. 🔗
GOV.UK (2026). The new State Pension: What you’ll get. 🔗
Loughborough University (2026). Retirement Living Standards: Nation not saving. 🔗
Pension Helper (2026). Best Pension for Couples. 🔗
