Pension warning as ‘little known mistake’ may be costing you £13,000 in retirement | Personal Finance | Finance

Many people do not know that this should be the first step of retirement planning, and not knowing can be costly later down the line.

Mr Byrnes continued: “In terms of ‘how much is enough’, there is a good rule of thumb to use; most people will need about 25 times their retirement expenditure as a pension pot.

“So if you plan to spend £15,000 a year, you will likely need a pension pot of £375,000 to provide that income. Try not to be daunted by the big numbers.

“A big advantage of planning for retirement early is that your efforts are boosted by tax relief and employer contributions. It’s essentially free money that rewards your efforts, no matter how small, and this coupled with consistent habits, little and often, add up to big results over a career.

“Contribute at least 10 percent of your pay cheque, get your employer to match as much of your contribution as possible, and take advantage of tax relief and tax-free growth. Over 30 years these all can have a big impact!”