Contributing one third of a salary to a pension can help to provide the same standard of living during retirement, one independent financial advisor has stated.
According to Adrian Lowcocks, senior investments advisor at BestInvest, saving this amount can help to provide for a comfortable living standard after ceasing work.
“The idea with a pension is to try and provide you with a standard of living you were used to during your working life,” he explained.
“Usually people suggest about two thirds of your salary would provide for the same standard of living during retirement,” he added, noting that this provides a “good guideline” of the amount needed to be saved.
Following Mr Lowcocks advice could be beneficial to those who either do not have a pension or those who do and are not contributing enough, as it may help to avoid the issues of debt or bankruptcy later in life.
According to recent research by uSwitch.com, many Britons have cut back on insurance or pension payments to help their debt management during the credit crunch.
By Tom Musk