Financial guru Martin Lewis has shared a quick way to work out how much money you should be saving each year to make sure you have a decent pension pot.
He explained the method on the Martin Lewis Money Show Live on ITV. And while his method is just a "rule of thumb", it’s a good benchmark for those who haven’t started saving yet or are keen to put some extra cash away for their retirement.
Martin said that all you have to do is take your age, halve it and that is the percentage of your annual income you should be putting into your pension every year until you retire. An example of this is someone who is 30 would need to save 15% of their annual income every year. If they earned £30,000, they would need to put away £4,500 each year, the equivalent of £375 each month.
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Martin told viewers most people don’t do that, but you have to take into account your workplace pension and the contribution towards your pension made by your employer, reports the Daily Record.
His advice comes as the focus on pensions has ramped up over recent weeks following reports that the State Pension age could be rising to 68 earlier than planned, effectively meaning that everyone currently aged 54 and under will need to work longer. People with private or workplace pensions will also have to wait until they are 57 to access retirement savings due to changes coming into effect in 2028.
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