The size of your pension pot today is the least important thing about it.  

 

If you earn a decent wage but have honestly no idea what’s in your pension, or whether it’s anywhere near enough, here’s the first thing to know: you’re not behind, and you’re not alone.  Most of us feel exactly the same way.   

The truth is, hardly any of us were taught how a pension actually works (it certainly never came up in a class I sat in).  So we judge it by the one thing that matters least: how big the pot looks today.  Let’s change that.  By the end of this you’ll understand the three things that really decide what you retire on.  You’ll have let go of two beliefs that keep people stuck.  And you’ll have one simple step to take this week.  

No jargon.  No guilt.  Nothing you need a finance degree to follow. 

The three things that actually grow your pension 

1. Time does most of the heavy lifting

Good news to start with: your pension isn’t sitting still doing nothing.  It’s invested, so it earns a return, and the year after, that return earns a return of its own.  The longer it’s left alone, the faster it grows.  

That's why the years ahead of you matter every bit as much as the ones behind. A modest pot with two decades still to run can become far bigger than it looks today, with no dramatic effort on your part.

Picture a snowball at the top of a long hill. It barely moves at first, then picks up size and speed the further it rolls, growing fastest near the bottom. Your pension works the same way, which is pretty reassuring once you stop expecting it to dazzle you on day one!

 

2. A big slice of your pension isn't even your money

When you pay into a workplace pension, you're rarely the only one contributing. Two other sources top it up for you:

• Your employer. Under auto-enrolment, most employers add at least 3% of your qualifying earnings on top of whatever you contribute.
• The taxman, (believe it or not). The government effectively returns the income tax you'd have paid on your contribution, adding it straight to your pot.

So every £1 you contribute often lands as more than £1. Few things in life work quite like that. 

 

3. A little more can go a very long way 

If, like many people, you’ve had a career break, taken time out to raise children, or had caring responsibilities, you might feel like you’re playing catch-up. The good news is that a small increase in your monthly contribution can add up to a surprising amount over time.

Here's an example: 

Say you're 40, with the average pot for a woman that age, £20,141, planning to retire at 67. You earn £37,000 and pay in 5%, which is around £154 a month, and your employer adds 3% on top. Pop that into PensionBee's calculator and you're on track for roughly £119,000.

Now add just £50 a month from your take-home pay. Once tax relief is added, around £70 actually lands in your pension, taking your total to around £224 a month. Back to the calculator, and that pot is now heading for nearly £148,000.

That's almost £29,000 more, from £50 a month. I don't know about you, but a change that small turning into a number that big feels very much worth it.

Don’t forget, a pension locks your money away until at least 55 (rising to 57 in 2028), so it isn't for cash you might need sooner. But if you've a little room, even a small, steady top-up is something your future self will thank you for. 

 

Two myths worth letting go of

 

Myth 1: "A small pot means I've been bad with money."

Honestly, no. People save at remarkably similar rates whatever the size of their pot. The number mostly reflects pay, hours, and any time spent out of work, not how sensible or capable you are. Treat it as a starting point, not a character assessment.  

Myth 2: "It's too late for me to do anything about it."

Also no.  I hear this a lot from people who are convinced they’ve left it too late.   But because growth compounds, the years you still have count for a great deal, and every pound that goes in is boosted by your employer and by tax relief.  Later really isn’t the same as too late.  

 

The one thing to do this week

Find your number. 

Most of us genuinely have no idea what’s in our pension, let alone where it’s heading, and you can’t shape something you’ve never actually looked at.  

A pension calculator gives you that picture in about two minutes.  

So put the kettle on, and start here: 

• Find your current balance, or run it through a pension calculator for a quick projection.  
• Check what you're paying in now, and what your employer adds on top.
• See what you're on track to retire with.

Once you can see where you stand you can make a more informed decision on what your next step needs to be.  You don't have to do everything today. Small, early and steady beats big and late, every single time. 

See you Thursday.

Anna

Find your number with the pension calculator →

We've teamed up with PensionBee to bring you this calculator.

Sources: PensionBee, UK Pension Landscape, July 2025; Royal London, Tackling the Gender Pension and Wealth Gap, January 2024. Projections assume contributions continue, around 5% annual growth and retirement at 67. Investment values can fall as well as rise. This is general information, not financial advice.