How much should I save?
This depends on how much you need in retirement. Bear in mind that your lifestyle will probably be different. Some of your outgoings may decrease but others may increase. For a comfortable retirement, you should aim for a pension income of two thirds of your salary. So if you’re earning £350 a week, aim for at least £230 a week – that’s more than twice as much as the current basic state pension.
What you need to think about?
How much is the state pension?
The basic state pension isn’t enough for a comfortable retirement. From April 2011, the state pension is £102.15 a week.* Remember you should aim for two thirds of your salary as your retirement income.
How long will my income last?
You could spend 20 years in retirement. If you retire at 65, on average you can expect to spend a further 18 years in retirement if you’re a man and 20 years if you’re a woman**, so you need enough savings to provide an income for a long time.
How will the cost of living change?
The cost of living will probably increase. Do you remember when a pint of beer cost a £1? Who knows what it will cost in 5 or 10 years time.
What can I expect to get back?
How much you actually receive from your pension depends on:
· How old you were when you started saving - The sooner you start, the more time your pension fund has to grow.
· How much you pay in - The more you can add to your pension, the more you’ll receive when you need it.
· How your pension fund grows - Your pension depends on how well the funds you invest in perform. The better they perform, the more money you’ll have in your pension fund.
The table below shows the estimated monthly pension at today's prices that you would get for different monthly contributions, and gives you some idea of how much you need to save each month to reach that retirement income:
|
|
£20
|
£50
|
£100
|
£200
|
|
Your approximate age now
|
Per month for the first year. Tax rebates are added to this amount.
|
|
Initial monthly pension if you retire at
65
|
Initial monthly pension if you retire at
60
|
Initial monthly pension if you retire at
65
|
Initial monthly pension if you retire at
60
|
Initial monthly pension if you retire at
65
|
Initial monthly pension if you retire at
60
|
Initial monthly pension if you retire at
65
|
Initial monthly pension if you retire at
60
|
|
20
|
£92
|
£63
|
£231
|
£159
|
£463
|
£319
|
£926
|
£639
|
|
25
|
£74
|
£50
|
£186
|
£127
|
£373
|
£254
|
£746
|
£508
|
|
30
|
£59
|
£39
|
£148
|
£99
|
£296
|
£198
|
£593
|
£396
|
|
35
|
£46
|
£30
|
£115
|
£75
|
£231
|
£150
|
£463
|
£301
|
|
40
|
£35
|
£22
|
£88
|
£55
|
£176
|
£110
|
£352
|
£220
|
|
45
|
£25
|
£15
|
£64
|
£37
|
£128
|
£75
|
£257
|
£151
|
|
50
|
£17
|
£9
|
£44
|
£23
|
£88
|
£46
|
£177
|
£93
|
|
55
|
£10
|
£4
|
£27
|
£10
|
£54
|
£21
|
£108
|
£43
|
|
60
|
£5
|
-
|
£12
|
-
|
£25
|
-
|
£50
|
-
|
This table is taken from the Money Advice Service's stakeholder decision trees which are correct as at 10/01/2011.
If you’d like to know how much you can expect to get back based on your personal circumstances, contact us for a personal illustration.
You can boost your retirement savings by making your own contributions to EasyBuild. The sooner you start saving, the more time your pension has to grow. Even a modest sum each month can make a big difference to your income when you retire. Just let us know how much you want to save by either completing
a payroll deduction form where your contributions will be taken straight out of your pay packet
a direct debit mandate if you wish to set up your own contributions
To find out more, take a look at our EasyBuild Product Guide & Key Features You can also use the Money Advice Service's decision trees which are intended to help you make your own choice about your pension arrangements
* http://www.direct.gov.uk/en/Pensionsandretirementplanning/State-Pension/DG_183754
** http://www.statistics.gov.uk/pdfdire/liex1010.pdf