| Even small increases in pension contributions can substantially enhance retirement savings through compound investment growth | Modest, consistent contributions over a career significantly boost long-term financial security and quality of retirement life | Do your future self a favour with a one-off lump sum payment or incremental monthly increases. |
Everyone knows that a healthy pension pot is crucial for a comfortable retirement. For some workers, however, saving for retirement can seem like a low priority compared to making mortgage payments, saving for a house deposit or keeping up with monthly bills.
Small gains
New research1 shows how even a small uptick in pension contributions can go a long way to improving your quality of life in retirement. Modest increases in pension savings, combined with the power of compound investment growth, can soon add up.
For example, the research highlights – if a 22-year-old with a salary of £25,000 were to pay the minimum auto-enrolment contributions (5% employee, 3% employer) throughout their career, they could build an inflation-adjusted pension pot of around £210,000 by the time they turn 68. In this scenario, if monthly contributions were increased from 5% to 7%, come retirement age, they would have a pot of £262,000, a boost of over £50,000.
A gift to your future self
More than three in 10 UK adults are already increasing their workplace pension contributions beyond the minimum level. Meanwhile, one in ten have made a one-off lump sum payment. Whether monthly or ad hoc, boosting your pension savings is worthwhile – your future self will thank you.
1Standard Life, 2025
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.
Figures are examples only, based on assumptions. Actual outcomes will differ and are not guaranteed