Pension Planning · 2025/26
Pension Planning at Age 45 — UK Guide
At age 45, you have 21 years until the current UK State Pension age of 66. A common rule of thumb suggests contributing around 23% of your salary into a pension at this age, including employer contributions and tax relief.
From mid-forties onwards, the runway shortens and small contribution changes have a smaller effect on the final pot. This is the time to project your pot at 66, compare it against your target retirement income, and decide whether higher contributions, later retirement or a different drawdown strategy is needed.
Projected pot at age 66
Three illustrative scenarios assuming a constant real (inflation-adjusted) return of 5% per year on annual contributions over 21years. Real terms means today's spending power.
| Salary | Contribution | Annual | Pot at 66 |
|---|---|---|---|
| £25,000.00 | 5% | £1,250.00 | £44,649.06 |
| £50,000.00 | 10% | £5,000.00 | £178,596.26 |
| £80,000.00 | 15% | £12,000.00 | £428,631.02 |
Illustrative only. Real investment returns are not constant; past performance is not a guide. Excludes State Pension, employer contributions on top, and any existing pension pot.
Why around 23% at age 45?
A widely cited rule of thumb is to contribute roughly half your current age as a percentage of salary into a pension. This is a starting point, not a precise target — the right rate depends on your existing pot, expected retirement income, employer match, and other savings. Auto-enrolment minimums (currently 8% total, 3% employer + 5% employee) are the floor, not the ceiling.
For a basic-rate taxpayer, every £80 you contribute becomes £100 in the pension thanks to 20% tax relief. Higher-rate taxpayers can reclaim a further 20% through Self Assessment. Salary sacrifice arrangements add the saving on Class 1 National Insurance on top.