Ask the expert: Can I build a £1m pension by 60?
Fidelity personal financial specialist Marianna Hunt is back on hand to answer your burning questions, and today a reader wants to know how to achieve a £1m pension pot. Q. I’m 32 and earn £50,000 per year. I only have about £55,000 in my pension currently and want to grow that to £1m by age [...]
Marianna Hunt, a Fidelity personal financial specialist, addresses a reader's inquiry about building a £1m pension pot by the age of 60. With a current pension balance of £55,000 and an annual income of £50,000, the reader wants to know the steps to achieve this goal. Hunt explains that consistently contributing approximately 13% of their salary to their pension each year could help them reach the £1m target, assuming an average annual investment return of 6.61%, inflation of 2.5% and an employer contribution of at least 3%.
These numbers are estimates and do not account for market fluctuations or major expenses in later life, such as care costs. Hunt emphasizes that the £1m figure's significance depends on the reader's desired retirement lifestyle and stresses the importance of considering personal needs when planning for retirement. She also points out that a £1m pension alone does not guarantee financial security in retirement, as life expectancy has increased and there is a risk of outliving savings.
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