How much should you really be saving for retirement?
We all know we should be saving for retirement, but how much is enough? It’s a question that clients ask me every week, and the truth is, there’s no single answer.
Your ideal contribution depends on when you start, how much you earn, and what kind of lifestyle you want later in life. But one thing is universal: the earlier you start, the better your chances of enjoying the retirement you dream of.
As a rule of thumb, aim to have the equivalent of your annual salary saved by age 30, three times that by your 40s, and around ten times your salary by the time you retire. These figures might sound daunting, but when broken down into consistent, realistic goals, they become achievable. For most of us, the combination of employer pension contributions, personal savings and tax relief makes building that fund far easier than it first appears.
In your 20s and 30s, time is your biggest ally. Starting early allows your investments to benefit from compound growth, the positive effect of earning returns on your returns. Even small regular contributions can build into something significant over the decades. If you’re employed, staying enrolled in your workplace pension is one of the smartest decisions you can make. You’ll not only receive tax relief on your contributions, but your employer will often top them up too.
By your 40s, your earnings may be peaking and your priorities shifting. This is the decade to consider consolidation, review and top up. If you can, increase your pension contributions each year, especially when your income rises or bonuses arrive. Think of it as paying your future self first. A well-structured plan can also ensure that you’re investing efficiently and taking advantage of the right allowances.
Once you reach your 50s and beyond, your focus should move from accumulation to preparation. It’s time to fine-tune your goals: when do you want to retire, how much income will you need, and where will it come from? Financial advice becomes particularly valuable here, helping you understand how to draw your pension and other investments tax-efficiently, while ensuring your savings will last throughout retirement.
Whether you’re 25 or 55, the best retirement plan is one that starts today.
The sooner you take control, the greater the freedom you’ll have later in life.
The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
SJP Approved 02/04/2026
