Save at least 11% of your income for retirement!

A recent study by leading think-tank the International Longevity Centre has suggested that people should aim to save a minimum of 11% of their income in order ‘to achieve an adequate retirement income’, which is defined as 70% of the amount earned whilst working. The think-tank emphasises that this is a minimum amount and in fact recommends a figure closer to 20%, particularly for younger adults near the start of their working life. Getting into good habits to save for your retirement can be tough, but here are a few suggestions if you’re not sure how to start.

Make automatic contributions – Auto-enrolment has recently been rolled out to aid making automatic pension contributions as easy as possible. With a portion of your pay being taken out and saved into a pension scheme before you even see it, you’ll find it much easier to live off the rest of your salary safe in the knowledge you’re putting a little away each month for your future.

Gradually save more over time – Making small increases to the contributions you’re making will help boost your pension pot in the long term. Aim to raise the amount you’re saving at least every twelve months, or every six months if you’re in a position to do so. Some automatic contribution systems have an ‘auto-increase’ option, making it even easier to regularly save a little more. If you receive a pay rise or bonus, use this as an opportunity to save a little more too.

Take advantage of contribution matching – Some employers will match any pension contributions you make, effectively doubling the amount you’re saving for your future. Don’t see this as an opportunity to save less yourself, however, as increasing your contributions even a little will mean your employer will put more away for you too.

Boost your income – If you’re still struggling to put away enough for your future, then you might want to consider increasing the amount you’re earning each month. Have a look at freelance or part-time work and make sure you save as much of your extra income into your pension.

 

Insights

Making sure you’re on track to retain your lifestyle in retirement

Do you feel like you just go to work day in, day out, with the weeks quickly turning to months and the months to years? If that’s the case, you...
Read more

4 tips to make your finances less scary this Halloween

With October kicking into high gear, bringing with it fiery-coloured leaves, thicker coats and fancy dress costumes, have a read of our article with its All Hallows Eve theme. If...
Read more

Marshmallows and Financial Planning

The Stanford marshmallow experiment is one of the most famous pieces of social science research out there. It has arguably influenced the way that many people live their lives, in...
Read more