A widely used benchmark is to put 10–15% of your gross income towards long-term investing and pensions, rising to 20% or more for higher earners or later starters. There’s no universal figure: it depends on your age, goals and other saving. The key is to start early and raise the percentage over time.
The short answer
- A common benchmark is 10–15% of gross income towards investing and pensions combined.
- The 50/30/20 rule’s 20% covers all saving and debt repayment, not pure investing.
- The later you start, the higher the percentage you need, halving your starting age is a rough guide.
Thinking in percentages rather than fixed sums is a smart move, because a percentage scales automatically as your income changes and keeps your saving in proportion to your lifestyle. But there is no single figure that fits everyone: the right share of your income depends on your age, your goals and how much you already have set aside. Our guide to getting started sets the scene; here is how to think about the number.
The 10–15% benchmark
A commonly cited target is to direct 10% to 15% of your gross income towards long-term investing and pensions combined. For someone who starts in their twenties and keeps it up, that range is usually enough to build a comfortable retirement pot alongside other goals. Importantly, your pension contributions count towards this figure, for many employees, auto-enrolment already provides a meaningful slice, and topping it up is often the most tax-efficient way to hit your target.
You may also have come across the 50/30/20 budgeting rule, which suggests spending 50% of take-home pay on needs, 30% on wants and 20% on saving and debt repayment. It is a helpful frame, but note that the 20% covers all saving, building your emergency fund and clearing debt included, not pure investing. Once those foundations are in place, more of that 20% can flow into long-term investments.
Why your age changes the answer
The single biggest variable is when you start. Because returns compound over time, someone who begins in their twenties can reach the same destination with a much lower percentage than someone starting in their forties or fifties. A rough guide often used for pensions is to take the age you begin saving seriously and halve it: that is the percentage of income to aim at across your working life. Start at 30 and around 15% is a reasonable target; start at 40 and you may need to push towards 20% or more to catch up.
A rough guide to how much to invest by starting age
| Age you start | Suggested share of income | Why |
|---|---|---|
| 20s | 10–12% | Decades of compounding do much of the work |
| 30s | 12–15% | Still a long runway, but less time to compound |
| 40s | 15–20% | Catching up requires a bigger commitment |
| 50s | 20%+ | A short horizon means higher contributions |
These are guides, not guarantees: your own figure depends on the pension you already hold, the lifestyle you want and any other assets. Higher earners often aim well above 15%, partly because they can afford to and partly to make full use of valuable pension tax relief; the annual allowance lets most people contribute up to £60,000 a year across all pensions with tax relief. If you are a higher-rate taxpayer, the effective cost of investing through a pension is lower still.
Where the percentage goes matters too
The share of income you invest is only half the story; the wrapper you invest it through decides how much of your return you keep. For most people the efficient order is to first secure any employer pension match, then use pension tax relief, then fill your ISA allowance of £20,000 a year, before anything spills into a taxable general investment account. Two people investing the same 12% can end up in very different places purely because one sheltered the growth from tax and the other did not.
It also helps to think of the percentage as a total across accounts rather than a single direct debit. Your workplace pension, a personal pension top-up and a monthly ISA payment all count towards the same target, so before deciding you cannot afford 12% or 15%, add up what is already leaving your pay for the pension. Many people are closer to the benchmark than they assume once auto-enrolment is included.
Start where you are, then ratchet up
If the recommended percentage looks daunting, do not let perfect be the enemy of good. Begin with whatever you can sustain, even 5%, and commit to raising it by a percentage point or two each year, or to sending every future pay rise straight into your investments before you get used to spending it. This ‘save more tomorrow’ approach sidesteps the pain of a sudden cut to your take-home pay while steadily lifting your rate towards a healthy level.
The percentage you choose is ultimately a statement about the balance between your life today and your life in twenty or thirty years. There is no prize for austerity, only for consistency. If you would like an independent view on the right split for your circumstances, our free service can match you with an FCA-regulated, vetted adviser. This is information, not personal advice, and investments can fall as well as rise.
In summary
- A common benchmark is 10–15% of gross income towards investing and pensions combined.
- The 50/30/20 rule’s 20% covers all saving and debt repayment, not pure investing.
- The later you start, the higher the percentage you need, halving your starting age is a rough guide.
- Where you invest matters: capture the match, use pension relief, then fill your ISA.
- Begin at whatever rate you can sustain and ratchet it up with every pay rise.
Sources and further reading
- Investing basics MoneyHelper
- Check the Financial Services Register Financial Conduct Authority
- Individual Savings Accounts GOV.UK
Read the full guide
For the complete picture, see our in-depth guide: How to Start Investing: A Beginner’s Guide.
Speak to a vetted investment management specialist
This is free information, not personal advice. When you’re ready, we’ll match you with an independently vetted, FCA-regulated specialist, free, and with no obligation.
