We are often asked about how much you need to build up in a pension fund or how much you need to save for retirement.
Firstly, the simple answer is you should always pay in as much as you can afford, do not overstretch yourself so that if things become tight because of mortgages or children or cost of living expenses, you do not want to stop saving for your retirement.
The £10k pa Rule
Imagine walking into a bank and needing interest on your savings of £10,000 pa. To achieve this:
Excluding your state pension and using simple multiples, this means that:
We have built a series of calculators to help you with planning your retirement and how much you need to save each month or what size of pension fund you need for a secure retirement:
Pensions are a serious matter and we must all plan in the long term to achieve our goals, so save, save regularly and don’t get put off by the numbers because you will get there, but never over extend yourself as it is worse to start a pension and then cut back or stop paying in altogether. Happy pensioners tend to have secure pension income and usually live longer, so it is worth it to save regularly no matter what age you are.