The usual way to think about retirement is forwards: save what you can, project it out, and hope the number at the end is big enough. Backwards planning starts at the other end — the life you want to fund — and works down to a monthly contribution. It tends to produce a smaller, sharper target.
Step one: estimate your annual spending in retirement, in today’s money. Not a percentage of your salary — your actual expected spending. Some costs fall away (the mortgage may be paid off, commuting and pension contributions stop), some rise (travel, heating a home you occupy all day, eventually care). For most people the honest starting point is their current spending, adjusted line by line.
Step two: subtract guaranteed income. A full state pension is worth roughly £12,000 a year in the UK; add any defined-benefit pensions or annuities. If you expect to spend £30,000 and £12,000 arrives regardless of markets, your portfolio only has to produce £18,000 a year. That distinction is enormous.
Step three: size the portfolio for the gap. Using a 4% withdrawal rate, £18,000 a year needs about £450,000 — not the £750,000 that £30,000 of spending would suggest. If you plan to retire before the guaranteed income starts, add bridge money for those years: retiring seven years before your pension begins means covering seven years of full spending, roughly £200,000 more (approximately, since the rest keeps growing while you draw).
Step four: turn the target into a monthly number. With the target, your current portfolio, a time horizon, and an expected return, the required contribution falls straight out of the compound-interest maths — and because you did everything in today’s money, use a real return (7% nominal growth with 2–3% inflation is roughly 4–5% real).
Two refinements worth making once the skeleton is in place. Withdrawals are usually taxed, so gross up the gap by your expected retirement tax rate. And treat the whole plan as a living estimate: rerun it once a year, because a plan that drifts for a decade is a plan you no longer have.
The backwards approach has a psychological benefit too. “Save as much as possible forever” is exhausting and unfalsifiable. “£450,000 by 60, which needs £800 a month from here” is a plan — you can be ahead of it, behind it, or done with it, and each of those tells you what to do next.