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How much should I pay into my pension?

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Reading time: 3 mins

Chances are, at some point you’ll have wondered how much you should pay into your pension to enjoy a comfortable retirement.

The issue is ‘a comfortable retirement’ will vary from person to person. So how much you should pay into your pension pot will depend on what kind of retirement you’d like.

How much money do you need in retirement?

Most people believe that you’ll need less money in retirement, but this will depend on your circumstances. With increased housing prices and raising costs of living, it might not be that straightforward.

Most commentary talks about reduced transport costs and paying off your mortgage – but if you’re a remote worker who rents, then you may not see this drop in outgoings when it comes to retirement. However, if you’ve bought a home and plan to pay off your mortgage before you retire, then this could free up a lot of money each month.

How much of a difference retirement makes to you will depend on your lifestyle.

What should your retirement income look like?

According to Retirement Living Standards, 77% of savers don’t know how much they’ll need in retirement.[1] To help with this, they’ve created three levels of expenditure to give you a better idea of how much you might need to pay into your pension to achieve your desired retirement income.




Minimum – all your basic needs with some left over for fun

(£13,200 in London)

(£21,100 in London)

Moderate – more financial security and flexibility

(£24,500 in London)


(£36,200 in London)

Comfortable – more financial freedom with some luxuries


(£36,700 in London)


(£51,500 in London)

(source: https://www.retirementlivingstandards.org.uk/details)

That should help to give you some idea of how much money you might need in retirement, but it doesn’t really tell you how much you should pay to reach your desired figures.

Is paying into a workplace pension enough?

With a workplace pension, your employer needs to pay a minimum of 3% of your salary into a pension and you’ll need to pay 5%, making your total contribution 8% if you don’t make any changes.

But is paying into a workplace pension enough to retire on? That depends on what you want from retirement. Auto-enrolment contributions are low, which means that each year you aren’t having a huge amount paid into your pension – for example, if you were on the average UK income of £31,400,[2] then your annual pension contributions from both you and your employer at 8% would be just £2,512.

Using a pension calculator, you’ll be able to see that if you started paying £210 into a pension every month from the time you were 30 until you were ready to retire at 68, that could add up to just over £200,000.[2] That may sound like a large amount of money, but if you tried to drawdown the average salary each year then you’d run out of money in just over 6 years.

Because of this, it may be worth looking for more ways than a standard workplace pension to increase your retirement funds – this could be a personal pension, seeing how much the State Pension might pay, or even looking at investing your savings for the long term.

How much should I pay into my pension?

There are so many individual variables to consider when thinking about how much to pay into your pension. Some of the things that will determine how much you need include:

  • How old you are
  • When you’re planning to retire
  • The amount you’re paying in
  • How much your employer pays in
  • If you have a personal pension
  • Your National Insurance contributions
  • Investment performance
  • If you’re planning to withdraw a tax-free lump sum at 55

In short, to understand how much you might want to pay into your pension, a calculator that factors in all your personal circumstances is probably your best shout. These pension calculators allow you to input your own data, choose timeframes that reflect your situation, and then forecast how much this could be worth by the time you look to retire.

How much will my pension be worth and how much will my pension pay are two questions that can easily be answered by a quick pension calculation, however it’s worth noting that all these figures will be forecasts, so may not be entirely accurate but they should help to give you an idea of whether you’re on track for the retirement you want or not.


  1. https://www.retirementlivingstandards.org.uk/details
  2. This is the projected value for a Confident Plan (Medium Risk Plan) not including tax relief. This is only a forecast and is not a reliable indicator of future performance. If markets perform worse, your return could be £137,932. If markets perform better, your return could be £360,151. Values correct as of 14/07/2022



With investing your capital is at risk, so the value of your investments can go down as well as up, which means you could get back less than you initially invested.

Pension calculators only provide forecasts and not a reliable indicator of future performance.

Wealthify does not offer advice, if you’re not sure whether investing is right for you, then please speak to a financial adviser.

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