It’s important to start saving for a pension as soon as you can. Starting to save early increases the likelihood of you achieving the lifestyle you might want in retirement.
If you can start a pension now, either by investing a lump sum (from an annual bonus, for example) or by paying regular monthly contributions, this will give your investment more time to grow. The more your pension pot grows, the more chance you have of achieving your ideal retirement income.
The table below gives you an idea of how much you might need to contribute every month to get an annual pension income of £10,000 when you’re 65. This excludes your State pension, which you may also receive. Don't forget that inflation could reduce what you can buy in the future with the amounts shown below.
|Monthly contribution (gross)||£105||£195||£405||£1,105|
The message from the table is clear. The earlier you can start saving the better for you in the long-run. Please see the important information below.
The following examples show how delaying starting your pension could affect your potential income at retirement. The table assumes a contribution of £150 a month from the age of 25, 30 and 40 with a retirement age of 65.
Annual pension income
|Age pension started||Low growth rate|
(5% a year)
|Mid growth rate|
(7% a year)
|High growth rate|
(9% a year)
As you can see, a delay of just five years can significantly reduce your potential retirement income. Think about how this could affect your lifestyle in retirement – a 65 year old who started their pension at the age of 25 could have over £4,000 a year extra income compared to someone who started their pension at the age of 30 (assuming the mid growth rate). Please see the important information below.
Don’t put it off for another day – find out about our Stakeholder pension now.
The value of pension investments may fall as well as rise. Any investment you make into a pension plan will be tied up until you take your benefits. Benefits can normally be taken from age 55 to 99.
When reading the example illustrations, it’s important that you consider the following: