04 Sep 2018

Ask the expert: How much should I save for retirement?

Ask the expert: How much should I save for retirement?

One of the biggest questions when considering retirement is how much should I actually put away?

There’s no exact answer and whilst most financial advisers would suggest around 15% to 20% of your salary, it very much depends on how much you can afford and what sort of targets you’ve set for the level of income you want when you eventually do retire.

It can be very easy to underestimate the amount you’ll need to save, especially when you’re trying to figure out how much you’ll think you’ll need to have a comfortable life when you’re no longer working.

Sooner the better

The one thing most experts agree on is that the earlier you start, the less you’ll need to put into a pension scheme to obtain the income you’d like.

Paying around 10% in your early 20s may well get you a decent level of retirement income, but wait until your 40s and the contributions needed to obtain the same income could be double.


Many people will tend be part of a company pension scheme, whether that’s a defined contribution scheme, or, less likely these days, a defined benefit scheme.

A defined contribution pension means you pay in a certain amount but you’re not actually guaranteed to know what the eventual income will be, although you should be able to obtain projections throughout your working life.

A defined benefit pension on the other hand means that you pay in a particular figure, but your employer guarantees to pay you a certain percentage of your final or average salary.

One thing that has changed in the last couple of years is that all employers must provide a pension scheme for their employees. These will typically be defined contribution schemes.

The detail of any pension scheme should be discussed with a professional independent financial adviser however the essence of these pensions is that you make a contribution, your employer makes a contribution and the government also puts something in.

You don’t have to be part of your employer’s scheme but both they and the government are giving you money for nothing so it’s certainly worth considering.

Speak to an expert

If you would like to speak to one of our advisers about your pension options, click here.

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