Saving £80 a month in your pension from the age of 20, with an employer’s matched contribution would get you about around £1000 a month in pension. That would effectively double what you get on state pension. Assuming you have a mortgage paid off, which many do, £2k a month isn’t overly shabby, and is definitely better than not having it. You may also be eligible for pension credit, and income support.
Those who say it would be impossible for most people to save in a pension because they have no spare money are being rather economical with the truth. There will absolutely be people who are on a minimum wage and might struggle to have anything to spare at all.
According to the ONS, despite the cost of living, travel remains a priority for people with less than 20% of people opting to have a cheaper U.K. holiday or going without. Annually, as a nation we spend £78.6 billion on overseas travel annually. We spend £63.75 billion on takeaway food. £27.4 billion on alcohol to drink at home and £24 billion in pubs. We spent £14 billion in pensions. We spend 12 times as much on holidays, drink and takeaway food than we do on pensions.
The problem we have in the U.K. isn’t that people can’t afford to save in a pension, it’s that it isn’t made a priority. Nobody would ever suggest you give up every nice thing in order to save for a pension, but for most people who are working an average job on an average wage, £80 quid a month isn’t not a major sacrifice, and when your employer matches your contribution it’s money for your future you are leaving on the table.
For those who are parents, the best 18th birthday gift you can give your child is to start a pension for them.