RETIRING early is an appealing idea, especially with the state pension age set to rise, but you need to start saving now.

You can retire early but you need to budget for it by saving extra during your working life – pensions expert Sarah Pennells shares her top tips.

In order to retire at 55, some 11 years before the current state pension age, you'd have to save around £640 a month.

That figure is based on someone wanting an annual retirement income of £20,800 and who started stashing their cash away at the age of 22.

Some of that saving will automatically be taken out of your salary if you're signed up to an automatic enrolment pensions scheme – and your company will also pay in.

Sarah Pennells, consumer finance specialist at investment Royal London, said: "If you want to retire early, you need to know how you're going to pay for it.

"So, think about your current age, how much you earn, where your pension is invested, and most important of all, what you want out of your retirement."

The idea of giving up work early has become more popular with the rise of the FIRE movement, which stands for financial independence retire early.

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FIRE converts are often aiming to retire by 40, which isn't realistic for many people.

But that doesn't mean you can't stop working before the state pension age.

“The most tax efficient way of saving for retirement is a pension," Sarah told The Sun.

"If it’s a workplace pension, your employer also has to pay into it.

"But you can only take money from that once you’re aged 55.

"But retiring at 55 would still be at least ten years before the state pension kicks in – and would give you longer to enjoy your work-free life.”

Here are her top tips for an early retirement:

Shift your mindset

First of all, you need to shift your mindset, Sarah says.

Instead of thinking of saving for your retirement as "giving up" money today, think of it as helping you to live the life you want when you stop work.

That will help you stick to your budget and saving goals.

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Making detailed plans around what you want your retirement to look like will help you visualise it, which can be an incentive to save more.

Perhaps you want to travel, take up a new hobby, or simply spend more time with family.

You need to think of your savings pot as the tool that's going to let you do what you want.

Check your employer's contributions

If you've been enrolled into a workplace pension, your employer should be making a contribution.

Under automatic enrolment rules, your company should be contributing at least 3% of your salary to your pension pot.

A further 5% comes directly out of your salary, bringing your total contribution to 8%.

Some firms will pay more than the minimum amount, so it's worth asking whether you can get a bigger contribution.

Sarah says some employers will even match any extra money you pay in pound for pound up to a certain level, often even up to around 10% of your salary.

That could seriously boost the size of your pension pot.

Check your company's pension policy – you should have been sent these documents when you enrolled.

If you're not sure where to find the policy, it's worth checking with your firm's human resources department, which should be able to point you in the right direction.

Pension contributions from your company are basically free money so it's worth making the most of it.

Save spare cash

Any spare cash you can save up will help you reach your goal of retiring early.

Check your bank statements or online banking app to see where your cash is going and whether you can cut back.

Take a look at what you're currently saving, how much that could give you in retirement and whether there's a gap between that and how much you need.

Use online calculators such as those on the government-backed MoneyHelper.org.uk website.

If you're aged 50 or over, you're entitled to a free pensions guidance call with Pension Wise.

"A few pounds here and there will help towards your retirement pot," Sarah says.

"Retirement may feel like a long way away – until suddenly it's upon you."

Where you save your extra dough can also make a difference.

Cash sitting in the bank won't gain any interest, but if you put it in a savings account your money will grow over time.

You could also consider setting up a Lifetime Isa, which will give you an extra £1,000 a year maximum bonus, although you can't withdraw that money until you're 60.

Remember your state pension

Make sure you're not missing out on your state pension, even though you won't get it until your late 60s.

Your state pension can form a valuable part of your retirement income.

If, for example, you want to have £15,000 a year in retirement – it's worth remembering that your personal pension savings only need to provide around half that.

You can find out your state pension age on the gov.uk website.

The full state pension payment is currently £179.60 per week but the amount you get is based on the number of years of National Insurance Contributions (NICs) you make.

Gaps in contributions, for example when you're not working and looking after children, can be made up by claiming credits instead.

Thousands are missing out on these National Insurance Credits, which could be worth £5,335 over a 20-year retirement.

But you can plug these gaps to make sure you get your full entitlement – check the gov.uk website for full eligibility details.

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