Martin Lewis hosted a special pensions edition of his weekly Money Show Live TV programme on Thursday night offering insight and advice on how to make the most of your cash for a worry-free retirement.
During the show, the financial journalist was asked by a viewer what percentage of monthly income should go towards their pension pot.
The founder of MoneySavingExpert.com revealed there is a simple trick to quickly calculate it just by using your age and simple maths, but advised everyone watching to “sit down and stay calm” because what he had to say “is going to upset you”.
Martin said: “There is an old rule of thumb and it’s very, very rough.”
Essentially, you take your age and half it, that is then the percentage of your monthly income that you should put towards your pension pot.
The consumer champion explained: “If you started your pension at 22, you would want to put in 11 per cent of your earnings, including employer contributions, for the rest of your life to get a good retirement.
“So if you start at 30, it 15 per cent, start at 40 it’s 20 per cent.”
But he advised: “Nobody gets close to that, but the big thing about that equation [is that] it shows the earlier you start the better.”
You can catch up with the pension special on The Martin Lewis Money Show Live on the STV Player or ITV Hub.
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