Pension saving hack boosts retirement payments by £120,000 | Personal Finance | Finance

Savers are being reminded that topping up pension contributions by three percent from the age of 36 could bolster someone’s retirement pot by £120,000.

New research from Standard Life’s forthcoming Retirement Voice report is shining new light on the average age people start preparing to retire.

Based on the organisation’s study, 36 is when the number of people saving more than the minimum pension contribution jumps by 50 percent.

Prior to this age, only 23 percent of people pay more than the minimum auto-enrolment contributions of eight of earnings into their pension.

According to Standard Life’s survey, nearly 39 percent of over 30s felt positive about their career prospects, while only 18 percent felt negative.

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As it stands, 36-year-olds today face another 32 years before they will be eligible for retirement payments from the Government.

When faced with this fact, 20 percent of those polled said they were “depressed” while 14 percent were “tired.

Due to this, experts from Standard Life believe a need for greater financial freedom is motivating people to make greater pension contributions.

Sangita Chawla, the managing director of Standard Life, outlined what is at stake for future pensioners.

She explained: “The next generation of retirees will be facing a very different situation to those currently retired, many of whom have benefitted from defined benefit pensions meaning they’ve not needed to take as much responsibility for their own retirement funds.

“With defined benefit pensions fading out, future retirees must take matters into their own hands.

“For those doing so there are a number of headwinds in the form of high housing costs, a cost of living crisis with added challenges like student tuition fees to contend with and it’s likely many will face trade-offs when it comes to meeting today’s costs versus planning for retirement.”

Despite her concerns over the future of retirement payments, the savings expert acknowledged recent positive developments.

Ms Chawla added: “It’s encouraging that the government has laid the groundwork for auto-enrolment to be extended to eighteen-year-olds as the biggest advantage younger people have on their side is time.

“For those in a position to do so, proactively topping up their contributions or making one-off payments could prove to be a valuable gift to their future selves.”