How Much Should You Be Saving in Your 40s to Retire Comfortably?

Your future self will thank you….

If you're in your 40s and feeling like retirement is starting to appear on the horizon, but still far enough away to feel slightly out of reach, you are not alone.

This decade is often when life is at its busiest: careers are in full swing, kids at home, maybe your parents need help too and your finances feel like they're being pulled in every direction. You are time poor but it's a critical time to take stock of your retirement plans, and if needed, act.

So, how much should you be saving right now to retire comfortably?

What Does “Comfortably” Even Mean?

Retirement is deeply personal, and "comfortable" means different things to every one of us.

As a rough guide, you might want to consider the “replacement rate” rule:

Most people aim to replace around 50–70% of their pre-retirement income (after tax) to maintain their lifestyle.

So, if you're earning £80,000 a year now, a retirement income of £40,000–£56,000 might feel right—depending on your lifestyle, debts, and plans.

Your 50s Are Approaching

If you're in your early 40s, you may still have 20–25 years before retirement. That’s plenty of time to plan, but not so much time that it can be ignored.

If you're starting now, the general guidance is:

Aim to save around 20–25% of your gross annual income each year toward retirement, including pension contributions and ISAs.

This can sound like a lot - but don’t panic. This figure includes employer contributions, tax relief, and any existing pension growth. You're not starting from zero.

Realistic Savings Examples

Let’s say you’re 42, earning £70,000 a year, and you’ve already built up £100,000 in pensions and ISAs.

To target a retirement pot of around £700,000–£1 million by age 67, you might:

• Contribute £1,000/month into your pension (including employer contributions)

• Top up with £200–£400/month into a Stocks & Shares ISA (for flexibility pre-retirement)

• Review your investment strategy to make sure your money is working hard

This plan assumes moderate investment growth of 5–6% and no big interruptions.

The 3 Mistakes We Often See in This Age Group

1. Relying too heavily on the state pension
   It’s valuable, but very unlikely to be enough on its own. At today’s rate, it’s around £11,500 per year.

2. Not increasing contributions as income grows
   Promotions and bonuses often come along in your 40s. Keeping your savings rate flat is a missed opportunity.

3. Assuming your mortgage being paid off is enough
   You might plan to downsize when the children move out - whilst that helps, it’s not a substitute for long-term income planning.

This Is the Perfect Time to Work with a Financial Planner

Your 40s are the perfect time to take a step back, check you're heading in the right direction, and build confidence in your plans. A financial planner can help you do this by:

• Seeing if you are on track and if needed making suggestions around any adjustments

• Modelling different retirement ages and lifestyles and helping you to visualise what your retirement could look like

• Ensuring that you are making the most of tax allowances and employer benefits

• Chatting through any areas you may have overlooked, for example, protection, inheritance, or planning for education costs

In Summary

Your 40s might be the busiest (and most expensive) years of your life—but they’re also the most powerful for shaping your retirement outcome. Consider the following:

• Aim to save 20–25% of your income

• Use pensions, ISAs, and employer contributions wisely

• Avoid the “set and forget” trap

• Get advice early to gain clarity and peace of mind

Whether you're just getting serious about retirement or want a second opinion on your current plan, we're here to help.

Get in touch for a free initial conversation I promise there will be no jargon and no pressure.

This blog is for information purposes and does not constitute financial advice, which should be based on your individual circumstances.

• Levels and bases of, and reliefs from, taxation are subject to change and their value will depend upon personal circumstances. Taxation and pension legislation may change in the future.

• An investment in a Stocks & Shares ISA will not provide the same security of capital associated with a Cash ISA.