Projected Pot by Salary
| Salary | Annual Contributions | Pot at 68 | Annual Income (4%) |
|---|---|---|---|
| £25,000 | £2,000 | £122,645 | £4,906 |
| £30,000 | £2,400 | £147,175 | £5,887 |
| £35,000 | £2,800 | £171,704 | £6,868 |
| £40,000 | £3,200 | £196,233 | £7,849 |
| £50,000 | £4,000 | £245,291 | £9,812 |
| £60,000 | £4,800 | £294,349 | £11,774 |
| £80,000 | £6,400 | £392,465 | £15,699 |
Assumes 5% employee + 3% employer contributions, 5% real investment growth, and retirement at 68. The 4% withdrawal rate is the standard rule of thumb for sustainable retirement income.
Plus state pension: Add approximately £12,000/year (£230/week) from the full state pension on top of your private pension.
Building Your Pension at Age 40
At 40, you have approximately 27 years until State Pension age (67). With 27 years to retirement, you still have excellent growth potential. If you have not been contributing above the minimum, now is a key time to increase your pension saving. Financial advisers recommend a total contribution (employee plus employer) of 12-15% of salary for a comfortable retirement.
How Much Pension Pot Do You Need?
The PLSA (Pensions and Lifetime Savings Association) defines three retirement living standards: Minimum (approximately £14,400/year for a single person), Moderate (approximately £31,300/year), and Comfortable (approximately £43,100/year). After deducting the full State Pension (£11,502/year), a moderate lifestyle requires approximately £19,800/year from your private pension. Using the 4% drawdown rule, this requires a pot of approximately £495,000. A comfortable lifestyle requires approximately £31,600/year from private pension, needing a pot of approximately £790,000. See retirement calculator for personalised projections.