How I’m aiming to double my State Pension with just £30 a week

After making regular monthly investments while earning an average salary, this man is planning to retire early. Here’s how.

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Retirement saving and pension planning

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I  listened to part of an impassioned interview on the radio recently. And the interviewee was arguing that the rich and successful should be taxed until their pips squeak.

Why? Because they haven’t earned their money, he reckoned, merely ridden inflated asset prices higher (such as real estate, shares and others). And those assets have been driven up by the policies pursued by politicians.

No, no, no, spat the presenter. Those rich people have created wealth because of their efforts and sacrifices. And along the way, they’ve likely created jobs that have provided income and security for many. Why should those entrepreneurs be penalised for being successful?

Then something inspirational happened

The discussion became rather circular with neither participant backing down! But what happened next was inspirational — at least to me.

The presenter took a call from one listener who said he’d worked in a job on an average salary for the past 30 years. I thought he might side with the interviewee and demand tax hikes for rich people, but he didn’t.

Instead, he said he’d paid into a pension scheme over those years. And now he was in a financial position to be able to retire because his pension funds had done well. He also said he was now in his mid-50’s and would have to wait until the age of 67 before he could claim a State Pension.

His argument was that even an average Joe like him with an everyday job has been able to benefit from asset price inflation. So he rejected the notion put forward earlier that rising asset prices only benefited the already wealthy.

Regular stock investments and compounding

And I agree with the caller. Regular investment into pensions, shares and other assets over a working lifetime can be for everyone. But it does take some self-discipline. However, the prize can be worth the sacrifice. The show’s caller is planning to retire early, for example. And I believe it’s possible for me to match the value of my State pension by investing just £30 a week. Although that income isn’t certain because investments in stocks and funds can be volatile.

But that sum adds up to a regular investment of £130 a month. And a sum like that has been effective in building a pension pot for me because I started young when I was around 20.

For example, if an annualised return of 4% from investing in stocks is compounded for 40 years with those regular contributions, I’d end up with a pot worth just over £152,000. And that would be enough to match the State pension of around £9,339 a year for about 16 years if I drew the money out. And, right now, the FTSE 100 index is yielding around 3.5% from dividends alone. The figure for total returns may not be guaranteed but it seems realistic to me.

Indeed, the process of compounding works exponentially. And that means those monthly investments in the early years of my career packed a punch for my retirement fund.

I  invested in a company pension scheme, which had tax advantages and a big boost of regular contributions from my employer. But now I’m building my fund through buying shares within a Self-Selected Personal Pension (SIPP) and within a Stocks and Shares ISA. And that’s because I’m keen to choose my own funds and stocks.


Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Kevin Godbold has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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