Advice for Pensions Awareness Week

By Emily Jacobs, Director, Richard Jacobs Pensions and Trustee Services.

How much do you need to save to ensure you can afford a comfortable retirement?
The simple answer is as much as you can possibly afford and that many people should consider saving more than at present.
This is reflected in recent research by well-known pension company Scottish Widows. Taking the average salary of £27,271 a year, a 30-year-old saving the minimum amount of one per cent in their company pension (matched by their employer) will achieve an income of just £9,734 in retirement.
Yet the consumer Watchdog, Which?, currently claim the average couple needs £26,000 to enjoy a comfortable retirement.
To achieve this would take a pension pot approaching £500,000 by the time of retirement.
Every company employing at least one person has must now set up a company pension. This has improved the ability of many people to save for retirement. It is possible to opt out of a company scheme but, thankfully, opt out rates are low.
In our experience, the awareness built up by auto enrolment schemes is encouraging many people to save more.
It is possible for people to pay more into a workplace pension – if you and your employer are only paying the pension contributions required by law, along with the state pension it is likely this won’t be enough for a comfortable retirement.
The current cap on contributions is £40,000 and this includes all personal, tax relief and employer contributions. The more you pay in, the more tax relief is added by the Government and the more you should get back when you retire.
When considering your pension contributions, you should be aware that minimum contributions are going to rise automatically. In April 2018, the minimum contribution levels will increase, you will need to contribute three per cent of pensionable income and employer contributions rise to two per cent. Then in April 2019, the minimum will rise to five per cent for individuals and three percent for employers. This will happen automatically for all those in the scheme.
If you want to save more, the first thing to do is to discuss increasing your pension contributions with your employer. At Richard Jacobs Pensions, we have worked with many companies to set up auto-enrolment schemes and can support you if you want to increase your contributions.
To further boost your pension pot, you will need to review your pensions. For example, do you have more than one pension? If so, would you benefit from bringing the pension pots together?
Investments, such as buying property or ISAs, can be considered as a long term investment for the future. Pensions are not the be all and end all and we recommend having a spread of investments which will be used towards your retirement.

Richard Jacobs Pensions is based at Lymedale Business Park, Newcastle-under-Lyme. The company has been providing pension advice to businesses and individuals for 25 years and is the pension partner for the Staffordshire Chambers of Commerce. For further information please see

Emily Jacobs