How much you need in your pension to retire — and four things to help you reach that amount
Four ways to ensure you’re better off when you retire
- The government has announced new measures to address the growing issue of people not saving enough for retirement, with the work and pensions secretary Liz Kendall stating almost half the working-age population is not saving at all.
- The pensions commission has been revived to determine how best to help workers, as experts warn those retiring in 2050 are on course to receive significantly less private pension income than current pensioners.
- Individuals should check if their employer offers higher pension contributions beyond the minimum 3 per cent, as many will match increased employee contributions, significantly boosting savings without a major impact on take-home pay.
- Increasing personal pension contributions, even by small amounts like 1 per cent, can lead to substantial long-term gains over a career due to investment growth, with ideal times to do so being after a new job, promotion, or pay rise.
- Further actions include checking for and potentially backpaying National Insurance contribution gaps, utilising other personal pension plans like SIPPs or Lifetime ISAs for tax relief, and addressing the high risk of undersaving among the self-employed.