Did you know: that if you start saving at 40, you’ll need to save a considerable amount more than if you started at 20, to achieve the same retirement goals?

Currently the state pension is £11,502 per year, payable from the age of 66, but this will gradually increase to 68.

That amount is not enough to live even a moderately comfortable retirement.  In fact, it is not even enough to meet the minimum level needed to survive, according to the Pensions and Lifetime Savings Association, which says that the income required for a ‘minimum’ standard of living in retirement is £14,400 for a single person.  To achieve a ‘moderate’ standard of living in retirement needs £31,300, while a ‘comfortable’ standard of living requires an income of £43,100.

The amount you would need to save to accrue a £250,000 pension pot at the age of 67 are shown in the table below.  This amount, coupled with the state pension, would allow you to come close to a retirement income which would allow you the ‘moderate’ standard of living.

Monthly pension contributions required to achieve a £250,000 pension pot by the age of 67:

• 20 year old: £237

• 30 year old: £346

• 40 year old: £543

• 50 year old: £982

This projection assumes the following: Total product and fund charge of 0.70%; expected return rate of 5.17% which is inline with a balanced investor; inflation at 2%. The figures are not guaranteed the expected rate of return, rate of inflation and charges maybe higher or lower than the amount quoted.