Think you’re saving enough for your future? Probably not, according to a pensions rule of thumb shared by Martin Lewis. In the latest edition of his newsletter, the Money Saving Expert (MSE) founder focused on pensions, with guidance on everything from finding lost savings to maximising your investment. Among this advice, he also looked into how much we should be setting aside for retirement — and it’s certainly sobering.

‘Take a deep breath,’ urged Martin, before revealing a ‘scary’ rule of thumb to work out your route to a decent pension savings pot. He explained: ‘Take the age when you start putting money in your pension, halve it, and that’s the % of your pre-tax salary to aim to put into your pension for the rest of your working life for a strong retirement income. ‘So start at 20 and it’s 10% (this includes employer’s contributions), at 40 it’s 20%.’.

If we drill that down, it means a 40-year-old on the average UK salary for their age (£40,040) is supposed to invest £8,008 into their pension this year alone. The figure for a 20-year-old on the average wage of £22,932 is £2,293.20. Bear in mind, exact amounts will increase or decrease along with how much you earn, and your personal contribution will differ depending on how much your employer puts in.

However, the exercise itself offers a worthwhile – if stark – insight into the consequences of burying your head in the sand. ‘Don’t worry, almost nobody gets there,’ Martin added. ‘The real takeaway is that the earlier you start, the better, as you’ve longer for gains to compound.’. The MSE website highlights that ‘most people are unable to contribute enough at the beginning for the “half your age” rule,’ so you should ‘start with whatever you can.’.

It’s also advised to earmark a set proportion (rather than a set monetary amount) each month, meaning you don’t fall behind as your earnings go up. And Martin offered an additional tip for newsletter readers too: ‘Every time you get a pay rise, if possible put a chunk of that into your pension before you get used to the increase.’. Lifestyle creep (sometimes known as lifestyle inflation) is a real thing, so getting in ahead of it is a nifty way to trick yourself into being responsible.

Spending in the here and now is often necessary, but just think how happy ‘future you’ will be if you look out for them too. Do you have a story to share?. Get in touch by emailing MetroLifestyleTeam@Metro.co.uk. Life admin apps to save the day? Brits rely on seven pocket pals for budget control. Arrow MORE: Martin Lewis issues major warning over ‘easy’ online check-out method. Arrow MORE: Martin Lewis reveals clever trick to beat school holiday travel price hikes.

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