Martin Lewis shared a general rule of thumb for how to tell if paying into a pension is worth it.
The Money Saving Expert founder appeared on his ITV show, The Martin Lewis Money Show Live, on Tuesday night for a one off pension special. He was joined by experts to answer viewer's questions about private and state pension schemes.
One person wrote into the show asking if a pension was really worth it. They said they are currently 27-years-old and put away £300 into their pension each month but feels like they will never retire as the age keeps rising.
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In response, Martin said: "The statistical likelihood is most people will need a substantial amount of time in their later lives when they are not working and you will want to have as good a lifestyle as you possibly can then. But you're going to have to pay for it when you're working.
"The earlier you start the better. There's an old rule of thumb and it scares everyone so don't take it too seriously but it's a good example."
He asked a man in the audience his age and found out that he was 27. Martin said: "So you're 27. Can you halve 27 for me?" The man replied: "Its 13 and a half."
The consumer champion said: "Perfect. So if you haven't started your pension yet and you started now you would want to put in 13.5% of your salary for the rest of your life to have a good retirement. That includes the employers contribution, no one ever gets near this but the real reason to point that out is age."
Expanding on the examples, he said that someone of the age of 60 would need to put in 30% of their salary - essentially whatever your age is you should be putting half of that number into your pension as a percentage.
Martin ended his response to the viewer's question as he said: "Yes a pension is worth it and yes it is tough to do in the middle of a cost of living crisis. You have to balance those two things out."
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