• Those who save consistently between 22-66 on course for £435,000 at retirement
  • By contrast, those who start saving between 40-66 on course for £247,000 – despite higher earnings
  • While it’s never too late to start, Standard Life calculations highlight how early savings creates options later in life and also the potential power of investment growth

Early pension saving widens your options when it comes to deciding when to retire, according to analysis from Standard Life, part of Phoenix Group.

Standard Life looked at four scenarios to determine the savings outcome of an individual on typical earnings saving through the workplace:

  • The Long-term Saver, saves from 22-66 on a starting salary of £25,000
  • The Early Start, Early Finisher, saves from 22-55 on a starting salary of £25,000
  • The Late Start, Early Finisher, saves from 40-55 whose salary at 40 is £46,500
  • The Catch-Up Saver, savers from 40-66 whose salary at 40 is £46,500*

The analysis shows that the Long-Term Saver could accumulate £435,000 by age 66, not taking inflation into account. This assumes 3.5% salary growth per year and the standard auto-enrolment contributions (3% employee, 5% employer). By contrast the Catch-Up Saver could accumulate £247,000. While their salary level will by higher at age 40, they would need to make significantly higher contributions in order to catch the Long-Term Saver who benefits from additional years of contributions and investment growth on their pension. Indeed, for the Catch-Up Saver to build £435,000 by 66, their contribution level would need to be 14% of their salary.

Standard Life’s analysis also looked at the impact for those who choose to retire early at the current minimum pension age of 55. Those who saved from 22-55 could generate a fund of £218,000 while those who start at 40 and finish at 55 could have £95,300.

Total retirement fund

The Long-term Saver

22 - 66 years old

The Early Start, Early Finisher

22 - 55 years old

The Catch-Up Saver

40 - 66 years old

The Late Start, Early Finisher

40 - 55 years old

£435,000 £218,000 £247,000 £95,300
  -£217,000 -£187,000 -£339,000

*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.

Dean Butler, Managing Director for Customer at Standard Life said: “It’s never too late to start saving and these figures illustrate that even over fifteen years, people can accumulate significant sums in their pension which benefit from employer contributions and tax relief. That said, what stands out is that the earlier you start, the greater your options. Over the years the combination of contributions and compound investment growth can really add up. If you are going to start saving later then it’s important to think carefully about contributions and what the standard auto-enrolment levels will generate in retirement.”

Retirement pot and saving scenarios illustration

*Pensions savings are investments and so are subject to fluctuation. The above graph is for illustration only.

Standard Life offers tips to maximise pensions savings throughout your working life:

  1. Make sure you’re taking advantage of all the benefits of your pension plan and your employer offers. If your employer offers a matching scheme, where if you pay additional contributions your employer will match them, consider paying in the maximum amount your employer will match to get the most out of it.
  2. Keep an eye on how much is in your pension, on a regular basis. If you know how much you have, you can work out how close you are to the retirement lifestyle you want. As UK workers now move jobs every 5 years on average, you might find you have a number of small pots- it might be worth considering bringing them all into 1 to make your savings easier to track.
  3. Getting a bonus this year? Deciding to pay some or all of your bonus into your pension plan could save you paying some big tax and national insurance deductions. Meaning you could keep more of it in the long run, and it could be a great way to give your pension savings a boost.
  4. Even a small amount could make a big difference in the long term, especially if you’re starting young. If you’re able to, think about paying a little more into your pension when you get a pay rise or have a little extra savings.



Sarah Muir
07870 397537

James Merrick
Standard Life
07974 063067


Notes to editors:

1 Calculations assume the following:

Starting Salary £25,000
Starting Age 22
Employer Contribution 3.00%
Employee Contribution 5.00%
Investment Growth 5.00%
Salary Growth 3.50%
Annual Investment Cost 1.00%

Figures not adjusted for inflation.

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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