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Take the 1% challenge today

Financial Wellness

They say it’s the little things that count. And that's certainly true when it comes to saving for retirement.  Taking the small step of putting an extra 1% of your monthly salary into your workplace pension each month, can supercharge your savings now and boost your pension pot for retirement.

Supercharge your savings

Want to see how much of an impact a 1% increase in savings can make for you? Use our power of small amounts tool to see how a small change can make a big difference.

Because it’s a small amount, finding the extra money doesn’t have to mean big sacrifices and as you are already saving into your workplace pension, you probably won’t even notice the extra 1% going out of your salary.

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Source: Fidelity as at December 2021

Start small and watch it grow

While 1% is a small percentage of your annual earnings, after 20 or 30 years it can make a significant difference to how much you have in your pension.

Because, when it comes to saving, the longer you can contribute the longer your savings have to grow. Time is a powerful tool and continuous contributions can grow to a sizeable sum thanks to the benefits of compounding.

Compound growth is so powerful that even a small sum, given many years to grow, will outpace larger sums of money invested years later. The sooner you get that money working for you, the better.

Check if you are on track

Our research shows that aiming to save 13% of your household income towards retirement annually — which includes any matching contributions an employer may make to a workplace pension — can help ensure that you can maintain your lifestyle in retirement.

See whether you’re on track and explore our Retirement Savings Guidelines.

Ready to take it up a level?

Of course, 1% is just a start. The trick is to save as much as you can afford now and try to increase your savings every year to ensure you’re best placed to enjoy your retirement. Whether it's 1%, 3% or 5% extra, the additional money saved today could make a big difference when it comes to helping you achieve the retirement you want.

To change your regular contributions, speak to your employer or usual pension contact. To make a one off contribution contact us on 0800 3 68 68 68. Lines are open Monday to Friday, 8am to 6pm

Find out more about Fidelity's Workplace Workout - the fitness regime for your finances.

About our assumptions

The minimum age for using this tool is 18 years old.

In this forecast we estimate how much an increase in your retirement savings may add up to over time, based on the following assumptions:

You will increase your retirement savings in line with what you have selected in the tool (between 1% and 5% of your gross salary). This additional contribution is invested monthly, at the end of each month, from now until you reach retirement at age 68.

Your salary will grow at 3.75% each year (in line with a reasonable expectation for average salary growth), and therefore that your additional contribution will also increase at this same rate.

Your assets will grow at 5% each year. This is a very simplistic assumption that takes no account of the variability of investment returns (which can be either positive or negative) - but it is roughly in line with our expectation of the average long term return on a mixed portfolio of assets. More specifically, this figure is our estimate for the ‘median’ yearly return on a portfolio invested 70% in global equities and 30% in global bonds; ‘median’ means the rate of the return that you can expect to beat about half the time.

Please note that this does not take into account your actual investments or how they may behave.

We then estimate the value of what you have saved by age 68, including the total of your contributions and any growth on them.

We express this value in “nominal” terms, which means without taking into account the effect of inflation. Inflation means that the value of each pound you have is less in the future than it is today; although the forecast does not directly show the impact of inflation, we believe that it is a good idea to consider the impact it could have on the value of your money. We believe that a reasonable long term assumption for inflation is around 2% each year. This means that for every year, each pound you have is worth 2% less. In some cases, this could mean that, even if your investment grows over time, the value of what you can buy with it becomes less.

We do not take any tax into account in this tool, and we are not assuming that you use any particular savings vehicle or product.

Please note that this tool is not a personal recommendation - it is only designed to illustrate how savings might build up over time. If you need additional help, please speak to an authorised financial adviser. You should regularly reassess the suitability of your investments to ensure they continue to meet your attitude to risk and investment goals. The value of investments can go down as well as up so you may get back less than you invest.

Ready to make a change?

To change your regular contributions, speak to your employer or usual pension contact. To make a one off contribution contact us on 0800 3 68 68 68.

Lines are open Monday to Friday, 8am to 6pm

Read more from Workplace Workout

Important information

Eligibility to invest into a pension and the value of tax savings depends on personal circumstances and all tax rules may change. You will not normally be able to access money held in a pension until the age of 55.

The value of investments and the income from them can go down as well as up, so you may not get back what you invest. This information does not constitute investment advice and should not be used as the basis for any investment decision nor should it be treated as a recommendation for any investment or action. You should regularly review your investment objectives and choices and if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser.