Dreaming of a retirement you can look forward to but unsure how much money you’ll need to save to get there? 🏝️ You’re not alone. According to our survey, 65% of young people aged 20-40 say they have no idea how much to save for retirement1. But it’s not as complicated as you might think.

Our handy Pension Calculator does the leg work for you. You can use it to work out what you should aim to save for life after work, and what you need to do to get there. In four simple steps, you can start building a retirement worth waiting for using our Pension Calculator…

 

1. Get an estimate of what you should save 💰

We know it’s difficult to imagine what kind of life you’d like in retirement or how much you should be saving for it – especially when you have more immediate decisions to make right now.

The Pension Calculator crunches the numbers for you and estimates how much you should aim to save for retirement. It works out your target goal using some basic info about you, including:

  • Your current annual salary
  • What age you’d like to retire
  • Your current pension savings
  • Your workplace pension contributions
  • Your regular contributions will also be taken into account if you currently save into a personal pension
  • State Pension

 

2. Find out if you’re on track 🎯

To make things simple, the results are broken down into four categories – target pot, projected pension pot, target income and projected income – and plotted out onto a graph, making it super easy to see where you need some extra help.

Target pot

The total amount of money you should aim to save, to see you through retirement.

 

Projected pension pot

How much your pot might be worth at retirement age.

This pot value is calculated based on a few assumptions: that investments across all your pensions will grow at a rate of 5% each year, with total fees on those pots charged at 0.68% per year; that your salary will increase 2.5% every year until retirement; all contributions you make into Personal Pension and Workplace Pension are eligible for tax relief.

 

Target income

What annual income you should aim for in retirement. Both your target and projected income are adjusted for inflation of 2%.

 

Projected income

What your annual income is set to be at retirement. Projected income is based on the value of your projected pension pot(s) at retirement and how long you might be expected to live.

It’s important to remember that your results are broad illustrations rather than accurate results. We can’t predict the future (we’re good, but we’re not that good) 🔮 and can’t guarantee the value of your pot will reflect your projection at the age of retirement. You might get less than the projected pot value and income at retirement and you might run out of funds before you die.

 

3. Make an action plan ✔️

If you’re not quite as far ahead in your savings progress as you’d like, don’t panic! Based on your outcomes, the calculator suggests small changes that you could take to get on track for retirement.
There are lots of simple steps you can take now that could make a big difference later…

 

Open a Personal Pension

As a general rule of thumb, guidelines from experts say that if you want the same standard of living as you have now, you should save around 7x your annual income by the age of 682.

Our mantra is that the sooner you can start putting money away for your future, the better. But, we know that sometimes that just isn’t possible. When thinking about how much to save for retirement at different stages of your life, the ‘save half your age’ rule of thumb is a good place to start.3 By this rule, you take the age at which you start saving for retirement and divide it by two. Then you’ll aim to save that percentage of your gross salary (before taxes and deductions) each year. So if you start saving at 30, you should aim to save 15% of your salary per year. 

It’s worth checking what you currently contribute to your workplace pension. Some people might find that your workplace pension contributions alone might not be enough and it could be worth contributing to a personal pension too.

The Moneybox Pension makes it easy to start building a retirement fund worth waiting for. With a Moneybox Personal Pension you can:

  • Find and combine your old pensions 💰
  • Save how much you want, whenever you want 💵
  • Get 25% top-ups from the government 🤑
  • Choose from a range of funds 📈
  • See your money in one place 📲
  • Have access to award-winning customer service 😁

🎓 Read more about how the Moneybox Personal works and why it could be right for you.

 

Find and combine old pensions

If you’ve had multiple jobs in recent years, you could have pension savings you didn’t even know about! Our in-app Provider Search tool and team of Pension Detectives can help you track down your old workplace pensions – even if you don’t know the name of your old provider or policy number.

Finding and combining your pensions into one pot makes it easier to manage and could result in greater gains by the time you reach retirement.

 

Get free government top-ups

Get free 25% top-ups from the government into your Pension on whatever you contribute. We’ll even claim basic tax relief for you and automatically add it to your pension.

 

4. Monitor your progress 📈

Time for a little manifesting magic. ✨ No, we’re not talking about charging crystals or declaring your desires to the universe, we’re talking about setting and tracking goals. Research shows that by consciously setting goals and regularly monitoring the progress, you’re more likely to succeed in achieving them.4

Keep reviewing your projected and target pots regularly to help you plan for your retirement and make any adjustments along the way to get you on track for the retirement you want.

 

Use the Pension Calculator

 

1 Survey of 2,008 UK adults aged between 20 – 40, undertaken by Opinium Ltd between 26 Aug 2021-28 Aug 2021 on behalf of Moneybox, the saving and investing app

2 Fidelity Global retirement savings guidelines whitepaper November 2018

3 Fidelity Global retirement savings guidelines whitepaper

4 Does Monitoring Goal Progress Promote Goal Attainment? A Meta-Analysis of the Experimental Evidence, Psychological Bulletin, 2016, Vol. 142, No. 2, 198–229

When deciding whether to transfer your pension, it’s important to compare the charges and benefits between Moneybox and your old provider. As with all investing, the value of your pension can go up and down, and you may get back less than you invest. Tax treatment depends on individual circumstances and is subject to change. You cannot withdraw from your pension until age 55 (increasing to 57 in 2028). We do not offer drawdown products. Moneybox Personal Pension T&Cs Apply.