• Standard Life analysis shows the long-term impact of changing pension contributions on retirement outcomes

Topping up pension contributions by just 2% over the course of a career could lead to £108,000 more in retirement, new analysis from Standard Life, part of Phoenix Group, reveals.

The analysis demonstrates the long-term impact that changing pension contributions can have on retirement outcomes. For example, someone that began working full-time with a salary of £25,000 per year and paid the standard monthly auto-enrolment contributions (3% employee, 5% employer) from age of 22, would amass a total retirement fund of £434,000 at the age of 66*. However, if they were to increase their monthly contributions by 2% (5% employee, 5% employer) from the age of 22, they would accumulate £542,000 by the age of 66* – £108,000 more than standard contributions would achieve. Making higher contributions would have an even bigger impact on a retirement pot – even a 1% increase in contributions would produce £54k of additional savings, just under 20 months average salary for a UK full time worker.

Total retirement fund at age of 66*
Standard contributions of 3% employee and 5% employer Contributions of 4% employee and 5% employer Contributions of 5% employee and 5% employer Contributions of 6% employee and 5% employer Contributions of 7% employee and 5% employer Contributions of 8% employee and 5% employer
£434,000 £488,000 £542,000 £597,000 £651,000 £705,000
  +£54,000 +£108,000 +£163,000 +£217,000 +£271,000

*Assuming 3.50% salary growth per year, and 5% a year investment growth. Figures are not reduced to take effect of inflation. Annual Management Charge of 1% assumed. The figures are an illustration and are not guaranteed. Earning limits not applied.

The calculations show that even a small increase in monthly pension contributions can have an extremely significant impact over the course of a career, demonstrating the power of compound interest. Starting a pension early in life and leaving it to grow means compound interest will build each year, and combining this with increased monthly contributions has a powerful effect on eventual retirement outcomes.

Dean Butler, Managing Director for Customer at Standard Life said: “It’s amazing to see how a relatively small increase in contributions can significantly boost the pension you retire on by tens of thousands of pounds. While pension payments may not be the top priority when you begin your career, or when finances are feeling squeezed, it will pay off in future. If your finances and your circumstances allow, even a slight increase in the contributions you make to your pension, will help boost your retirement outcome.

“Our calculations show that a 2% increase in monthly contributions over the course of your career, could lead to an extra £108,000 in retirement. For those in a position to do so, consistently paying into a pension from as early an age as possible and topping up payments, especially in your 20s, 30s or early 40s, can make a massive difference over time. Some employers will also match the contributions you make, giving your pot a further boost. So if you’re able to save into a pension and increase your contributions above the standard levels, your future self is likely to thank you for it.”





James Ikin
07870 397537

James Merrick
Standard Life
07713 918949


Notes to editors:

1 - Calculations assume the following:

Starting salary £25,000
Starting Age 22
Investment Growth 5.00%
Salary Growth 3.50%
Annual Inflation 0.00%
Annual Investment Cost 1.00%

2 - Calculations are intended only for the sole purpose of providing an illustration regarding the projection of savings and pensions. They should not be used with the intention to give an accurate representation of real-world outcomes.


About Standard Life

  • Standard Life is a brand that has been trusted to look after peoples' life savings for nearly 200 years
  • Today it proudly serves millions of customers who come to Standard Life directly, through advisers and through their employers' pension scheme.
  • Standard Life is part of Phoenix Group, the largest long-term savings and retirement business in the UK. We're proud to be building on nearly 200 years of Standard Life heritage together
  • Our products include a variety of Pensions, Bonds and Retirement options to suit people's needs, helping our customers to invest and save for their future. We're proud to offer a leading range of sustainable and responsible investment options.
  • We support our customers on their journey to and through retirement with comprehensive, easy-to-understand guidance so they can invest in the right way for their needs, and plan a future they feel confident about
  • The value of investments can go down as well as up and may be worth less than originally invested.

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