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. What you get back from your pension depends on how your investments perform, it's not guaranteed.
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 August 2011) 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. What you get back from your pension depends on how your investments perform, it's not guaranteed.
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 August 2011) 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. What you get back from your pension depends on how your investments perform, it's not guaranteed.
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 August 2011) 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
Investments can rise and fall and you could get back less than you invested. Please remember, tax relief on pensions may change and tax benefits depend on your personal circumstances. The information here is based on Standard Life’s understanding of HMRC regulations in July 2011.
