Turn £6 a week into a £60,000 windfall
Savers could add £60,000 to their retirement pot by contributing an extra 1% of their salary into their pension.
Analysis by Fidelity International found that a 30-year-old today, earning a £30,000 salary, could end up with an additional £58,273 in their retirement fund by the time they reached 68 by increasing their pension contributions by just 1%. That assumes wage growth of 3.75% and investment returns of 5% after fees.
The extra contribution would cost just £6 a week, according to Fidelity.
A 30-year-old who saved an extra 2% could see their pension pot boosted by £116,500.
Fidelity also calculated a 40-year-old earning £40,000 who contributed an extra 1% of their salary could have an additional £37,169 in their retirement savings by the time they reach 68 or more than £74,000 if they could contribute an extra 2%.
Ed Monk, associate director for personal investing at Fidelity, said: “None of us really know how long we’ll live or what spending demands will be placed upon us during retirement, which could last many decades. Then there’s the unpredictability of financial markets which will also partly determine the income we have to live on in retirement.
“With all that uncertainty, it really does make sense to save as much as you can afford in to your pension so you can give yourself the best chance of enjoying a comfortable retirement. The good news is that even the smallest increases can give your retirement savings a massive boost.”