And you will have more years to benefit from that magic ingredient: compounding. Even if you start off by saving £5 a day, this could equate to over £10,000 in five years, assuming an average 5% return.* This can include money from your employer and the taxman.Īs hard as it may feel to get started, your future self will thank you. You can choose to opt out, but my advice is to stay in. If you work for a company, they will enrol you in a workplace pension. You will most likely start your first job in your 20s. So, if you anticipate reaching 30 with a £35,000 salary, you’ll want the value of your retirement savings to be about the same amount. You should aim to have saved the equivalent of your annual income by age 30. The earlier you start putting money away, the greater your chances of building a pension pot that can last the rest of your life. The most important thing is to start early. But, like every big challenge, it's about breaking it down into simple, actionable steps. Once you are clear on how and when you want to retire, you can work backwards to calculate how much to save.Ī good rule of thumb is to have a pension pot worth about ten times your annual salary by the time you retire. I’m often asked, “How much do I need to retire on?” It’s a question many people struggle with, but I always recommend starting with the end goal in mind.
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