It comes after a MoneyAge report revealed that a third of people don’t know how much they need to contribute to their pensions annually to secure a comfortable retirement.

Mike Jordan, whose firm Jordan Financial Management has been advising West Midlanders on financial matters for more than 25 years, urges people to consider the question of how much they should be contributing.

He said: “It’s concerning to think that a third of people could be sleepwalking into an unsatisfying retirement, simply because they haven’t struck the right balance with their contributions.

“The fact is, contribute too little and you could leave yourself short in retirement; contribute too much and you might miss other goals or place pressure on your current budget.

“Asking how much you should be paying into your pension each year is sensible.

“The reality is, there isn’t a simple answer that can be applied to everyone. a range of factors, from your current age to your desired retirement lifestyle, will affect how much money you’ll need.”

According to Mike, there are some simple steps you can take to calculate your ideal annual pension contribution – beginning with reviewing your current pension and assets.

Mike said: “The first thing to do is gather statements from pensions you have already contributed to, and consider other assets, savings and investments you plan to fund your retirement with – this money will act as a foundation for future contributions.”

The next step is to decide when you aim to retire, and set out your desired retirement lifestyle.

Mike explained: “If you’re envisioning a retirement lifestyle with luxury holidays, trips with friends and a new car every few years, you’ll need to save more than if you’re happy with a more moderate lifestyle.

“With a lifestyle set out, you can factor in unexpected costs and inflation to determine how much you’ll need as a regular income to maintain it.

“It is also wise to plan beyond the average life expectancy, so you’re not left facing financial difficulty if you live for longer.”

However, since your pension is usually invested with the aim of delivering long-term growth, you don’t need to contribute the total amount needed to secure your desired retirement lifestyle.

Pension contributions also benefit from tax relief at your marginal rate of Income Tax.

Mike advises using a cashflow model as part of your financial plan to bring all of the data together and work backwards to figure out how much money you need to pay into your pension annually.

He said: “It’s important to remember that planning your annual pension contributions is just one part of your retirement plan – you may also need to know how your pension money is invested, or how to access the savings when you’re ready.

“If you’d like help creating a complete retirement plan to prepare for the next chapter of your life, please do get in touch.”