Martin Lewis says 'better retirement' for people who follow this pension 'rule'

Martin Lewis has revealed a ' rule of thumb ' he claims should help people secure a 'better retirement'. The MoneySavingExpert founder outlined it in the latest instalment of ITV's The Martin Lewis Money Show, which was broadcast last night (May 5). The finance expert presented a ' Pensions Special' episode, which he branded his "most important show" of the year. Throughout the programme, he discussed private and workplace pensions, pension 'super powers', inheritance tax and how to track down lost pensions. He also tackled questions submitted by viewers. Martin Lewis ' co-host, Jeanette Kwakye MBE, read out a question from a viewer named Daryl, who enquired about how much he should be paying into his pension, reports the Express . She said: "Daryl's asking, is there a good rule of thumb to pay into pensions, whilst I want to put more into my pension, I don't want it to impact my quality of life in the here and now. Is doing 15% contributions to someone in my mid-thirties enough?" Martin Lewis replied: "Wow, I think you're doing really well. I mean, way more than most people. Let me give you the rule of thumb that scares the pants off everybody." He proceeded to share the 'rule of thumb' for a 'better retirement'. It requires taking your age when you start your pension and halving it. That figure is the percentage of your salary you should aim to put away for the remainder of your working life (for instance, if you begin at 20, save 10%; if you begin at 40, save 20%). He explained: "Take the age when you start putting into your pension. So in your case, we'll say 30. Half it, that's 15. That's how much of your income you want going in the rest of your life for a decent retirement". Martin Lewis acknowledged that few people actually achieve this target in reality, but emphasised that beginning earlier leads to improved retirement outcomes. "Very few people ever get there," he said. The money expert went on to highlight that starting your pension savings sooner will help secure a more stable financial position upon retirement. "The real reason for using that rule of thumb is to indicate that the earlier you start, the better a retirement that you're going to have," he said. Lewis also noted that eligibility for a state pension is dependent on the National Insurance contributions individuals make throughout their working lives - entirely separate from any private pension arrangements they may hold. He added: "Of course, you'll also get the state pension depending on your National Insurance contributions, and when you retire at age 66 or 67, but tonight we're focused on private pensions." In the UK, everybody is entitled to a State Pension provided they accumulate sufficient National Insurance years through employment (which can also be earned through other means, such as childcare responsibilities, acting as a carer, or periods of illness). Currently, most people require approximately 35 qualifying years to claim the full new State Pension, which stands at £241.30 per week for a single person. The Money Saving Expert website states: "This payment is taxed as other income is and currently paid when you hit a certain age whether you still work or not. Between 2026 and 2028, this age is being gradually increased from 66 to 67, so if you're currently 65 or 66, the exact date you'll be eligible is based on your date of birth." To find out exactly when you qualify, you can use the government's State Pension age checked . A pension is a smart way to save money for retirement that helps you save on taxes. It usually includes the money you put in, what your employer adds, and some government assistance. This plan helps you build a fund to support your income in retirement, which usually begins around age 55 or 57 (starting in 2028). As mentioned by Martin Lewis, it's best to start saving for a pension as soon as you can, so you can take advantage of compound growth and get the most out of what your employer contributes.