How early should I start pension planning?

More time to save

If you start saving into a pension early, you can make contributions over a much longer period. That in turn means…

You don’t need to contribute as much each month

If you’re worried that you can’t afford to set aside enough cash into a pension scheme, starting early eases this pressure, as you’ll be able to make much lower monthly contributions and still achieve a substantial pension pot in the future.

Pay less to the taxman

You can get tax relief if you pay into a pension, which means for every £20 that goes into your pension, just £16 comes out of your pay if you’re a basic rate taxpayer.

You can also benefit from tax-free growth, which can give you better long-term growth than you could get with other investment options.

You can get extra money from your employer

Your employer is legally required to offer and contribute to a workplace pension scheme if you’re aged 22+ and earn at least £10,000 a year.

That means you’re effectively getting extra pay from your employer.

You won’t need to rely on the State Pension

The State Pension won’t be enough to cover all your living costs and enable you to enjoy the type of lifestyle you want in retirement.

Planning early therefore puts you in a much better position to enjoy your retirement - and take advantage of the State Pension as a useful top-up to your income.

Gain confidence for the future

Uncertainty over the future can cause huge pressure and anxiety.

By saving earlier in your career, you can feel more secure about having enough money in later life.