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How much should I save for retirement?

15th June 2023

The amount you need for retirement will depend on your health, lifestyle, debt and savings. No two people will be the same. But thanks to Independent Financial Advisers Wren Sterling, we have some guidance to help you work out how much you need to save.

In theory, most people’s lifestyle will slow down when they reach retirement and their income needs should be reduced. That’s not always the case and if you’re looking to do lots of travelling or make large purchases, logically, you may need a bigger pot.

It’s predicted that you’ll need two thirds of your pre-retirement income to maintain your lifestyle through retirement. This assumes that your mortgage has been paid off and there is no other considerable debt. Remember, there’s also the state pension, which can top up what you’ve saved personally. The full state pension is currently £203.85 per week, which kicks in at 66 for both men and women – but this is going to rise. It’s also calculated on National Insurance contributions and reduces if you haven’t paid 35 years of qualifying National Insurance contributions. The government website is the best place to look for more information.

How much do I need to budget?

The amount you need to budget is dependant on your individual circumstances and pension fund performance. Please book an initial free, no obligation appointment to discuss your requirements.

When should I start saving for retirement?

As soon as you possibly can. The more time you’re investing for retirement, the more you will benefit from compound interest. Compound interest is where you earn money on your interest – for example if you earn 5% on £1,000 in one year, you will earn interest on £1,050 in the second year and so on.

Remember, the current rules, which can change, means you get tax relief from the government at your marginal rate. If you’re a basic rate taxpayer, the government will give you 20% more, so £246 becomes £307. If you’re a higher rate payer, the tax relief is even higher at 40%. However, the rules change regularly. By booking a no obligation appointment with a Wren Sterling Financial Adviser, you can discuss the current rules and what these mean for you based on your current tax code.

How do I save for retirement?

The most tax-efficient way to save for retirement is via a pension. This could be your workplace pension or a personal one. If you’re employed, speak to your employer about your workplace pension. If you’re self-employed, you can get support from your accountant or an Independent Financial Adviser.

How can I boost my retirement savings?

One of the quickest ways to boost your pension pot is to start saving more pension contributions as quickly as you can.

An Independent Financial Adviser can help you make the most of your savings to help you achieve your financial goals and recommend the most appropriate pension fund for you.

To book your free, no obligation appointment with a Wren Sterling Financial Adviser, visit or call your local branch.

 

The value of your investments may go down as well as up and you may not get back the full amount invested.

Leek Building Society is a trading name of Leek United Building Society, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority with firm reference number 100014.

Leek Building Society is an introducer to Wren Sterling for investments, pensions and protection. Wren Sterling is a trading name of Wren Sterling Financial Planning Limited, which is authorised and regulated by the Financial Conduct Authority, Financial Services Register number 665653. Registered office: 13-19 Derby Road, Nottingham NG1 5AA Registered in England No. 09157918.

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