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
