Tax, investments and pension rules can change over time so the information below may not be current. This article was correct at the time of publishing.

How much money do I need in my pension?

Saving for retirement is a key area that clients come to Four Wealth Management for. Our Financial Advisers are often asked how much needs to be saved for retirement monthly. The answer depends on your personal circumstances and a Financial Adviser at Four Wealth Management can determine how much you need to save monthly to help you reach your individual retirement income goals.

We have outlined some tips for saving into your pension below.

How much should I have in my pension?

People often overestimate the amount that they will spend in retirement. In reality, you are likely to spend much less than when you were working as it is likely that big expenses such as your mortgage will be paid off by the time you retire.

Your priorities and spending habits are also likely to change and you may spend less on food, drink and activities but more on health care and insurance policies.

A common estimate is that you need between half to two-thirds of your final working salary each year to maintain your current lifestyle. At Four Wealth Management, a Financial Adviser can work with you to determine how you can achieve this.

Find out more about retirement planning

Tax relief on pensions

Saving into a pension is one of the most tax-efficient ways to save for your future. Subject to conditions, the government will give you tax relief on your pension contributions at the level you pay income tax subject to certain limitations.

The basic rate of income tax (20%) is automatically claimed back from HMRC for you. Any further higher or additional rate relief the member is entitled to is claimed via their self-assessment tax return. Tax relief on employer pension contributions is unlimited provided certain conditions are met.

Start saving early

The earlier you start to save into a pension, the more time your pension pot has to potentially grow over time. The later you leave it to begin saving, the more you will need to contribute each month to achieve the same amount overall.

Find out more about starting a pension

When can I access my private pension?

You can currently access a private pension from the age of 55 however most people continue working which allows their pension pot more time to potentially grow and to reduce the amount of years they are relying on their pension for income.

Arrange a Professional Review of your Pension

The State Pension

The State Pension can be used to supplement your income from your private pension.

How much is the new State Pension?

The full new State Pension in the 2020/21 tax year is £175.20 per week. The amount of new State Pension you receive depends on your National Insurance record.

How many years do you have to work to get a full new state pension?

You will need to have paid National Insurance for 35 years to qualify for the new full State Pension. You will have needed to have paid National Insurance for a minimum of 10 years to receive the new State Pension.

What age will I start receiving the State Pension?

The current state pension age is 65. The state pension age is rising and will increase for both men and women to age 66 by October 2020. Further increases to the state pension age will happen between 2026 and 2028.

Start planning your retirement today

Contact Four Wealth Management today on 0117 973 0500 to book a no-obligation meeting to create a bespoke retirement plan tailored to your circumstances. A Financial Adviser can also review your current pension pots to see if they are on track to meet your goals.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.


Enquire Now

If you have any queries or would like to arrange a face to face meeting with an adviser for a no obligation review of your personal finances, simply book a call back using the form below. Alternatively, you can call us on 0117 973 0500.

The Partner together with St. James's Place Wealth Management plc are the data controllers of any personal data you provide to us. For further information on our uses of your personal data, please see the Partner's Privacy Policy or the St. James's Place Privacy Policy.

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How much money do I need in my pension?
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