How much should I pay into my pension?
There is no single correct answer, but there are useful benchmarks — the statutory minimum, a widely-used rule of thumb, and the maths for catching up if starting late.
- ▸The auto-enrolment minimum is 8% of qualifying earnings (5% employee, 3% employer). For most people, this is not enough for a comfortable retirement.
- ▸A common rule of thumb: contribute half your age as a percentage of salary. Start at 25, contribute 12.5%. Start at 35, contribute 17.5%.
- ▸Starting at 25 with 12% contributions and 5% growth produces a pot roughly four times larger than starting at 40 with 20% contributions — compound growth does most of the work.
- ▸Some employers increase their payments when you contribute more. Check the matching terms: extra employer contributions increase the amount invested, but are not a guaranteed investment return.
The minimum (auto-enrolment at 8%)
Since 2019, the auto-enrolment minimum has been 8% of qualifying earnings, split between employee (5%) and employer (3%). Qualifying earnings for 2026/27 are the band between £6,240 and £50,270 — so the contributions are calculated on a narrower base than total salary.
For someone earning £30,000:
- Qualifying earnings: £30,000 - £6,240 = £23,760
- Total minimum contribution: 8% x £23,760 = £1,900.80 per year
- Of which employee pays: £1,188 (5%)
- Of which employer pays: £712.80 (3%)
This is a minimum contribution, not a personal retirement target. The 2026 moderate Retirement Living Standard is £32,700 a year of spending after tax for one person outside London, excluding rent and mortgage payments. Compare projected income after tax and in today's money with your own spending needs. See the living standards guide for the assumptions.
The retirement need calculator estimates the pot size needed for different income targets.
The rule of thumb: half your age as a %
The most commonly cited heuristic is to take the age at which pension saving begins and halve it. That number becomes the total percentage of pre-tax salary (employee plus employer) to contribute throughout working life.
- Start at 20: contribute 10%
- Start at 25: contribute 12.5%
- Start at 30: contribute 15%
- Start at 35: contribute 17.5%
- Start at 40: contribute 20%
This rule is attributed to various sources and has no rigorous mathematical derivation. It is a rough approximation that assumes retirement at 67–68, a pension invested in equities, and a target retirement income of roughly half to two-thirds of working salary.
Its main virtue is simplicity. Its main weakness is that it does not account for existing pots, state pension entitlement, or other assets. But as a starting point for someone who has no idea what to contribute, it is more useful than the 8% minimum.
Starting late: the catch-up arithmetic
The penalty for starting late is not linear — it is exponential, because the late starter misses the most powerful years of compound growth.
Consider two scenarios, both assuming 5% annual growth and retirement at 67:
Person A: Starts at 25, contributes £300/month for 42 years
- Total contributions: £151,200
- Pot at 67: approximately £520,000
Person B: Starts at 40, contributes £600/month for 27 years
- Total contributions: £194,400
- Pot at 67: approximately £390,000
Person B contributes 29% more in total cash, but ends up with 25% less. The missing 15 years of growth cannot be replaced by doubling the contribution. The pension growth calculator models this for any starting age and contribution level.
This does not mean starting late is futile — it means the required savings rate is higher, and expectations may need adjusting. A 45-year-old starting from zero faces a steeper path than a 25-year-old, but even late contributions benefit from tax relief and employer matching.
How employer matching works
Some employers pay more into your pension when you increase your own contribution. For example, a pound-for-pound match on an eligible £100 employee contribution adds £100 from the employer, making £200 paid into the pension before investment returns or charges. That doubles this contribution, not the future value of the investment. Your take-home cost also depends on tax relief.
Matching rates, salary definitions and maximum employer payments differ between schemes. If an employer matches up to 6% of pensionable pay, the extra employer payment stops increasing at that limit. Your scheme or payroll team can explain the terms and what a change would cost you.
Employer payments are one part of the decision alongside affordability, access to the money, fees and other benefits. See GOV.UK's workplace contribution guidance. The salary sacrifice calculator explores a separate question: how exchanging salary for an employer pension contribution can affect tax and National Insurance.
- ▸The auto-enrolment minimum total contribution is 8% of qualifying earnings (employee 5%, employer 3%). Qualifying earnings for 2026/27 are between £6,240 and £50,270. [The Pensions Regulator]
- ▸The 2026 moderate Retirement Living Standard is £32,700 annual spending after tax for one person outside London, excluding rent and mortgage payments. [PLSA]
- ▸A £300/month contribution starting at age 25 with 5% annual growth produces a pot of approximately £520,000 by age 67 — roughly £370,000 of which is investment growth rather than contributions. [Pension Bible calculation]
This is factual information, not financial advice. If you're unsure what's right for your situation, speak to an FCA-regulated financial adviser.
Compare a contribution target
The pension growth and contribution calculator can solve the total monthly amount credited for a chosen pot target. It distinguishes future pounds from today’s purchasing power and lets you identify the employer’s part of the current contribution. The result is conditional arithmetic, not an assessment of affordability or the right amount for you.