The big guide to pensions

Our latest guide looks at pensions, to help you understand how you can prepare for retirement (even if it seems a long way away!)

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It’s also worth knowing that compound interest means that the earlier you start saving into your pension, the more interest you should earn overall.

This is a really important point!

Because of the huge effect of compound interest it is often said that you should pay into your pension a total (between you and your employer) the % of half your age at the point you start it.

So if you were 20, you would pay in 10% of your salary (between what you pay and what your employer tops up) per year from then forwards.

However, if you started at 30 you would have to pay 15% every month to have the same effect, as you miss out on 10 years of compound interest.

Thanks for a really helpful post, there was lots of other detail you don’t often see in one place :grinning:

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Great article - is there any more detail on the £21,770 figure quoted?

The other thing that I think is an interesting way of thinking about annuities and other financial products that you can buy with your pension pot is that they are an insurance against dying old(-er than average)