I’m 30… how much should I save for my retirement?

Q: "How much is the right amount to save for retirement? I'm 30 and haven't started."

While it’s easy to put off saving for retirement - after all a 20 or 30-something has more pressing demands on their money than a far-off event 40-plus years down the line - for women in particular, swift action, ideally as soon as you start working, can make a huge difference to your future financial security.

At 30 you have plenty of time ahead of you, so now the most important thing is to get started. Remember, saving something is better than nothing. So, save what you can afford and increase your contributions as your salary or income rises. When money is tight, too often people prioritise other expenses over their pension savings. But your pension is one of the most tax-efficient ways to save.

If you are part of a workplace pension scheme, it’s important you make the most of it wherever possible. Some employers increase the percentage they will match or contribute with age or length of service, so it’s always worth checking in case they will contribute more.

The minimum contribution under auto-enrolment is 8%, made up of a minimum of 3% of your gross salary, paid into your pension by your employer and 5% paid by you from your earnings. If you can afford to pay in even an additional 1% more though, it can make a huge difference to your future financial prosperity.  

“If you don’t qualify for auto-enrolment or you’re self-employed, you can set up a self-invested personal pension (SIPP). With a SIPP you can invest as little as £20 into your pension every month. The government contributes 20% basic rate tax relief on the total amount invested in your SIPP. So that means for every £20 you pay into your SIPP you’ll get a £5 top-up, giving you £25 in effect for every £20 you pay in. If you pay income tax at above the basic rate, you can claim even more tax relief through your tax return.​  

Even when you’re not earning you can still pay into your pension too. In the same way as above, if you pay in the maximum allowed as a non-working person, of £2,880 a year, the government will automatically add £720 in tax relief, giving you a total of £3,600 in your pension pot.

Whatever your age, it’s hugely important to regularly evaluate your retirement progress, even when the temptation may be to cut back on your contributions. Ask yourself what changes are needed given your current lifestyle and the market environment to help you work towards a comfortable and secure.

If you've got question of your own, you can ask the experts here.

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Tax treatment depends on individual circumstances and all tax rules may change in the future. Withdrawals from a pension product will not be possible until you reach age 55 (57 from 2028). This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.