Saving for Retirement

Retirement isn’t something you can prepare for overnight. It involves years of saving and planning to build the lifestyle you want and an income that will last throughout your future years.  Yet many people tend to avoid the subject until later in life, not realising the consequences this can lead to: some people may have to retire later than anticipated, whilst others could face a reduced standard of living in retirement.

If you share this mindset and haven’t properly thought about retirement, now is the time to do so.

Let’s face it; no one wants a miserable future. Retirement is all about having the freedom to do whatever you want and experiencing new opportunities. So the more prepared you are, the greater chance you’ll have of fulfilling the retirement you want.

When is the right time to save?

Generally speaking, the earlier you start saving for retirement, the better. Whilst this may be difficult when at college or university, the golden rule is to start saving once you’re financially stable and have landed your first proper job.

You needn’t worry about having to save a large chunk of your salary each month – you have the freedom to put away as little or as much as you can afford at the time, taking into account your personal tax allowances, within your annual allowance to benefit from tax relief on contributions. But as you become older, depending on what savings you have accumulated, it could be essential that you start to increase the amount you save – to help further boost your retirement pot.

What is a suitable way to save for the future?

There are many ways you can save for retirement – through deposit savings accounts or ISAs, for example – but the most common and possibly most appropriate way to save for retirement is through a pension.

Amongst other reasons, pensions are typically deemed the most attractive route primarily due to the tax relief on contributions. For instance, if you’re under 75 and a basic rate taxpayer, for every £80 you contribute into a pension, you’ll automatically see £100 go into your pension pot. If you’re a higher or additional rate taxpayer, you can claim further tax relief via your tax return.

To illustrate the impact of tax relief, the table below shows the potential future value of a pension fund for a basic rate taxpayer making contributions of £150 per month. We have used an assumed growth rate of 5% for illustrative purposes only. The growth achieved could be lower or higher than this.

   Age   

    Years    

 Value

20

45

£295,188

40

25

£  88,218

60

5

£  10,214

*Figures assuming average annual pension fund return of 5%.

Need help with your retirement plans? We can assist you with a range of retirement planning needs, including:

Reviewing your existing pension arrangements – we can help look at your plans and work out whether any changes could potentially be made to help achieve your goals.

Arranging an individual pension – if appropriate we can recommend a personal pension plan.

Understanding your pension fund options in retirement – there are a range of options available for using your pension fund when you come to need it, and even more so since new legislations were introduced by the Government in April 2015.


Your capital is at risk so you may get back less than you originally invested. The value of your investments and any income from them may fall as well as rise.