The cost of delay.

Stop putting it off

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.

It pays to start saving now

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.  

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 cost of delay

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

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.

Important information

When reading the example illustrations, it’s important that you consider the following:

• These figures are only examples – they’re not minimum or maximum amounts. The size of your pension fund depends on how your investment grows and on the tax treatment of the investment. You could get back more or less than this.
• The examples are based on contributions being made into the UK Equity Index Fund using the Financial Conduct Authority's standard growth rates, which are 5% a year for the lower rate, 7% a year for the mid rate and 9% a year for the higher rate.
• Legal & General uses lower growth rates for any fund where we feel it gives a more realistic indication of future returns. If you choose not to invest in the UK Equity Index Fund, and therefore choose one or more of the other funds available, different assumed growth rates may apply.
• All firms use the same rates to show how funds may be converted into pension income. The rates used for converting the fund into pension income assume an interest rate in retirement of 0.9% a year for the lower rate, 2.9% a year for the mid rate and 4.9% a year for the higher rate. These assumed interest rates are subject to review every year on 6 April using a method prescribed by the Financial Conduct Authority to reflect market changes.
• Your pension income will depend on how your investment grows and annuity rates at the time you take your benefits. We have assumed it will be paid at the start of each month and will remain at the same level throughout its payment.
• The projections are based on our current charges for the Direct Stakeholder online pension. Changes to our charges will affect the future benefits you receive.
• The illustrations assume the pension funds are within your Lifetime Allowance.
• The pension incomes illustrated assume that, if you die, your pension will not provide any income for your spouse, registered civil partner or dependant.
• A tax-free cash sum of up to 25% of the fund may be taken when you take your benefits but will reduce your pension income.