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How much should you save for retirement?

People often find saving for retirement off-putting – or even futile – because they can’t envisage ever succeeding in building up sufficient funds. This isn’t helped by the media’s relentless focus on the nation’s lack of preparedness and how this can only result in a great number of us living out our twilight years in poverty.

People often overlook – or underestimate – what a strong ally compounding is when you are saving for something in the future. Compounding refers to the snowballing effect that happens over time as your earnings generate more earnings. Even if you start off by investing a modest sum, under the influence of compounding, you are likely to see your savings grow quite substantially over the long term. Our graph helps illustrate this.

The impact of compounding over the long term

Of course, the earlier you start the better when it comes to reaping the full benefits of compounding but you should never consider it too late to start saving for retirement.


Past performance is not a reliable indicator of future returns

The value of your investment can go down as well as up, and you can get back less than you originally invested.

The Bestinvest Online Investment Service, including any account analysis and investment reports provided by our guidance services, is an online execution-only dealing service for investors who want to make their own investment decisions. It does not provide advice on the suitability of products and investments; if you are unsure about the suitability of any investment you should seek professional advice. Clients of our Investment Advisory Service and Managed Portfolio Service can use the website to obtain current valuations of their investments but cannot trade on these accounts online and should call their adviser if they wish to discuss changes to their investments.

Past performance or any yields quoted should not be considered reliable indicators of future returns. Restricted advice can be provided as part of other services offered by Bestinvest, upon request and on a fee basis. Before investing in funds please check the specific risk factors on the key features document or refer to our risk warning notice as some funds can be high risk or complex; they may also have risks relating to the geographical area, industry sector and/or underlying assets in which they invest. Prevailing tax rates and relief are dependent on your individual circumstances and are subject to change.

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© Tilney Bestinvest Group Ltd 2016.

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