Start with the half-your-age rule
The best-known benchmark: take the age at which you start saving, halve it, and pay that percentage of your pre-tax income into a pension for the rest of your working life. Start at 25 and 12.5% does the job; wait until 45 and the target jumps to 22.5%. The rule's real lesson is the price of delay — every decade you wait roughly adds five percentage points to the required saving rate for life.
Two refinements make it fairer. First, the percentage includes tax relief, so the amount leaving your bank account is smaller than the headline — a 20% taxpayer funds a £100 gross contribution with £80. Second, if you also have a workplace scheme, employer contributions count toward the target; the personal pension only needs to cover the shortfall.
Treat the rule as a direction-setter rather than gospel: its virtue is that it converts a paralysing question (“how much is enough?”) into a number you can start paying this month, and a started pension can be tuned later. The sections below put pounds on the percentages.
What monthly contributions could grow to
The table below shows what different monthly gross contributions might build by age 67, assuming 5% a year investment growth after charges — an assumption, not a promise; real returns will differ and can be negative over shorter periods. Figures are rounded, exclude inflation, and ignore future contribution increases:
| Starting age | Gross monthly contribution | Your net cost (basic rate) | Years to 67 | Projected pot at 67 (5% growth) |
|---|---|---|---|---|
| 25 | £200 | £160 | 42 | ≈ £342,000 |
| 35 | £350 | £280 | 32 | ≈ £331,000 |
| 45 | £500 | £400 | 22 | ≈ £240,000 |
| 55 | £700 | £560 | 12 | ≈ £138,000 |
Notice the shape: the 25-year-old contributing £200 ends up with more than the 55-year-old contributing £700, because compounding does most of the work in the final decades. The 35-year-old paying £350 nearly matches the 25-year-old's outcome — catching up is possible, but each year of delay raises the price. Remember too that the table holds contributions flat for decades; in practice most people escalate with earnings, which pushes outcomes above the static figures shown.
What those pots actually buy
A pot number means little without translating it into income. Alongside the full new State Pension (£12,548 a year in 2026/27, if you have 35 qualifying years), a £340,000 pot used for level annuity income at 67 (priced at roughly 3.9%) would add around £13,000 a year before tax — a combined income near £25,500. The £138,000 pot adds around £5,400 on the same basis. Whether that's enough depends entirely on your intended lifestyle; our salary-specific guides such as pension on a £40k salary map targets to earnings, and drawdown rather than an annuity would change the income shape again.
The ceilings: annual allowance and carry forward
Two limits frame how much you can contribute:
- The annual allowance — £60,000 for 2026/27 — caps total tax-relieved contributions across all your pensions each year, including any employer money. Personal contributions are additionally capped at 100% of your relevant UK earnings.
- Carry forward lets you mop up unused annual allowance from the three previous tax years once you've filled the current year's — useful after a business sale, inheritance or big bonus. The mechanics are in our carry forward guide, and the full allowance rules in the annual allowance for 2026/27.
High earners should also watch the taper, which can shrink the allowance to as little as £10,000 above £360,000 of adjusted income.
Adjusting the rule to your real life
Half-your-age is a starting grid position, not a verdict. Push the number up or down for:
- Existing savings. The rule assumes you start from zero. A 45-year-old with £150,000 already banked needs far less than 22.5% — roughly, treat the pot's projected value at retirement as pre-paid income and fund only the gap.
- Retirement date ambitions. Retiring at 60 rather than 67 removes seven years of contributions and growth while adding seven years of spending — the required rate can nearly double. Test any early-retirement plan against real numbers, not the rule.
- Other income sources. A defined benefit pension from earlier public-sector service, rental income or a partner's provision all reduce what your personal pension must deliver.
- The State Pension itself. £12,548 a year (2026/27, full new rate) covers a meaningful slice of a modest retirement — but only with 35 qualifying NI years, so check your forecast alongside any contribution plan.
Monthly drip or annual lump sum?
Mathematically it rarely matters much; behaviourally it matters a lot. A direct debit invests through market highs and lows without requiring willpower, and most people who plan to “contribute at year end when I see how things look” contribute less than they intended. The strongest pattern combines both: a sustainable monthly baseline, plus deliberate top-ups near tax year end when your earnings picture — and any higher-rate band headroom — is clear. Self-employed savers with lumpy income lean naturally toward the second half of that pattern; see personal pensions for the self-employed for cash-flow tactics.
Practical ways to raise your number
- Escalate annually. Increase the direct debit by 1% of income each year, or each pay rise — painless and powerful over a decade.
- Bank the reclaim. Higher-rate taxpayers who reclaim relief through self-assessment can recycle the refund into next year's contributions.
- Direct windfalls. Bonuses, inheritance and freelance spikes suit lump-sum top-ups — personal pensions accept them without changing your regular plan.
- Mind the floor, not just the target. If the half-your-age number feels impossible, contribute something anyway; the table above shows even late, modest saving builds a six-figure supplement.
If you're deciding how a personal pension fits alongside a workplace scheme, see personal vs workplace pension; for the product basics start at personal pensions explained. And if your target involves catching up in your 50s, an FCA-regulated adviser can model exactly how much you'd need to save — with your real tax position rather than rules of thumb.