Saving and investing for retirement

Published on: March 27, 2024

A comfortable retirement is something that most aspire to.

A foundation of retirement is the State Pension. The subject of much discussion and controversy; the history of an “Old Age” pension in the UK goes back to 1909. This paid a princely sum of 5 shillings per week (or 7 shillings and sixpence for a married couple).

The current New State Pension was introduced in 2016 and aimed to simplify an increasingly complicated system.

From the new 2024/2025 tax year, it will pay £221.20 per week having benefitted from an increase of 8.5% due to the “Triple Lock”.

This totals slightly over £11,500 per year.

Those with 35 full years of National Insurance credits are entitled to this full amount.

Is this enough for a “comfortable” retirement?

The Pensions and Lifetime Savings Association’s (PLSA) Retirement Living Standards are produced annually. They propose three living standards for retiree and the incomes needed to meet these: Minimum, Moderate and Comfortable.

Single Person£14,400£31,300£43,100

The New State Pension goes most of the way for the Minimum standard.

However, the State Pension age is subject to periodic increases. It is currently 66 but will gradually start increasing from May 2026. You can check you State Pension age at Check your State Pension age – GOV.UK (

Some experts, however, have recently suggested that it may have to rise to 71 for those currently middle aged – leading to much debate!

Complimenting the New State Pension is a key area that many focus on, to increase their available income in retirement.

Private pensions and ISAs are often the go to with both offering tax efficiency. With funds in one or both wrappers, they can be invested in a variety of asset types in the expectation of long term growth.

Taking the long view is certainly the case here as this will give your funds the opportunity to weather any poor markets and give you healthy long term returns.

How much to invest into a private pension or ISA is a question with many factors – the most important perhaps being your target income or current affordability.  The power of compounding can be remarkable!

A woman who celebrated their 40th birthday in the past few months will reach state pension age in 1952 at the age of 68.

They have 28 years before they see a penny of State Pension!

They are in a rather morbid mood so go to How long will my pension need to last? and find out their life expectancy is 89. They have 21 years of living (partying?) from receiving their State Pension.

If they have no savings, investments or other pensions, how much do they need to put away every year to meet the PLSA standards assuming a return of 5.5% per annum?


They don’t need to put as much into their pension because the tax relief available increases the total amount. The above assumes they get basic tax relief only – so the relief may be even higher if they were a higher rate taxpayer.

Let’s see how these numbers change if this person started 5 years previously.


What a difference five years makes!  

In fact, the above figures would change depending on a variety of factors, they are certainly not “guaranteed” by any means but our goal is to give you an idea of the power of compounding interest…as well as consistency!

Contributions can come in a variety of ways:

  • Automatic enrolment in workplace pensions, combined with employer contributions
  • Director pension contributions from a limited company
  • Personal contributions to private pensions and ISAs
  • And so on!

It’s essential to recognise that the funds needed for a comfortable pension may vary depending on individual circumstances, such as lifestyle preferences, health, and desired retirement age. Flexibility and adaptability are key principles in navigating the complexities of retirement planning.

There is no single right way of doing this. Everyone’s situation is different…

Which is where seeking advice from a financial planner comes in.

While the journey towards a comfortable pension in the UK may seem daunting, the guidance provided by organisations like the PLSA offers invaluable support in setting realistic savings targets and crafting effective retirement strategies. By taking proactive steps and leveraging available resources, individuals can work towards achieving financial security and enjoying a fulfilling retirement lifestyle.

A financial planner, such as those, found at Chartered Financial Planning firm, Three Counties work with people from all walks of life. Your financial plan is tailored for your needs and goals.


This article does not constitute financial advice so before acting upon it, the reader should always take the appropriate financial advice.

Sources used:

State pension reform (

Proposed benefit and pension rates 2024 to 2025 – GOV.UK (

Home – PLSA – Retirement Living Standards

UK state pension age will soon need to rise to 71, say experts | Retirement age | The Guardian

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