Five tips to make sure your finances are on track for retirement

People need to take control of their retirement planning as early as possible if they want to make sure they have more than just the bare minimum to live on in their later years, experts have said.

Against the backdrop of a rising state pension age, here are five tips from Tom Selby, a senior analyst at AJ Bell, for ensuring you are saving adequately into private pensions such as workplace schemes:

1. The earlier you start, the easier it will be

One of the keys to retirement saving is starting as early as you can and making the most of the tax perks available.

As a very rough rule of thumb, aim to contribute about half the age when you first start saving for retirement as a percentage of your salary.

For example, if you start at age 30 aim to save 15% of salary, while if you start at 40 the target should be 20%. Do not be put off if these seem unachievable though – any pension contribution you are able to make will be a good long-term investment.

2. Do not miss out on free money

If you are employed, make sure you stay in your workplace scheme if you can afford to. At least your first 3% of contributions will be matched by your employer, and your fund also gets a boost via pension tax relief.

3. Take responsibility for your retirement

Automatic enrolment combined with the state pension will not deliver a comfortable retirement for most people, and the state pension age is rising.

You therefore need to take responsibility and save more for yourself if you can afford to.

4. Keep an eye on your costs

Even tiny differences in the charges you pay can add up to tens of thousands of pounds less in retirement, so making sure you keep these as low as possible will make a real difference over the long-term.

5. Harness the power of long-term investing

Because retirement savers can think in terms of decades, they have the capacity to take investment risk and harness the power of long-term stock market growth.

However, you should only take risks you are comfortable with and be aware that investments can go down as well as up, particularly in the short-term.