Even if you receive your full state pension, it won’t be enough for a comfortable retirement. Far from it, I’m sorry to say.

In the current financial year, the full novel state pension is worth a fraction over £12,547. Unfortunately, according to the latest updated study on retirement living standards (below), this is £1,353 low of the £13,900 a year required to provide a basic ‘minimum’ lifestyle.

As the table below shows, it is not gigantic enough to finance a moderate, let alone comfortable, lifestyle.

Source: Pensions UK survey on retirees’ living standards.

A popular way to make up for the shortfall is to build a balanced portfolio of UK shares with… FTSE100 AND FTSE250.

They reward you in two ways. First, build your capital as stock prices rise. Second, by paying regular dividends to investors. Best of all, both growth and income are completely tax-free within a Stocks and shares ISA.

Please note that tax treatment depends on each client’s individual situation and may change in the future. The content of this article is for informational purposes only. It is not intended to be and does not constitute any form of tax advice. Readers are responsible for conducting their own due diligence and obtaining professional advice before making any investment decisions.

How much do you need in your ISA?

Now let’s assume that the investor plans to earn a passive income of £995 per month. This works out to £11,940 per year. This is still not enough for a “moderate” lifestyle, even when added to the state pension. But it will push you closer. If you’re lucky, you’ll have other sources of retirement savings, such as a company or private pension. The more the merrier, honestly.

How much you need in the pot to generate that £995 depends on the underlying profit on the shares you hold.

• At a rate of return of 4% you would need to invest £298,500.
• At 5% the required amount drops to £238,800.
• At 6% this figure drops to £199,000.

These look daunting, but can be achieved over longer periods, such as 30 years. Let’s assume someone invests £200 a month and their average annual growth rate is 9.64%. This is the average annual return of a Stocks and Shares ISA over the last decade, according to advisory group Unbiased. At the end of this term they would have £404,396. This is much more than my goal.

Here’s why I bought Standard Life stock

One of the dividend stocks I’m currently evaluating is a FTSE 100 insurer Standard life (LSE: SDLF), which sells protection and pension products. Today it has a taste dividend rate amounting to 6.5%, which is one of the highest in the index of the largest companies.

Standard Life not only provides investors with high income. He intends to escalate it every year. The Management Board has increased shareholder payouts for the last 10 years in a row, at an average annual rate of 3.18%. Moreover, investors have seen quite decent growth. Over the last year, the Standard Life share price has increased by an impressive 30%.

Dividends are not guaranteed and Standard Life must generate enough cash to fund them. And after a robust run, its stock may remain idle for a while. They may even fall off. It’s investing. However, I think that in the longer term, a balanced share portfolio such as this is a tempting option to top up your state pension.

Is it worth investing £5,000 in Standard Life now?

If investing expert Mark Rogers and his team have stock advice, it can pay to listen. After all, Twelfth Magpie’s flagship Share Advisor newsletter, which it has run for almost a decade, provides thousands of paying members with the best share recommendations from across the UK and US markets.

Mark believes there are 6 standout stocks that investors should consider buying right now. Want to see if Standard Life is on the list?

Harvey Jones owns shares in Standard Life.