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See how a small change may make a big difference

Saving just 1% more may make all the difference

They say it’s the little things that count. And that's certainly true when it comes to saving for retirement. Just by putting an extra 1% of your monthly salary into your workplace pension scheme each month you may make a big difference in the income you’ll have in retirement.

As KP Luk, Head of Hong Kong DC Business at Fidelity International, explains: “Saving sufficiently for retirement might seem like a lofty goal, especially when household budgets are squeezed. However, saving just small amounts along the way may have a big impact when you’re ready to retire.”

Commit to popping an additional 1% into your workplace pension scheme now and thanks to the power of small amounts you stand to boost the pension pot you will have when you eventually come to retire. While 1% is a small percentage of your annual earnings, after 20 or 30 years it may make a significant difference to how much you have in your pension pot when you retire. That’s because the longer you give your money the chance to grow, the better. And regardless of how close or far you are to retirement, this saving method can still be suitable to you.   

Let’s refer to the following hypothetical examples:

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*The above examples are based on certain assumption and they are for reference only. Approximation based on a 1% increase in contribution. Continued employment from current age to retirement age, 65. We assume you are exactly your current age (in whole number of years) and will retire on your birthday at your retirement age. Number of years of savings equals retirement age minus current age. Nominal investment growth rate is assumed to be 5.2%. Hypothetical rate of salary increase is assumed to be 4% (2% inflation + 2% real salary growth rate). All accumulated retirement savings amounts are shown in future (nominal) Hong Kong dollars.

The value of investments and the income from them can go down as well as up, so you may not get back what you invest. This information does not constitute investment advice and should not be used as the basis for any investment decision nor should it be treated as a personal recommendation for any investment or action. Fidelity shall not be liable for any loss or damage arising from your reliance upon this information. The actual value of your investment are subject to many factors, it may be higher or lower than the above examples.

Take a step and look at the numbers
Use our interactive calculator to see how a small 1% increase in savings may make a BIG DIFFERENCE for you.

Start small and watch it grow
As demonstrated by the examples and the results of the calculator, to think big you should start small. Adding an additional $47, $84, or $127 a week to your pension savings may make a significant difference. And because we’re talking small sums, finding the extra money doesn’t have to mean huge sacrifices either, you can and should still grab that morning latte on the way to work to start your day. For even the most hard-pressed of savers with a little bit of discipline and a clear focus on your end goal it’s possible to free-up cash that you would otherwise fritter away and put it to far better use inside your pension instead, whether it’s staying in to cook and dine at home or ditch those unused TV and magazine subscriptions.

And the added beauty of saving into your workplace pension is that you probably won’t even notice the extra 1% going out because it comes straight out of your monthly salary.

Consider taking it up a level
The more you can save into your pension, the more likely you may be able to retire and maintain your current lifestyle. 

The trick is to save as much as you can afford now and try to increase your savings every year to ensure you’re best placed to enjoy your retirement.

As KP Luk says: “In order to achieve your full retirement ambitions and continue the lifestyle you have now, start saving early and try to put aside as much as you possibly can.”

Take a step and look at the numbers

Use our interactive calculator to see how a small 1% increase in savings may make a BIG DIFFERENCE for you.