The quick answer
A widely used starting rule: take the age you start saving, halve it, and pay that percentage of your salary into your pension for the rest of your career — including employer contributions. Start at 24 and 12% does the job; leave it until 40 and the target is 20%. It's a rule of thumb, not a law, but it captures the truth that pounds saved early are worth several times pounds saved late.
The auto-enrolment minimum — 8% of qualifying earnings — is a floor, not a target. For most people it will not fund the retirement they're imagining on its own.
Start from what retirement costs
Rather than saving blind, aim at a target lifestyle. Industry research (the PLSA's Retirement Living Standards) describes three levels — a minimum lifestyle covering needs with a little left over, a moderate one with more security and flexibility, and a comfortable one with more luxuries. Each maps to an annual income; your pension needs to bridge the gap between the State Pension and the level you want, for potentially 25–30 years. Our guide to saving for retirement covers the mechanics.
Why starting early beats saving hard later
Compounding does most of the work in a pension. Money invested at 25 has 40 years to grow; the same money at 50 has fifteen. In practice that means a 25-year-old saving a modest percentage steadily typically ends up ahead of a 45-year-old saving twice as hard. If you're starting late, the levers are: raise contributions, use carry-forward of up to three years' unused annual allowance, push back retirement a little, and check your investment mix isn't too cautious for the time you have.
Take the free money first
Two multipliers make pension saving unusually efficient. Employer contributions: if your employer matches above the minimum, every extra 1% you contribute may be doubled — always take the full match before saving anywhere else. Tax relief: contributions receive relief at your marginal rate, so £100 in a pension costs a basic-rate taxpayer £80 and a higher-rate taxpayer £60. The self-employed get the same relief — see best pensions for the self-employed.
How to check you're on track
Three numbers tell you most of it: your projected pot at retirement (on your annual statements), the annual income that pot could sustainably support, and your State Pension forecast at gov.uk. Combine old pots when it makes sense (how to consolidate safely) and repeat the check every year or two — small course-corrections early beat big ones late.
When advice pays for itself
DIY works for straightforward accumulation, but advice earns its keep at decision points: consolidating with guarantees involved, retiring and choosing between drawdown and annuities, or catching up late with large sums. Find a pension adviser through Nesto — free matching, no obligation.