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Consumer  >  Why have a pension?  >  When should I start saving?

When should I start saving?

Although saving for retirement might not be your first priority financially, the sooner you start the better. That way your hard earned savings will have longer to grow.

By starting to save in your 20s you could accumulate a substantial pension fund by the time you retire. If you leave it until you are in your 30s or 40s you would have to save a much larger proportion of your disposable income to provide the same level of income in retirement.

As an example, regular savings of £20 a month into a pension from age 20 might provide an income of £154 a month at age 65. Putting off the start of pension saving until age 40 would increase the savings needed to over £50 a month to get the same income at age 65. These figures show the income in today's prices, and are based on the following assumptions:

• the regular savings increase each year in line with inflation
• the income in retirement increases by 2.5% a year
• half of the income continues to be paid to a spouse on death of the original saver
• the savings grow at 7% a year

Source: © The Financial Services Authority

Further examples of the cost of delaying retirement saving can be found on the consumer area of the Financial Services Authority website.

Remember these estimates are not guaranteed - you could get more or less than the amount shown.

These figures give you an idea of how much you need to pay now - as a regular monthly payment - to get the monthly income you want when you you retire.

Women and pensions