DON'T BE LATE ON PENSIONS

If you don’t start sorting out your pension until you are 40 you will be left seriously strapped for cash.

With the basic state pension paying out less than £5,000 a year, it makes sense to have some private provision when you reach 65.

The best schemes give you two thirds of your annual salary.

But to get that, someone on the national average salary of £26,000 would have to put away at least 33% of their monthly wage – more than £725 – made up of employee and employer contributions if they delayed starting their pension until they were 40.

Someone starting at 30, however, would need put away just 20.5% of their wages. But that’s still a crippling £443 every month.

An 18-year-old needs to find a much more modest £280 a month.

Martyn Bogira, of Prudential, said: “Anyone earning an income should try to begin putting money into a pension as soon as possible, as the cost of delay is considerable.

“For someone aged 40 who’s just starting a pension, the optimum contributions are three times higher than someone aged 18.

“With the basic state pension currently paying out less than £5,000, it is critical that people stop thinking they will be able to rely solely on the state to look after them in their retirement.”

» MORE 'CASHPOINT' HERE...

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