Delaying Pension Saving

Delaying Pension Saving

According to Legal and General, people who delay saving for their pension until they reach 35 must contribute £423 a month – more than double the amount required at 25 – to achieve £20,000 a year at the age of 60.  It found that starting pension contributions a decade earlier at 25 brought the required monthly payment down to just £205, assuming a 7 per cent annual return and charges of 0.8 per cent a year.  Legal and General also said the extra needed to provide a reasonable standard of life in retirement rose the longer it was left.

Legal and General are concerned the rising cost of living will persuade more people to neglect their pension savings as household budgets are squeezed.  Adrian Boulding, wealth policy director for Legal and General said “When you are 25 or 30, retirement seems a long time away, but if people begin to save even a relatively modest amount at that age, they can look forward to a much more comfortable retirement while reducing the risk of having to pay larger sums in later years”.

Useful links:

Learn more about Pensions Advice and related topics in the Pensions Adviser Channel

Request expert financial advice now

Purchase guidance on financial planning in the Money Shop 

Back to News Summary