Do you spend more on your looks than your pension?

How much do you pay to look your best? Maybe around £2,670 a year, or £222.50 a month, according to some simple sums we ran in the office this week.

Astonishingly, that’s £1,000 per annum more than is paid into the average workplace pension*.

What do you want your retirement to look like?

Retirement, for many, is an event a long time into the future. It’s therefore easy to dismiss pensions as something we can put off thinking about until a later date.

But that would be a mistake, because the longer we leave it, the less time we have to build up a decent pot of money to retire on.

Think about it like this: with luck we’ll all have 20-30 years of retirement to enjoy. That’s 240-360 months with an income of just £833 per month if we are relying on just the state pension**.

That may just about pay for food and board, but it certainly won’t stretch to any fun activities or long-awaited holidays.

So, if we want to live comfortably in our retirement, we need to be saving for ourselves too.

Making the most of workplace pensions

The good news is that with the introduction of autoenrollment of the workplace pension, a minimum of 8% of our salary is now paid into a pension (of which at least 3% is paid by the employer, with the employee making up the difference).

That contribution is from your pre-tax salary, so for most people the actual cost works out less than it sounds. For example, someone on the median average UK wage of £26,000*** would get at least £1,580 a year pumped into their pension – or £131.67 a month*.

But the bad news is that unless we commit to saving more, we might not be able to live the life in retirement we might dream about.

How to save more

With the cost-of-living rising, saving more money isn’t an option for many. But there are those that could sacrifice some of the niceties today for nice things in the future.

Take our spend on beauty for example. By our calculations, you could save up to £1,725 a year—or around £143.50 a month—depending on your current expenses and how much you’re willing to economise.

What’s in the beauty basket?

Our beauty basket was based on the things my colleagues and I spend money on regularly. Of course, your personal spend will be different, but the goal was simply to create a kind of ‘benchmark’.

We included a range of ‘basic’ services like haircuts or leg waxes, as well as a few more ‘luxury’ items like a massage or a manicure. In this first instance, we’ve based our cosmetics pricing on more expensive brands – although we have stuck to a just a few key products. Adding these brought the total beauty costs to £2,670 a year, or £222.50 a month. That’s almost £90 more a month than the average autoenrollment pension we talked about earlier.

Hair cut£70 Every 2 months£420 
Hair highlights£130 Every 4 months£390 
Full leg wax£40 Monthly£480 
Manicure£35 Monthly£420 
Eyebrows£15 Monthly£180 
Massage£60 Every 2 months£360 
Spray tan£35 Every 3 months£140 
Foundation£35 Every 6 months£70 
Moisturiser£35 Every 6 months£70 
Mascara£21 Every 3 months£84 
Lipstick£28 Every 6 months£56 

What could we shave off?

We also costed out a ‘version two’ of our basket, based on suggestions such as calling your local hairdresser on the day to see if they offer standby appointments, colouring your hair yourself, and choosing less expensive brands. We managed to shave off £1,725 over the year or £143.75 a month.

Hair cut on standby£35 Every 2 months£210 
Hair highlights£130 Yearly£130 
Roots touch-up at home£5 Twice yearly£10 
Full leg wax at home£15 Monthly£180 
Manicure by a friend£0 Monthly£0 
Eyebrows once, then at home£15 Yearly£15 
Massage£60 Every 3 months£240 
Tanning product at home£8 Every 2 months£48 
Foundation£10 Every 6 months£48 
Moisturiser£13 Every 6 months£26 
Mascara£8 Every 3 months£32 
Lipstick£8 Every 6 months£16 

Saving what we don’t spend

More meaningful still, is what you could achieve if you took your monthly saving and invested it in your pension. Because that £143.75 saved each month is taxed income, it would be rounded back up to £179.86 in your pension pot^. If you then received an estimated annual return rate of 5% on your investment, you could have an extra £12,231.57 in five years’ time and a not insignificant £73,928.52 after 20 years^^.

If this has sparked your interest and you’re looking for investment ideas, I’d suggest keeping things simple with a few funds that can offer you diverse exposure to different countries and assets.

Liontrust Special Situations and SVM UK Opportunities are good core UK equity candidates, while CT Global Focus and T. Rowe Price Global Focused Growth Equity have a nice spread of holdings around the world.

To boost your growth potential, you might want a small amount in an emerging market fund like GQG Partners Emerging Markets Equity or a region-specific option such as Matthews Pacific Tiger, although it’s important to remember these types of funds will be riskier options than investments in developed markets and while the potential gains could be higher, you will have a greater chance of losing money too.

For a more cautious investment, you could also consider a fund like Close Managed Income or Jupiter Merlin Balanced Portfolio, both of which invest in some bonds and other assets, as well as equities.

*Source: Contributions are based on a band of ‘qualifying earnings’. This is any pre-tax employment income between £6,240 and £50,270 (in 2022/23). On a salary of £26,000 the calculation is therefore (£26,000 – £6,240) x 8%
**The state pension is approximately £10,000 per annum
^Calculation is for a basic rate taxpayer.
^^Source:, £179.86 per month over 5 and 20 years with 5% annual interest compounded monthly.

Note: This article was originally published 12 June 2017 and updated on 22 August 2022. 

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