At a glance

  • By age 30, you should have the equivalent of a year’s salary in the bank or in your pension.
  • By 50, you should have six times your salary in your retirement savings.
  • A financial adviser can give you retirement savings advice, support and strategy that will put you on course towards a great retirement.

There are two key questions people tend to ask retirement. “How much money do I need?” and “Have I left it too late to start saving?”

Both million dollar questions, but ones that many of us don’t seriously consider until we reach middle age. Our 2024 consumer survey carried out by Opinium on our behalf, The Real Life Advice Report, discovered that planning a retirement is the biggest single reason for seeking financial advice, yet the majority of us don’t start planning in any meaningful way until we hit our mid-fifties. Tellingly, the Report also highlighted that starting to save in your 50s may mean that some goals you dream of for your retirement may be already beyond your financial reach.1

However, the good news is that by spreading your saving over decades – and yes, starting early – you’re much more likely to achieve a great retirement. Too many of us still think that we’re either too old, or too young, to start saving for retirement.

Great retirements require long-term practical planning. In this article, we break retirement saving down, decade-by-decade.

“How much money will I need?”

Let’s tackle the first question – “How much money will I need?” A good rule of thumb is to have a pension pot worth about ten times your annual salary by the time you retire. But a financial adviser can help you finesse this figure and create a personalised plan. That way, you know what you’ll need to spend your money on in retirement, and what you’ll want to spend your money on to enjoy life. Their advice can help make sure you capture everything – plus factor in inflation and potential medical or social care costs in the future.

The sum may surprise you. But, like every big challenge, it’s about breaking it down into simple, actionable steps.

What you should be saving in your 20s

You should aim to have saved the equivalent of a year’s salary by age 30. That might be personal savings, but it also might be in a workplace pension. If you’re working for a company, they will auto-enrol you in a workplace pension unless you choose to opt out. When there are so many other (tempting) things to spend your money on, staying in an employee pension is sound advice. A basic rate taxpayer gets an extra £25 for every £100 they save into their pension, thanks to tax relief. Your employer will also be contributing to your pension and may even match your extra savings. Free money – what’s not to like?

Starting pension contributions in your mid-thirties, when your earning power is starting to climb, may literally translate into money in the bank. And you will have more years to benefit from that magic ingredient: compounding.

What you should be saving in your 30s

By the end of your 30s, you should aim to have retirement savings equal to three times your annual salary. At this time of life, with so many demands on your salary such as a mortgage, or young family, you may be tempted to pause your pension contributions altogether. Retirement seems a very long way off. But, if you have the discipline to stick with your long-term savings plan, those ‘little and often’ affordable contributions will be slowly buying you a dream retirement. And it’s OK to start small if you need to and gradually build up your retirement savings over time. Affordable means sustainable.

Increasing your contributions year on year in line with inflation, or a wage rise, is a tax-smart plan too.

What you should be saving in your 40s

Your savings goal should equate to six times your annual salary by the time you turn 50. Earnings often peak in this decade, so make the most of your ‘fabulous forties,’ and put a little extra in your pension if you get a great bonus or wage rise. You’ll be making even bigger strides towards your retirement target.

Financial advice can help you potentially double your pension pot every decade, despite the ups and downs of financial markets. This is why a pension fund is a great way to save and invest.

What you should be saving in your 50s

By the time you turn 60, the end of your working life may be in sight. By this age, you should aim to have saved the equivalent of eight to ten times your annual salary. Now is the time to make more specific plans. How much will you need to retire? Do you either want to, or need to work a bit longer, so you can save some more? Not everyone wants a ‘hard stop’ at 65. Can you afford that holiday of a lifetime? When you’re calculating your retirement income, don’t forget the State Pension. You can check whether you’re on track for a full State Pension, or if you need to make some additional payments while you’re still working to bump it up.

Is it too late to start saving for my retirement at 60?

It’s never too late – but earlier is, as we hope we’ve shown, better. You’ll still get the tax breaks on contributions too. Just be aware that pensions are best used for long-term saving, and a financial adviser may be able to show you other options you’d not thought of if you want to start your retirement saving on a tighter timescale. They can help advise on what will suit your personal situation best – whether that’s ISAs, pensions, equity release* or another form of investment. Plus most of us can expect to receive some form of State Pension when we’re 67.

Spreading your assets gives you greater flexibility and control over when you draw on those different funds, and for what. You might have an ISA that could fund some ambitious travel, and a pension to cover your day to day living expenses.

Your 50s and 60s – getting match-fit for retirement

Building up your assets for retirement is only half the story. It’s having a financial plan that will help you get ahead of the game. If you’re actually planning your last day in the office, now’s the time to start thinking about how you want to draw the income you’ve saved. This is a key part of your retirement income plan, so get some financial advice to help you draw your pension, or your savings, in the most sustainable, tax-efficient way.

Start planning by decade and you won’t be leaving your dream retirement to chance. Get in touch with us today, and let’s get the retirement party started!

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.

* Equity release is a lifetime mortgage. To understand the features and risks associated with such products, please ask for a personalised illustration.

Sources
1The Real Life Advice Report was commissioned by St. James’s Place. Opinium surveyed just under 12,000 UK adults nationwide in two polls between May and August 2024. Quotas and post-weighting were applied to the sample to make the dataset representative of the UK adult population. Quantative data referenced is sourced from the first poll which had a total sample of 7,995 respondents. Survey included those aged 18-34 (1,940), aged 35-54 (2,654) & aged 55 and over (3,401). 

SJP Approved 14/04/2025