Savings By Age: Can You Hit The Milestones by 30, 40, 50 and 60?

In personal finance, getting your bearings matters. Age‑based savings benchmarks give you a rough map of where you might be on the road to retirement. Sites such as Fidelity International say 30‑somethings should have a pot worth roughly one year’s salary and recommend building this up to two times salary by age 40, four times by age 50 and six times by 60.

These rules of thumb make for neat headlines, but they often ignore the messy reality of stagnant wages, housing costs and family commitments.

My own PensionAge app takes a slightly different tack: instead of expecting millennials to be sitting on a year’s income by 30, it suggests you aim for half your annual salary by age 30, a full year’s salary by 35 and around two times salary by 40.

After that the multiples tick up: three times salary by 45, four times by 50, five by 55, six by 60 and eight times salary by retirement at 66.

These targets are deliberately more conservative than Fidelity’s because they recognise that few thirty‑somethings in Britain have finished paying off student loans, let alone built up six‑figure pension pots.

Where do the numbers come from?

The idea behind salary multiples is that you maintain your standard of living after retiring. If you earn £50,000 a year and want to replicate that lifestyle, then Fidelity reckons you need a pot of roughly £1 million to produce £50,000 a year in retirement income; to get there you should have £100,000 saved by 40 and £240,000 by 50.

The calculations assume a 5 per cent annual return and regular increases in contributions.

PensionAge uses similar assumptions but pairs them with the Pensions and Lifetime Savings Association’s (PLSA) Retirement Living Standards, which estimate that a single person needs about £13,400 a year for a minimum retirement, £31,700 for a moderate lifestyle and £43,900 for a comfortable life.

The app’s eight‑times‑salary target by retirement is designed to deliver at least a moderate lifestyle for most earners when combined with the state pension.

Reality check: What Britons Actually Have

A glance at the data shows why hitting these benchmarks is tough. The latest government figures compiled by PensionBee show that the median pension pot for 25‑34‑year‑olds in the UK is just £9,500. For 35‑44‑year‑olds the median is £30,600, rising to £81,200 for the 45‑54 bracket and £189,700 for 55‑64‑year‑olds.

These totals include people who have any pension at all – millions have nothing. Another survey by Unbiased found that the average savings (not just pensions) by age 30 should be about £51,434 or roughly one year’s income, but the median person in that age group actually holds around £9,357 in saving. By 40 the suggested benchmark climbs to three times your salary (about £124,911), while many households struggle to get beyond five figures.

By 50, Unbiased argues you should have six times your pre‑retirement income, roughly £198,390, and by 60 it jumps to eight times or roughly £270,100.

These numbers highlight a yawning gap between rule‑of‑thumb targets and the real world. Even those who save diligently often fall short because investment returns vary and incomes don’t rise steadily.

As Merryn Somerset Webb noted in 2017, financial pundits who tell 20‑somethings to amass multiples of their salary are repeating “standard financial industry stuff” that often seems arbitrary.

Compound interest is powerful, but it can’t magic up a large pot if your wages barely keep pace with inflation. The median pension pot for women in their 60s is still only £51,100, compared with £156,500 for men, reflecting persistent pay and career gaps.

How to Use The Benchmarks Sensibly

Rules of thumb are useful signposts, not commandments. The PensionAge benchmarks try to balance ambition with realism: aiming for half a year’s salary saved by 30 and a full year by 35 feels less intimidating than Fidelity’s 1x at 30, but it still encourages early saving.

The jump to eight times salary by retirement might sound daunting, but remember it doesn’t all need to come from your private pension. The UK’s full state pension is worth about £11,973 per year (2025/26), which counts towards the income targets. Having other assets, such as ISAs or property, also reduces the burden on your pension pot.

For those behind the curve, focus on what you can control:

1. Increase contributions when you get pay rises. Workplace pensions now enrol most employees automatically; upping your contribution beyond the minimum can boost your pot without drastic lifestyle changes. PensionBee’s data show that only about 58 % of UK adults were actively contributing to a private pension in 2020/21; so simply staying in the scheme already puts you ahead of many.
   

2. Make time your ally. Starting early allows compound interest to do the heavy lifting. Even small monthly savings add up over decades. If you’re starting later, increasing contributions and delaying retirement can still make a big difference.
   

3. Use tax breaks. Pension contributions receive tax relief and many employers match part of your contributions. Squeezing money into a pension can be more efficient than saving in a bank account.
   

4. Diversify. PensionAge assumes a 5 % annual return. That’s plausible if you hold a diversified portfolio of equities and bonds. Avoid chasing hot stocks; boring index funds often deliver better risk‑adjusted returns.
   

5. Check your progress. Use calculators and apps to see whether you’re on track and adjust accordingly. Tools like PensionAge and the PLSA living‑standards calculator help translate abstract numbers into real‑world spending power.

Final thoughts

It’s tempting to treat age‑based savings multiples as gospel. In truth they’re blunt instruments. But they can light a fire under complacent savers and provide a rough yardstick for those who feel lost.

My PensionAge app is designed to offer a gentler ramp for younger savers while still pushing for a meaningful nest egg by retirement.

If you’re ahead of the benchmarks, congratulations- don’t get complacent. If you’re behind, don’t despair. Everyone’s financial journey is different, but the sooner you start, the more options you will have when work is no longer compulsory.

Sources

• Fidelity International – fidelity.co.uk

• Pensions and Lifetime Savings Association (PLSA) – retirementlivingstandards.org.uk

• PensionBee – pensionbee.com

• Unbiased – unbiased.co.uk

• Statement by Merryn Somerset Webb – theguardian.com

• UK Government / State Pension figures – gov.uk or referenced via PLSA

Disclaimer

This blog is for information only and is not financial advice. The savings targets and projections shown are based on general assumptions and may not reflect your personal circumstances. Investments can go down as well as up, and tax rules may change. You should seek regulated financial advice before making any pension or investment decisions. The PensionAge app is a guidance tool and does not guarantee retirement outcomes. Alpesh Patel OBE www.campaignforamillion.com