Pension-How much to contribute

Jane_G_3

I heard on the news yesterday that a person aged 30 should be contributing 15% of their income into a pension. Is there anything official to support this and if so is there a table to show how much you should contribute at other ages.
Thank you

dunstonh

There is nothing official from anyone. The FSA is there to regulate the advice given and not to give advice itself.

A popular contribution percentage given as a benchmark is to take your age and 50% of your age should be used as the amount going into your pension gross (including tax relief and employer contributions). That assumes you have no existing provision.

If you have existing provision and started in your late teens/early 20s, you could get away with less than 15%. However, remember everyone has different goals as to what income they want in retirement. Also, the annuity you will want, when you get there, will also affect the amount of income. i.e. single life annuities provide more income than joint life. increasing annuities cost more than level ones.

So, for that reason, there is nothing official and its why you have financial advisors.

Pal

Try a google search for a pension calculator, which should give you an idea of the amounts involved for your age and investment risk attitude.

15% is a generic figure for the whole population assuming they start contributing around their mid 20's and don't want to retire until they are 65.

If you want to retire earlier or start contributing later the percentage rises quite rapidly.