Why it pays to increase your pension payments regularly

Increasing your pension payments by a small amount every year could make a big difference to your final pension pot.

We show you how regular annual increases could really add up, whether you start a pension at 25, 35 or 45.

Starting a pension at 25

40 years to go to until retirement
This graph shows you how much you could end up with in your pension pot if you start a pension at 25 and increase your payments by 2%, 3% and 5% a year.

These figures are illustrations only to demonstrate the potential growth of your pension pot. As with any investment the value of your fund can go up or down and may be worth less than what was paid in.

We've assumed that you would start by paying in £200 a month and that your pension pot will also receive £50 tax relief on each payment.

They are shown in today's prices taking account future inflation of 2.5%. We've made some assumptions: that the tax and pension regulations don't change (based on our understanding of these as at December 2012) and that you'll retire at 65.

We've also assumed that your investments will grow at 7% per annum (you may get more or less than that); that your annual charges will be 1% and that no tax free cash lump sum is taken at retirement.

Starting a pension at 35

30 years to go to until retirement
This graph shows you how much you could end up with in your pension pot if you start a pension at 35 and increase your payments by 2%, 3% and 5% a year.

These figures are illustrations only to demonstrate the potential growth of your pension pot. As with any investment the value of your fund can go up or down and may be worth less than what was paid in.

We've assumed that you would start by paying in £200 a month and that your pension pot will also receive £50 tax relief on each payment.

They are shown in today's prices taking account future inflation of 2.5%. We've made some assumptions: that the tax and pension regulations don't change (based on our understanding of these as at December 2012) and that you'll retire at 65.

We've also assumed that your investments will grow at 7% per annum (you may get more or less than that); that your annual charges will be 1% and that no tax free cash lump sum is taken at retirement.

Starting a pension at 45

20 years to go to until retirement
This graph shows you how much you could end up with in your pension pot if you start a pension at 45 and increase your payments by 2%, 3% and 5% a year.

These figures are illustrations only to demonstrate the potential growth of your pension pot. As with any investment the value of your fund can go up or down and may be worth less than what was paid in.

We've assumed that you would start by paying in £200 a month and that your pension pot will also receive £50 tax relief on each payment.

They are shown in today's prices taking account future inflation of 2.5%. We've made some assumptions: that the tax and pension regulations don't change (based on our understanding of these as at December 2012) and that you'll retire at 65.

We've also assumed that your investments will grow at 7% per annum (you may get more or less than that); that your annual charges will be 1% and that no tax free cash lump sum is taken at retirement.

Important information

As with any investment the value of your fund can go up or down and may be worth less than what was paid in. Laws and tax rules may change in the future. The information here is based on our understanding in September 2012. Your personal circumstances also have an impact on tax treatment.

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