Martin Lewis' MSE explains 'rule of thumb' for pension contributions

Martin Lewis’s Money Saving Expert has shared one pension tip for a comfortable retirement. The BBC and ITV star's Money Saving Expert described the savings tip as a "rule of thumb" as we head through winter towards Christmas.

MSE wrote on its website: “There's a rule of thumb for what to contribute for a comfortable retirement. Take the age you start a pension and halve it. Then aim to put this % of your pre-tax salary into your pension each year until you retire.”

They added: “Almost nobody reaches this amount, but the real takeaway is start as early as possible with whatever you can, as you've longer for the gains to compound.” MSE gave the example of someone starting aged 32 should contribute 16% of their salary for the rest of their working life.

READ MORE UK set for new snow bomb which will 'explode' this weekend with 9 inches dumped

"Don't worry, almost nobody reaches this amount, but the real takeaway is start as early as possible with whatever you can, as you've longer for the gains to compound," MSE went on to explain in an update on its website.

Data from Opinium on behalf of Hargreaves Lansdown has found that one in five people don’t know how much is going into their pension. A further 19% don’t know much they and their employer is contributing to their pension.

This rises to one-third (33%) of people aged over 55. This compares to 10% of people aged between 18-34. People were most likely to say somewhere between £201 and £300 was contributed to their pension every month (15%) whilst 3% said it was more than £2,000 per month.

Meanwhile 18% of basic rate taxpayers had no idea. This compares to just 7% of those paying at the higher rate. Helen Morrissey, Head of Retirement Analysis at Hargreaves Lansdown said “Planning for retirement is one of the most important things you can do and yet one in five people have no idea how much they are contributing to their pension.

"It actually gets worse the older we get with one-third of people aged over 55 having no clue about what they and their employer are putting in. If you don’t know what’s going in then you won’t know what you are going to get out of your pension and so we risk people sleepwalking into retirement with nowhere near enough to meet their needs."