Save to top up state pension

The transition to the new flat-rate state pension from next April is complicated, but in principle the question is simple, says the Telegraph.

How much do you need to save to have the retirement income you need? assuming you get the new flat-rate pension of £8,100 a year – which will rise in line with inflation or earnings. Someone earning £50,000 a year is likely to need a retirement income of £30,000 a year, of which the OAP will provide £8,000. So they need to save enough to generate £22,000 a year – today that would require a sum of £547,500. And to reach that sum, you would need to save about 20% of your earnings every year of your working life.

Very few people are saving enough out of income to meet their retirement needs. But the tax advantages of pension plans have never been better, so topping up contributions should be a priority for most employees.