How big should my individual pension pot be?

Fidelity guidelines suggest that to maintain a similar standard of living in retirement as in working life, as a guide you’ll need to save 7x (times) your annual income by age 68 together with the State Pension. 

This increases to 11x if you’re looking for more luxuries in retirement, while falls to 4x if you’re looking to spend a lot less. Of course, you don’t have to stick to these milestones exactly, however it’s a good guide to get you thinking about the life you want to lead in retirement. 

Many people find they actually spend less when they stop working. A good rule of thumb might be to aim for a budget of around two thirds of your working salary to enjoy a comfortable lifestyle. This guideline assumes that you’ll reduce some of your expenses – such as mortgage payments and childcare.

Research by the Pensions and Lifestyle Savings Association (PLSA) outline how much you may need per year to live a minimal, moderate, and comfortable life at retirement.


Retirement Lifestyle Single Couple
Basic £14,400 £22,400
Moderate £31,300 £43,100
Comfortable £43,100 £59,000


How much should I save each year?

How much you save into your pension will differ based on when you start contributions.  The same Fidelity report states – if you start saving at age 25 and keep going until you’re 68, you should aim to put away 13% of your income each year before tax into a pension to give you a similar standard of living in retirement as in working life (this includes both workplace and personal pensions as a total). However, if you don’t start until your 30th birthday, the recommendation increases to 15% of your annual income, and by age 35 it jumps to 18%.

So if your combined pension contributions at work are 8% of your earnings, you need to top up with at least another 5% into that pension or another personal pension. If your income is £50,000, that means saving £2,500 a year – or £208.33 a month – on top of your workplace pension. If you are starting later in life and saving a total of 18%, this increases to £416.60 a month in addition to your workplace pension contributions. 

Find out how much you would need to save each month to reach your retirement goal, by entering a few details into our Pension Calculator. Plus, find out what you’re projected pot looks like against your current savings plan.


How should I pay into my pension?

Outside of workplace pension contributions, which are taken from your salary, paying into a personal (or private pension) monthly through a direct debit or standing order is a perfect way to build up your retirement savings and ‘set and forget’. The Moneybox Pension allows you to pay into your pension via weekly, one-off or monthly payments via direct debit. You can even round up your everyday purchases and save the spare change directly into your pension! 

If you’re self-employed or have variable income, setting up a direct debit from your main account may be difficult. It’s tempting to wait until you have some spare cash at the end of the month instead, but unless you’re consciously saving, you could be waiting a long time. In the meantime, you could be missing out on vital growth from your pension investments. One option is to build up your pension savings into a cash savings account that pays some interest and then drip-feed into your pension from there when it’s right for you.


Explore the Moneybox Pension


It’s not all on you

Don’t forget, you’re not on your own when it comes to saving for retirement. Pension tax relief, employer contributions and compound interest all work together to get you closer to your retirement goals.


As with all investing, the value of your pension can go up and down, and you may get back less than you invest. Payments you make into your pension won’t be accessible until the minimum pension age (currently 55, increasing to 57 in 2028). If you’re not sure whether the Moneybox Pension is right for you, a suitably qualified financial adviser can help you decide. Moneybox Personal Pension T&Cs Apply.