Pension savers are being encouraged to review their retirement pots, as a relatively small change to contributions could make a "significant" difference to retirement prospects. Financial experts are urging people to act sooner rather than later, citing a "growing gap" between the age at which people want to retire and the age at which they can actually afford to.
The Standard Life Centre for the Future of Retirement is calling on workers to consider increasing their pension contributions, noting that even a small rise in payments can have a substantial impact over time.
Modest increase, significant gain
Centre director Catherine Foot said: "Finding extra money to save can be difficult, particularly when household budgets are under pressure, but even relatively modest increases in pension contributions can build into something significant over a working life."
The group shared calculations illustrating the impact of increasing contributions by £100 a month. A worker earning £30,000, paying the auto-enrolment standard minimum of 5 percent with a 3 percent employer contribution, would build a pension pot worth £252,000 by age 68, based on paying in from age 22 and contributions rising by 2 percent each year.
However, if the same worker paid in an extra £100 a year, the pot would grow to £346,000, providing an additional £94,000 for retirement.
Advice for building pension savings
Ms Foot encouraged people to prioritise pension payments, explaining: "The earlier additional contributions are made, the longer they have to benefit from potential investment growth, so increasing what you save when you can could make a meaningful difference to your options later in life."
She also shared other steps worth considering to help build pension savings, including reviewing how much has been saved to date, thinking about consolidating pension pots, and using a pay rise or bonus to top up contributions where possible.
Retirement expectations and state pension age
A recent survey for the centre's Retirement Voice 2026 report found that people want to retire on average by age 62.3, yet expect to do so at 67.6, more than five years later.
Ms Foot said people are clearly feeling the squeeze with rising costs. She said: "The growing gap between when people want to retire and when they think they actually will is a clear sign of the pressure many households are feeling. People still aspire to retire at around 62, but now expect to work until almost 68, leaving more than five years between the retirement they want and the one they think they can afford."
Another factor to consider when setting a retirement date is the rising state pension age. The state pension age is increasing between April 2026 and April 2028, moving gradually from 66 to 67. Laws are also in place for a further increase, from 67 to 68, between April 2044 and April 2046, and there has been discussion of bringing this timetable forward. The Government is currently carrying out another review of the state pension age, due to be completed in 2029.
