How much should I be saving?
This is a question many of our clients ask us. We can only give a generic answer here but in an ideal world you want to be contributing as much as you can. The rules now allow you to contribute all your Relevant UK Earnings into a pension (effectively capped at £245,000 for the 2009/10 tax year). For some people this is realistic, but for many it is not.
Generally when our advisers sit down with a client they would encourage them to at a minimum divide their age by two and then contribute that amount as a percentage of their salary into a pension scheme. For example if you are 30 you should consider contributing at least 15% of your salary, or if you are 40, 20% of your salary and so on.
It may sound a lot, and it is not affordable for everyone but remember, to receive a basic pension income of just £20,000 a year, a male aged 65 would currently need a pension pot of approximately £300,000 (depending on the basis of the annuity).
If you're currently deciding how much to pay into a pension or think you should be saving more you may find our Pension Calculator extremely useful. It allows you to try different contribution amounts and retirement options to give you an illustration of how much you could expect to receive as an income when you retire.