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If you want a decent pension save £550,000, report reveals. But how?

Helping young people understand the importance of saving is a daily task for us here at MyBnk. Many ask us about investments, like pensions.

How much should I put away? When do I start? When do I want to stop working?

The guide is 12% of your income from age 30.

However, according to experts at Scottish Widows if you want to kick back and retire on the average annual salary of £26,000, you need to tuck away….£550,000!

We couldn’t see in various articles how you would go about stashing that away, so we worked the following out…

40 years saving (i.e. 25 to 65, or 30 to 70)

£290 per month if you get 6% interest

£475 per month if you get 4% interest

30 years saving (i.e. 35 to 65)

£565 per month if you get 6% interest

£800 per month if you get 4% interest

The other thing to add, by the time we reach 65 it is unlikely £550,000 will buy you an annual pension of that much given the ongoing increases in life expectancy, plus the increased cost of living.

There’s a sexy infographic here if you want to see if you are saving enough:

http://www.scottishwidows.co.uk/about_us/media_centre/reports_pensions_infographic.html

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