How much should I save? 

A quick and simple way of roughly calculating how much to save, is to take the age you start saving into a pension, and divide that by 2. Put this % of your earnings into your pension each year until you retire. This is just one way of working towards a comfortable retirement income, but it’s important for you to consider what a ‘comfortable’ lifestyle means to you. 

Penfold helps you calculate how much money you’ll want each month when you are older, and how much you’ll need to have saved in total to make that happen. We then work backwards to come up with a suggested amount to contribute each month! The key thing to note here is that the earlier you start saving, the less you will have to save. This is because of the effect of compound interest.
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Why do I have to think about my pension now? 

It’s really important to start saving for a pension as soon as possible. Saving anything is better than saving nothing, so getting started by saving what you can afford is a good first step. Penfold can show you how to increase the amount you save gradually over the next few years to get on track. Also, remember that whatever you can afford (even if it’s only £20 a month) should be eligible for tax relief.

One more reason to start saving into a pension as soon as possible is something called ‘compound interest’ (read more about it in our glossary) Basically, when your money is in a pension it works for you by generating money from investments. If it makes money one year, there is more money the next year to make even more investments, and so on.