Client profile

At 35, Sarah, a marketing manager based in Manchester, enjoys a busy but comfortable lifestyle. She earns £50,000 a year, rents a stylish flat, and loves to travel—taking a couple of holidays abroad each year. Retirement feels like a distant concept, something to think about “one day.” Like many in her position, Sarah assumes that between her workplace pension and the State Pension, she’ll have enough when the time comes. But when she took a closer look with our advisers, the reality was a little different.

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The challenge: Closing the future income gap

The UK State Pension provides a valuable foundation for retirement, but it’s rarely enough to live on comfortably. As of 2025, the full State Pension is £221.20 per week, or around £11,500 per year, and to receive this amount you need 35 qualifying years of National Insurance contributions.

That may sound reassuring, but the Pensions and Lifetime Savings Association (PLSA) estimates that a “moderate” retirement lifestyle now costs around £23,300 per year for a single person. This means even with the full State Pension, there’s a shortfall of nearly £12,000 every year—and that’s before factoring in inflation and rising living costs over the next 15–20 years.

When Sarah saw this gap illustrated, she realised that relying solely on her workplace and State Pensions might not give her the freedom she imagined for her later years.

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The analysis: A good start, but not enough

Sarah is enrolled in her workplace pension scheme, contributing 5% of her salary, with her employer adding the minimum 3%. On her £50,000 income, this means £4,000 a year is going into her pension pot.

If she were to continue contributing at this rate until age 68, her projected pension pot would be around £250,000, based on average investment growth and annuity assumptions. This could provide an annual income of roughly £9,000 in retirement. Combined with the State Pension, she’d have around £20,500 per year—still below the “moderate” lifestyle benchmark, even before considering inflation.

Sarah wasn’t in a poor position—but there was clearly room to improve.

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The opportunity: The power of starting early

Our advisers showed Sarah how small adjustments could have a huge long-term impact. By increasing her pension contribution from 5% to 10% (while her employer continued contributing 3%), her total annual pension saving would rise from £4,000 to £6,500.

With time and compound growth working in her favour, her projected pension pot at 68 could grow to over £450,000. That could translate to an income of around £16,000 a year, plus the State Pension—bringing her comfortably above the “moderate” lifestyle threshold.

Sarah wouldn’t have to sacrifice her current lifestyle—just redirect a small portion of her income today to secure greater peace of mind tomorrow.

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The hidden advantage: Tax relief

We also explained how pension contributions benefit from tax relief—essentially free money from the government. As a basic rate taxpayer, for every £80 Sarah contributes, the government adds £20, turning it into £100 in her pension pot.

If she were to become a higher rate taxpayer later in her career, she could reclaim even more through her self-assessment tax return. This means every pound she invests in her pension works harder for her future, immediately and efficiently.

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The risk of waiting

If Sarah waited until age 50 to take her pension planning seriously, the situation would look very different. To build the same £450,000 pot in just 18 years, she’d need to save around £1,400 per month—a figure that would likely be unrealistic while managing everyday living expenses.

By starting early, Sarah is allowing time and compound growth to do the heavy lifting—saving less for longer and gaining more control over her financial future.

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Key takeaways for your retirement planning

• The State Pension alone won’t be enough. It’s a valuable safety net, but not a complete retirement plan.

• Start early. Small, consistent contributions can grow significantly over time.

• Increase your pension contributions. Even an extra 2–5% can make a substantial difference.

• Make the most of tax relief. It’s free money that accelerates your savings growth.

• Avoid the later-life scramble. Early planning gives you freedom, flexibility, and peace of mind.

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Your future starts today

Whether you’re like Sarah—early in your career—or feeling that you may have started a little late, now is the perfect time to take control of your retirement planning. Our advisers can help you understand your current position, project your future income, and create a strategy that ensures your retirement years are as rewarding as the ones leading up to them.