It’s a win for society if people have saved enough for their own retirements, too.
Knowing how much to pay into your pension can be confusing. But it's worth knowing that even the smallest increase in your monthly contributions can make a huge difference to your retirement goals.
How much should I be paying into my pension?
Based on relief at source*
You might have to say goodbye to your weekly take away coffees, but look at how much more you might end up with after investing this money into your pension instead.
Even the smallest increase in your monthly contributions can make a huge difference to your retirement goals
Based on Median salary of £30,414.80
Your pension contribution: Investing 8% of your salary - £126.73 (this is your contribution of 5%), Investing 9% of your salary - £152.07 (this is your contribution of 6%), Investing 10% of your salary – £177.42(this is your contribution of 7%)
Your employer’s pension contribution (3% fixed): Investing 8% of your salary - £76.04, Investing 9% of your salary – £76.04, Investing 10% of your salary - £76.04
Total put away (monthly): Investing 8% of your salary - £202.77, Investing 9% of your salary – £228.11, Investing 10% of your salary - £253.46
Actual monthly cost to you: Investing 8% of your salary - £101.38, Investing 9% of your salary - £121.66, Investing 10% of your salary - £141.94
Take-Home Pay (after savings and pension contributions): Investing 8% of your salary – £1,925, cutting out 7 takeaway coffees (£20.28), Investing 9% of your salary - £1,905, cutting out 8 takeaway coffees (£17.24), Investing 10% of your salary - £1,885
Total contributions over 30 years: Investing 8% of your salary - £72,997, Investing 9% of your salary - £82,120, Investing 10% of your salary - £91,246
Total after 30 years (based on an investment growth of 4.6%): Investing 8% of your salary - £154,414, Investing 9% of your salary - £173,716, Investing 10% of your salary - £193,018.
Remember, investments can go down as well as up and you might not get back all the money you put in.
To find out more about where your pension money goes, visit us at royallondon.com/secretlifeofpensions or #SecretLifeOfPensions. Find out what happens when your pension money leaves your pay packet
*Relief at source means your contributions are taken from your net pay (after your wages are taxed). Then your pension provider automatically claims tax relief for you from HM Revenue & Customs (HMRC), adding the basic tax rate of 20% to your pension contributions.