Is a £250,000 pension pot enough to retire on?

What would your retirement income be with a £250K pension pot? Knowing how much you can get makes it easier to plan for your golden years.

(Image credit: Getty Images/Maskot)

By Marc Shoffman

The high cost of living means it remains crucial to have a large pension pot to prepare for retirement and ensure you have enough to fund your golden years.

UK inflation may no longer be in the double digits but it remains high amid rising energy bills and geopolitical tensions as well as Donald Trump’s trade tariffs.

There is also uncertainty about the future of the state pension and the triple lock, meaning it is unclear if you will have these payments to fall back on when you are ready to retire. It is therefore important to prepare yourself financially.

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It is hard to predict what your pension pot will be worth in the future after decades of saving for retirement, especially with volatility in recent years, but knowing how much income you can generate can help you plan and set a target for your golden years.

“One of the big questions when considering retirement planning is how much you are likely to need,” says James Corcoran, chartered financial planner at Lumin Wealth. “None of us have a crystal ball and there are some big unknown factors, such as how long you are going to live, whether you may need long-term care, and what type of support you may wish to provide to family members.

“However, with financial planning, what we will typically do is look at various scenarios to see whether people are on the right track for the retirement they want, and then see how we can help them achieve that. Cashflow forecasting can be a very helpful tool here.”

Can you retire on £250,000 ?

Let’s use the Snowball for an assumption, although you should never assume, as it can make an ASS out of U and ME.

We will use the 100k of seed capital, if you can add fuel to the fire you should be able to shorten the time lines.

AN ANNUITY

Lets start with the 250k and you intend to take out an annuity. Current rates for a 3% uplift around 5.5k.

OR

Canada Life figures show the 65-year-old with a £100,000 pension pot could buy an annuity linked to the retail price index (RPI) that would generate a starting annual income of £3,896. That’s up from £2,195 in the New Year following a 77% spike in rates this year.
Oct 22

Remember you have to surrender all your capital.

THE 4% RULE

Current value of the control share VWRP £129,476.

To get to 250k we will have to assume a time line.

Compounding at 7%, it could be more or a lot less, let’s say ten years.

A ‘pension’ of 10k p.a.

A SNOWBALL

The current income for this year will be 10k and in ten years it could be

a pension of 20k p.a.

Even if the figure for the Snowball was less than a 4% pension, the fact that you have a plan with a defined end and you can check your progress and pencil in next years income, it could be better than a 4% pension plan.

Ideas of the Week

Bag a 14% yield with this trust

Investors Chronicle

Investors are being paid to wait for a recovery in sentiment towards this energy efficiency trust

Published on June 12, 2025

by Val Cipriani

Investment Risk: High

Investment Style: Income

Investment Timescale: Long term

With every single renewable energy infrastructure trust trading well below its net asset value (NAV), pinpointing the best opportunities is tough. The entire sector looks cheap, but it is also facing significant headwinds, and catalysts for a quick recovery are in short supply. However, some of these trusts stand out for their juicy yields and especially disproportionate discounts – and SDCL Efficiency Income (SEIT) is an obvious example.

SDCL Efficiency Income bull points

• Outsized discount to NAV 

• Attractive yield
• Diverse portfolio of energy efficiency assets
• Potential for corporate action

More than 130 years later, this pragmatic trust still offers something new

Law Debenture boasts a unique structure with two valuable sources of outperformance.

12 June 2025

Questor is The Telegraph’s stockpicking column, helping you decode the markets and offering insights on where to invest for the past six decades.

The UK equity market has been a happy hunting ground for income-seeking investors, and it continues to offer a yield premium to other developed equity markets. However, more recent events, particularly across competing income-producing asset classes, have shifted the emphasis for equity income investors towards total returns, dividend growth and the benefits of a pragmatic approach to stock selection.

In the context of an evolving landscape of UK equity income strategies, few names stand out as consistently as Law Debenture. This venerable institution, with almost 136 years of history, combines an actively managed UK equity investment portfolio with the robust growth of its wholly-owned independent professional services (IPS) business, which is comprised of three divisions – pensions, corporate trust and corporate services. This combination creates a unique structure that supports the trust’s history of consistent outperformance.

The investment portfolio is managed by the experienced Janus Henderson duo of James Henderson and Laura Foll, and benefits from a contrarian and value-focused style. The investment approach followed by Henderson and Foll is unconstrained by the equity income mandate, can invest across the market cap spectrum and targets companies trading at reasonable valuations with conservative balance sheets and experienced management teams.

One of the standout features of Law Debenture is the IPS business, which accounts for around 19pc of its net asset value (Nav) and has funded approximately 30pc of its dividends over the past decade. IPS has delivered mid-to-high single-digit growth and around two thirds of IPS revenues are recurring.

Law Debenture has consistently delivered outperformance in the UK equity income sector. Over the five years to the end of April 2025, it reported a Nav total return of 108pc and a share price total return of 120pc, far beating the FTSE All Share Index’s 68pc. Over the past decade, the trust has outperformed the FTSE by 49 percentage points. This outperformance reflects its ability to navigate market volatility and deliver value to its shareholders through active portfolio management, supported by the steady growth and income generation of IPS.

In Law Debenture’s accounts, the IPS business has a valuation multiple of 10.5x by enterprise value over earnings before interest, tax, depreciation and amortisation (EV/Ebitda), which remained consistent year on year. The total valuation of the IPS business has increased by £116m (148pc) since the first valuation at end-December 2015. This valuation underscores the growth potential and stability of the trust’s business model.

The investment portfolio’s largest sector exposures as of April 2025 were financials (30pc) and industrials (23pc). Top holdings included names such as HSBC, Barclays, Shell, Rolls-Royce and Flutter Entertainment, but the portfolio is multi-cap and it is currently benefitting from mid and small-cap exposure in UK companies.

At the end of April 2025, Law Debenture’s net gearing was around 13.6pc. In the context of global uncertainty – whether policy-driven or macroeconomic – leading to heightened equity market volatility, the investment portfolio has benefited from access to a diverse list of companies and its valuation discipline. The investment portfolio’s average valuation (historic price-to-earnings ratio) of 11.6x compares favourably with the UK market of around 12.6x and the US market’s roughly 24x earnings.

Law Debenture has delivered an 8pc annual dividend growth over the past 10 years and has increased or maintained its dividend for 46 consecutive years. The board proposed a total dividend of 33.5p for FY24, up 4.7pc from 32p in 2023, resulting in a yield of approximately 3.5pc on the current share price. The diversified income stream provided by IPS to the trust provides a cushion against market volatility and supports its dividend distributions. This blended approach makes the vehicle an attractive option for income-focused investors.

The trust currently trades on a small premium to Nav, a positive reflection of the demand for the strategy and the returns generated for shareholders. Over the past five years, its share price has traded at an average premium of 0.4pc to Nav, supporting steady growth of the strategy over time. Law Debenture’s ongoing charges figure of 0.51pc is one of the lowest fees in its sector and one of the lowest fees across the entire investment trust universe.

In our view, Law Debenture’s unique structure supports its consistent outperformance. The ability to invest in an unconstrained manner and hold low or zero dividend yield shares, backed by the IPS business’s growth and income contribution, has made the company one of the best-performing trusts in the UK equity income sector.

With its strong record, diversified portfolio, robust IPS business and reliable dividend policy, Law Debenture presents a compelling case for investors seeking stability, income and growth potential. In addition, for those looking to diversify their investment portfolio and access the valuation opportunity in the UK equity market, the trust offers a compelling combination of actively managed stock picking, attractive yield and strong dividend growth.

Questor says: buy
Ticker: LWDB
Share price: £9.74

If Mr. Market ever offers you a yield of around 5% would be of interest to pair trade it with a higher yielder.

It’s general market consensus that a high dividend yield is something to be wary of but is the market always right ?

Re: Dividend Announcement

The Directors of TwentyFour Select Monthly Income Fund Limited (“SMIF“), the listed, closed-ended investment company that invests in a diversified portfolio of credit securities, have declared that a dividend of 0.5 pence per share will be paid, in line with the Prospectus, representing the regular monthly targeted dividend for the financial period ended 31 May 2025 as follows:
Ex-Dividend Date              19 June 2025
Record Date                       20 June 2025
Payment Date                    4 July 2025
Dividend per Share          0.50 pence (Sterling)

AEW

AEW fell during covid, one reason people were working from home and wouldn’t need a workplace.

You will note the yields had been rising, due to the higher interest rates, as the price falls the yield should rise, it accelerated during covid.

Now you would have been hesitant to press the buy button as you didn’t know if the price would continue to fall , it’s always easy with hindsight, if only you could bottle it. But if you liked the yield, you might have bought.

Currently you could have taken out your stake and still receive a yield of around eleven per cent on your remaining shares, which sits in your account at zero, zilch, nothing.

If you re-invested at say a yield of 9%, your running yield would be 20%

Remember all views of everyone in the market, including insiders, will appear in the chart first.

The holy grail of investing is to have an income producing share that pays you a regular income whilst it sits in your account at zero, zilch, nothing.

If you wait for a market crash, you will be rewarded, if you have cash to invest. Whilst you wait let’s look at SEIT.

The current yield is 13% so your cash will be returned in around 8 years, you will also have income from the dividends re-invested but let us ignore that for now.

SEIT trades at a discount to NAV but that is no guarantee that the price will rise, especially if the quoted NAV falls in the future but we will also ignore that for now.

The first consideration is the dividend ‘secure’. The first check is to look is at its dividend history.

The second check is to see what the company says about it dividend.

Jonathan Maxwell, CEO of the Investment Manager, SDCL, said:

“SEEIT’s active management of the assets in its portfolio has delivered substantial income to the Company, in line with previous years. This stable performance ensures that we can cover the target dividend of 6.32p which represents a double-digit yield for investors at the current share price.

“We are confident that the portfolio is well positioned to maintain its performance and secure opportunities that are accretive to NAV. As the market challenges faced by SEEIT and its peers continue, our priority remains reducing the current discount to NAV. We are highly focused on preserving value and upside for shareholders, while at the same time considering ways to cut costs and find capital efficiencies at project and company level.”

Operational Update

During the Period, SEEIT’s operational performance has been generally in line with expectations, delivering the expected distributions to the Company:

Shareholder dividend

During the Period, the portfolio’s stable operational performance has supported distributions to SEEIT that have covered the target dividend of 6.32p per share, with a cash cover in line with the previous year.

If you invest, you must trust what the management say, until your trust is misplaced.

Check three, are there any positive broker comments.

Your duty if you buy, is to check any news from the company about its next and future dividends and wait. The dividend could be cut and still be a valid reason to hold the share.

This dividend stock yields 14.15% and is potentially 52% undervalued

Jon Smith explains why the highest-yielding dividend stock in the FTSE 250 could offer him a good option to include in his portfolio.

Posted by Jon Smith

Published 10 June

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services.

When it comes to dividend stocks, a double-digit percentage yield is impressive. Shares in this bucket draw a lot of attention, but should be treated carefully. Usually, stocks with a high dividend yield carry an elevated level of risk. So when I saw a company with a very generous yield but that could also be undervalued, I naturally needed to look closer.

Undervalued relative to assets

The stock I’m talking about is the SDCL Energy Efficiency Income Trust (LSE:SEIT). Its current dividend yield is 14.15%, making it the highest-yielding option in the FTSE 250.

A big question relates to how I reached the presumption of it being 52% undervalued. This metric was configured by comparing the net asset value (NAV) to the current share price. With trusts like SDCL,, company’s value is mostly based on the sum of the assets being held. In this case, the assets are energy efficiency and decentralised energy projects across the UK, Europe, North America, and Asia.

Based on the latest reported NAV value, the stock is at a 52% discount. Of course, in a few months, we should get an updated NAV figure, which could see the discount either increase or decrease. But with the stock down 35% in the past year and no major company updates suggesting the portfolio has been significantly hit in value, I don’t see the discount reducing.

Caution still needed

Without a large hit to the NAV, the discount tells me that the share price move is mostly due to negative sentiment. This could put off some investors. Some would flag up worries about renewable and energy-efficiency trusts, saying that the hype around them is dying down. It’s true that some companies are pivoting back to traditional fuels, with volatile commodity prices also to blame.

Another point to note is that the high dividend yield is primarily being driven by the falling share price. But the dividend per share has indeed been increasing each calendar year for several years now. Given that the dividend cover is above one, I’m not concerned about it being paid out. But the falling share price has pushed the yield higher, which is a bit of a red flag.

The bottom line

From where I’m standing, I don’t see any big problems that should justify the negative sentiment around the trust. Yet I appreciate that I may have missed something or that the sector might be heading for a multi-year downtrend before things change. So, I’m seriously considering putting some of my money to work here, but only a small amount. That way, I can still benefit from the high yield but am not going to be seriously impacted if the stock keeps dropping.