How much should I be saving into my pension?

The beginning of a new year brings new resolutions and opportunities for people to review various aspects of their life, including their finances and their pension savings.

This is very important to do as currently 38% of savers are not on track for a minimum lifestyle in retirement and 66% of savers do not think they are preparing adequately for retirement (Scottish Widows Retirement Report, 2024).

But often, knowing how much is actually enough to be saving, can be pretty tricky.

How much you should be saving into your pension each month is determined by your goals for retirement and how on track you are to reach those goals.

This varies from person to person, but as a rule of thumb, we recommend that people who pay into a workplace pension should aim to contribute around 15% of their salary into their pension. This 15% is made up of both you and your employer’s contributions, as well as any tax relief from the government. You should check what contribution levels are available from your employer, because they may pay in more, if you pay in more too.  

Of course, this is just a suggested amount, and what is enough for you, might be different to what’s enough for someone else. Factors such as, how much is affordable, what your retirement aims are and how far away you are from retirement, will impact how much you can and should be saving to reach your goals. 

The Pensions and Lifetime Savings Association’s Retirement Living Standards provide a great way to help you get an understanding of how much money you may need to achieve various standards of living in retirement. You can use these as a starting point to help you figure out how much you think you might need based on your lifestyle and goals.

 

So what are the steps you can take to help you get on track and understand how much you should be saving?

Step 1 - Check how much you already have in your pension. If you’re a Scottish Widows customer, you can do this through the Scottish Widows app.

Step 2 - Take a look at the Pensions and Lifetime Savings Association’s Retirement Living Standards to help you get an understanding of how much you might need in retirement based on the lifestyle you want and expenses you may have.

Step 3 - Use our Meet Your Future Self tool to see when you’re likely to meet your retirement savings goal based on your age, current pension value and contributions. This can help you understand how on track you are to meet your goals.

Step 4 - Review your current pension contributions and consider if you could pay more in. You should also look at the contribution structure available to you through your employer, as your employer may pay in more too if you increase your contributions.

FURTHER RESOURCES TO HELP YOU SAVE FOR YOUR RETIREMENT

Keeping your pension safe

1 chapter

Learn to spot the signs of a pension scam and keep your money safe.

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Combining pensions

1 chapter

Find out how to consolidate your pensions - it could make life easier.

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Your retirement options

1 chapter

Explore ways you can take your pension savings when you are able to access them.

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