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How to save for retirement

Take control of your financial future with practical tips to save for retirement and grow your pension.

In this guide, we’ll cover:

How much money do you need to retire?

How much should you be saving into a pension?

What to do if you’re behind on retirement savings

Steps to grow your pension pot

How much money do you need to retire?

Retirement looks different for everyone. Some people prefer a simple, low-cost lifestyle, while others dream of travelling the world and enjoying indulgent hobbies.

According to Pensions UK, there are 3 retirement living standards to consider:

  1. Minimum lifestyle

    Costs: around £13,400 per year for a single person and £21,600 for a couple (after tax).

    What it covers: all essential needs, with a little extra for leisure, like a week-long UK holiday.

  2. Moderate lifestyle

    Costs: around £31,700 per year for a single person and £43,900 for a couple (after tax).

    What it covers: greater financial security and flexibility, including a small car and a 3-star holiday abroad.

  3. Comfortable lifestyle

    Costs: around £43,900 a year for a single person and £60,600 for a couple (after tax).

    What it covers: more financial freedom and luxuries, such as 4-star holidays abroad and weekend breaks in the UK.

How to calculate how much you’ll need

Begin by reviewing your current monthly expenses and consider which costs might change in retirement. For example:

  • Mortgage payments and commuting costs may decrease
  • Heating bills, healthcare, and hobbies like travel may increase

Retirement calculator

Take the guesswork out of planning. Use our retirement calculator to estimate how much income you’ll need to achieve your goals.

How much should you be saving into a pension?

When it comes to pension contributions, here’s a simple rule of thumb:

Halve your age when you start saving, and that’s the percentage of your salary to save each year.

  • If you start at 20, aim to save 10% of your income each year
  • If you start at 30, aim to save 15% of your income each year
  • If you start at 40, aim to save 20% of your income each year

Your retirement income will likely come from a mix of sources, including:

  • Your workplace pension
  • A private pension
  • The state pension
  • Any savings or investments you’ve built up

Explore: A guide to understanding pensions

What to do if you’re behind on retirement savings

Falling behind on retirement savings can be stressful, but don’t worry. There are steps you can take to catch up and help secure your future.

Steps to grow your pension pot

1. Increase your pension contributions

If you can free up extra cash, now is the time to boost your pension contributions. Not only could this grow your retirement savings, but you’ll also benefit from government tax relief. The earlier you start, the more time your money has to potentially grow.

To increase your pension contributions, you could:

  • Take advantage of workplace pensions
    Check if your employer offers to match additional contributions. If they do, take full advantage of this valuable benefit.
  • Ask about a salary sacrifice pension
    With a workplace pension, salary sacrifice lets you reduce your salary. The difference is paid into your pension. This can grow your pension pot while reducing your National Insurance contributions. However, keep in mind that salary sacrifice may impact benefits like life cover. Speak to your employer to understand the details of their scheme.
  • Consider a private pension

    Consider moving savings or investments into your private pension. You can contribute up to 100% of your earnings each year (capped at £60,000) and carry forward unused allowances from the past 3 tax years. For example, moving £20,000 into your private pension could result in a £5,000 government top-up, bringing your total to £25,000. Higher-rate taxpayers may also reclaim additional tax relief.

Tip: before making large contributions, consider seeking financial advice to make sure you’re making the best decisions for your circumstances.

2. Review your existing pension investments

Take stock of your workplace or private pensions:

  • Check your funds
    Review what funds you’re invested in, their performance, and associated charges.
  • Switch if needed
    Consider switching funds if the default option doesn’t meet your objectives.
  • Compare providers
    Look for lower fees or better performance records.

Remember: if consolidating pensions, check for exit fees or potential loss of benefits. Also, be wary of scams when transferring pensions.

3. Trace old pensions

If you’ve had multiple jobs, you may have lost track of some pensions. Use the Pension Tracing Service to locate them. It’s estimated that pensions worth over £31 billion are currently unclaimed or lost in the UK. 

4. Check your state pension

The state pension can be a vital part of your retirement income. To qualify, you need at least 10 years of National Insurance contributions.

Through GOV.UK, you can:

  • Get a state pension forecast
    You can find out how much state pension you’re entitled to and whether you can increase it. Check your state pension forecast.
  • Fill gaps in your National Insurance (NI) record
    If you have gaps in your contributions – from career breaks or low earnings for example – you may be able to boost your state pension by making voluntary contributions. Check your National Insurance record.

5. Boost your savings

The more you save now, the more you’ll have in retirement. Here are some ideas to grow your savings:

  • Review your budget
    Look for ways to cut unnecessary expenses and redirect that money into your pension.
  • Generate extra income
    Consider a side hustle or turning a hobby into a source of income.
  • Consider a stocks & shares ISA
    A stocks & shares ISA is a tax-efficient investment account, which can complement your pension and offer more flexibility. 
    Explore: Should you invest in a pension or an ISA?

Tip: use our retirement calculator to visualise your retirement goals and see how much you need to save.

If you receive a windfall, such as an inheritance, consider investing it for retirement. Investing can offer higher growth potential than savings accounts. Remember, investing has its downs as well as ups – and you could get back less than you invest.

Explore: Saving vs investing

6. Make the most of joint allowances

Women often face unique challenges in retirement, such as smaller pensions and longer life expectancy. If you’re a woman facing retirement alone, it’s even more important to look at ways to increase your retirement income.

If you’re married or in a civil partnership, look at your pensions and savings together. A financial adviser can help you:

  • Optimise your allowances to reduce tax
  • Help make sure both partners have funds in pensions and investments
  • Consider options like the marriage allowance, which can reduce your tax bill

7. Adjust your retirement plans

If you’re nearing retirement and worried about your savings, consider these options:

  • Delay retirement
    Working longer can give you more time to save and reduce the number of years you’ll rely on your pension. Let your provider know if you plan to defer your pension, as it may make sense to adjust your investments.
  • Consider semi-retirement
    Many people are choosing to work reduced hours in semi-retirement. This can provide financial security while allowing you to enjoy a better work-life balance. It’s also a good way to stay active and socially connected.

Key takeaway

No matter how far you are from retirement, there are always steps you can take to improve your financial future. Assess your current situation and make small, positive changes today.

This article was last updated: 31/03/2026, 11:03

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