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Reaching your saving targets at different ages

By Paul Davies

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Reaching your saving targets at different ages

Discover how much you'll need to save in a pension to have a comfortable retirement using our interactive chart.

Once you've worked out what you deem as a ‘comfortable’ retirement and how much will make you happy, the next challenge is to make sure you’re on course to achieve your targets.

How much do you need to save each month?

We’ve calculated how much you’ll theoretically need to save per month as a couple in today’s money if you started paying into a pension at different ages to achieve target retirement incomes of £26,000 and £39,000 a year (including the state pension). 

These amounts represent a ‘comfortable’ or ‘luxurious’ lifestyle in retirement, and would require pension pots of £210,000 and £550,000 respectively. 

Which? surveyed more than 2,749 retired and semi-retired members about their spending in February 2017; on average, retired couples found £18,000 a year covered the household’s essentials – food, utilities, transport and housing – and £26,000 allowed for extras, such as European holidays. 

With £39,000 a year, they stretched to long-haul trips and a new car every five years.

The calculation includes what you’ll get from the state pension and the remainder made up by taking out money each year from an income drawdown plan to get your annual income to £26,000 or £39,000.

Getting your pension savings on track

The projections contain some quite scary numbers, although saving £131 per month from your mid-20s is obviously more palatable than having to find £633 if you leave your retirement saving until later in life. 

On the other hand your monthly income should rise as you move through the decades and if you are in a company pension scheme, your employer will be contributing some towards your target amount.

The good news is that although you probably won’t be saving at the above levels in your 20s or 30s, you’d have probably kicked off your retirement pot at least, and won’t have to start saving from scratch in your 40s and 50s.

Many of us will still be some way behind what we want to achieve with our final pension income. The simple answer is to put more money into our pension at an earlier age, but this isn’t always possible with all our other financial demands. Which? rounds up what you need to be thinking about:

  • Last updated: April 2017
  • Updated by: Paul Davies

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