An expert has lifted the lid on the amount need to have saved in your pension pot by the time you reach 50. Although it is never too late to plan for your retirement, it is easier to start when you get your first job, according to financial advisors.
Daniel Wiltshire, an actuary and independent financial advisor at Wiltshire Wealth, told Express.co.uk there are a range of factors to consider when deciding on the right amount.
He said: “An approximate rule of thumb is that by age 50 you should aim to have saved at least six times your annual salary in your pension.
“But the actual answer is, annoyingly, that it depends. Factors to consider are: when you plan to stop work; how much you expect to spend in retirement; whether you’re entitled to the full state pension; potential inheritances; your state of health and so on.
“It’s not a simple question, but typically it’s best to start saving as early as possible – it’s never too late.”
Joshua Gerstler, a chartered financial planner and owner of The Orchard Practice, agreed, but said life will be a lot easier if you start planning when you get your first job rather than towards the end of your last.
He told Express.co.uk: “You may not need to have any money in a pension as you may have your retirement income covered from other areas such as ISAs, bonds, property, inheritance etc.
“If you have nothing elsewhere then you need to take action now. How much you will need to contribute will depend on how much you want to spend in retirement.”
Mr Gerstler said an old rule used to say that at 50 you should be putting away 25 percent of your income for retirement.
He added: “But if you have nothing saved already then it is likely that you will need to do much more. Do not fret, as doing something is better than doing nothing.”
Financial advisor St Barts Finance recommends making sure you are signed up to an auto-enrolment pension scheme and, for those who want to, checking to see if retiring early is financially viable in order to maximise your pension pot.
It says that the longer you leave your pension pot untouched, the more money you will have by the time you actually come to retire.
Life insurance provider Aegon states the average pension pot in Britain stands at almost £50,000, with men saving an average of £73,600 and women £24,900.
You might then ask yourself, would such a sum be enough for you to live on comfortably or would you need more?
If you want to reconsider your financial circumstances or make any changes, St Barts Finance advises consulting a financial advisor to assess your situation.
Remember the value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.
