Am I saving enough into my pension pot?

There is always a balance to be had between enjoying the here and now whilst saving enough for retirement.  To help you decide what is best for you and your pension pot, you might find it helpful to consider the following four questions. 

When you’ve decided to start saving for retirement, you need to choose how you’re going to do it.

Pensions have many important advantages that will make your savings grow quicker.

Whether you are employed or self-employed, if you put money into a pension scheme, it qualifies for tax relief. This means that as well as the money you’re putting in, some of your money that would have gone to the government as tax now goes into your pension pot instead. If you don't earn enough to pay tax, you may still be able to make contributions up to £2,880 a year with tax relief making them up to £3,600.

This is one of the benefits of a pension over a traditional savings account and is why pensions are so important. Check out a range of useful guides for building your retirement pot on Money Helper.

If you are self-employed, saving into a pension may appear difficult but given how many advantages it offers it is well worth exploring further.  Find out more here: Pensions for self-employed people.

If you’re not sure how much to save, then there is a very simple rule of thumb that suggests setting aside 10% of your gross income for retirement.

To understand more about how much you might need, the Pension and Lifetime Savings Association has conducted some research on this subject to give a general guide. Albeit this is a very personal thing, what is more than enough for one person is nowhere near enough for another.

Some employers will pay more into your workplace pension if you agree to increase your contributions too. This is known as ‘contribution matching’.

It might help you build your retirement savings faster, but make sure you can afford to pay more in.

Taking tax relief into account, it's possible to get two or three times the amount you contribute from take-home pay where an additional employer contribution is available, as they may match any further contributions you make. Find out more here: Contribution matching

When considering your income at retirement, remember to include other potential sources of income.

These include the State Pension, which you are entitled to when you retire and any other savings and investments such as a property you own, ISAs you have saved into, or inheritance.

Connect your pension to Moneyhub to track the value and see your projected income at retirement with our Retirement Modeller tool.