Martin Lewis has shared a "rule of thumb" to help people achieve a "better retirement" on the latest episode of ITV's The Martin Lewis Money Show. The Money Saving Expert founder described the pensions special as his "most important show" of the year.
During the programme, a viewer named Daryl asked whether contributing 15% of income to a pension in one's mid-thirties was enough. Mr Lewis replied that the viewer was "doing really well" and went on to explain a simple formula for pension saving.
The rule involves taking the age at which you start paying into a pension and dividing it by two. That figure represents the percentage of your earnings you should aim to save for the rest of your working life. For example, starting at 30 suggests saving 15%, while starting at 40 suggests saving 20%.
Mr Lewis stressed that the earlier you begin saving, the better your retirement is likely to be, though he acknowledged that "very few people ever get there" in practice. He also reminded viewers that the state pension depends on National Insurance contributions, separate from private pension arrangements.
The full new state pension is currently £241.30 per week, typically requiring 35 years of National Insurance contributions. The state pension age is set to rise from 66 to 67 gradually between 2026 and 2028, depending on date of birth.
