A study indicates that almost three-quarters of people in the UK are worried about retirement. They worry that they won’t have enough money to do everything they want to do, but also that their money won’t last long enough to provide a comfortable retirement.
Interestingly, the research shows that over-55s are feeling the least stressed, possibly because they already have some provision for retirement.
It is the 25-34 age group feeling the most pressure. Given increasing costs, the difficulty of getting on the property ladder, and changing pension legislation, this is not surprising.
The good news is that in your 20s or 30s, you still have plenty of time to make plans. There are always other priorities, but if you get into some good financial habits now, you can still plan for a comfortable retirement.
In this guide, we look at some of the key worries of survey respondents and offer some suggestions about how to deal with them.
Paying into a Pension
Getting started with retirement planning can be the most difficult part.
Many people expressed concerns about starting a pension for the first time or deciding how much to pay in.
It’s a good idea to start a pension as early as you can. If you work for an employer, in most cases, they are legally required to enroll you on a pension scheme. This is the default option. You do have the choice to opt out, but you will be losing more than you gain.
Your employer is required to match your contributions up to a certain point, and you will also receive tax relief.
For a basic rate taxpayer, to contribute £100 to your pension, you only need to pay in £80—thanks to 20% tax relief. With employer contributions, the total value in your pension can increase further, often doubling your net contribution.
Of course, if that money is vital to your household budget, starting a pension could seem impossible. You might need to make some tricky decisions about cutting back or trying to earn more.
But if you start to think of pension contributions as another essential cost, just like your rent or mortgage, you will quickly get used to it.
Self-employed individuals do not typically receive a workplace pension. However, you can set up a personal pension – a relatively simple process that can be done online. Or, seek the help of a financial adviser to navigate this confidently and properly.
There are significant tax benefits to paying into a pension, which can boost the value of your contributions.
It’s worth contributing as much as you can into your pension in the early years, as you will benefit from 30-40 years of compound growth.
Retirement Goals
Respondents were also worried that they would not have enough money to live on in retirement or that they would run out of money.
They also wondered if they would have enough money to help their children with milestone costs such as weddings and house deposits.
In the early years, you might not have a clear retirement goal.
To start with, think about how much you would like to spend each year. Remember to factor in ad hoc costs like holidays and home improvements. Hopefully, you will no longer have mortgage repayments to consider and can remove costs such as commuting to work.
Don’t forget to account for the State Pension. It’s unlikely to be enough on its own, but it can provide a basic level of income from which to build. You can check your entitlement online to confirm if you are on track for a full State Pension.
Once you know how much income you require from your pension, multiply this by 25 to arrive at a rough idea of the total you need to save into a retirement pot.
This is not a perfect calculation, as inflation will factor in, but it’s a good place to start, and you can adjust it later. You should also add any ad hoc expenditure – such as gifts – to ensure they are accounted for.
Next, you need to work out how much to contribute to build up this pot. An investment calculator can allow you to test out different contribution levels, timescales and investment growth rates to come up with an amount that will work for you.
If you feel the required contribution is too high, consider increasing your contribution every year. Many pension schemes will allow you to do this automatically.
A small annual increase will be barely noticeable, but could provide a substantial boost to your retirement pot.
Managing Your Pensions
A common concern is whether you should have more than one pension, or whether your existing pensions are in the right place.
If you have a workplace pension, you can make extra contributions, or you can set up a separate pension to pay into in addition. Workplace schemes are often simple and low-cost, but the investment choice is usually limited.
Most people build up multiple pensions over the course of their working life. You may be able to simplify your situation, increase investment choice, and reduce costs if you consolidate your pensions with one provider.
It’s worth seeking advice in the years before retirement so that you can make sure your pensions are managed effectively. An adviser can also help you make the most of your retirement income options.
Planning for retirement can be overwhelming, particularly if you are at a life stage with other essential priorities. The key is to break the steps down, make a plan, automate as much as possible, and check in once a year to make sure everything is on track.
Please don’t hesitate to contact a member of the team if you would like to find out more about retirement planning.
The content in this article was correct on 1st July 2025
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