Martin Lewis has issued a way to make sure you have a good enough lump sum in you pension pot.
The financial guru has shared a quick way to work out how much money you should be saving each year with another one if his ‘Rule of thumb’. He explained live on air on his Martin Lewis Money Show on ITV.
The method is thought to act as a a good benchmark for those who haven’t started saving yet or are keen to put some extra cash away for their retirement. Martin said that all you have to do is take your age, halve it and that is the percentage of your annual income you should be putting into your pension every year until you retire.
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An example of this is someone who is 30 would need to save 15% of their annual income every year. If they earned £30,000, they would need to put away £4,500 each year, the equivalent of £375 each month.
Martin told viewers most people don’t do that, but you have to take into account your workplace pension and the contribution towards your pension made by your employer, reports ChronicleLive.
In recent weeks reports that the State Pension age could be rising to 68 earlier than planned, effectively meaning that everyone currently aged 54 and under will need to work longer. In an effort to keep people clued up, the Money Saving Expert ramped up his advice.
People with private or workplace pensions will also have to wait until they are 57 to access retirement savings due to changes coming into effect in 2028.