You have so much to save for or spend your money on that the thought of parting with money that you won’t see again for 40-50 years can leave a little bit of a sour taste. You need to think about the future though. Before you know it you will have spent a decade putting off the inevitable task of starting your pension and ten years of savings will have passed you by in a flash. That’s not designed to depress you but it is something that needs to be considered.
There’s plenty of independent content out there to get started, for example this pension article by thisismoney.co.uk. You can also get some great advice and insights from online tools, for example Nutmeg has an online pension pot calculator that recommends how much you should be saving each month based on your personal goals.
I can’t afford it
No-one is saying that you have to put away hundreds of pounds a month leaving you with no money to enjoy your 20’s. In fact start small – put away what you can afford after you’ve bought that shirt and paid for the night out. Just make sure you start somewhere. Don’t overdo it and sacrifice your entire months earnings letting life pass you by so that you can be rich when you retire. Try and find a balance.
I have no idea what I am doing
This is the case for many people – it can be a daunting task. There are state pensions, workplace pensions, personal pensions then within this there are other types of pensions. What will inflation do in 40 years’ time and how much will I get back? Will that be enough? These are questions that are probably spinning around your head but by using calculators that are specially designed for this task you will be able to get the right advice for your circumstances. There is nothing to say you can’t change and adapt your pension as your circumstances change.
Do I already have a pension?
If you are in your mid – late twenties and have been working for a few years the chances are you may have a workplace pension from a previous job that you are unsure of. We don’t always study our payslips in detail especially now with online banking. Many people tend to check their bank balance and not often check their payslip. You could have been regularly contributing to a pension scheme in your employment – in fact you may be now. If that is the case you can check this out and it is possible to transfer multiple pensions into one new pension.
Get sound advice
It pays to get advice – you may not have time to visit a financial advisor and you may not have the funds to choose this so opting for online content and tools you be able to find out all this information when it is convenient for you. It is important to get it right though as it is a big financial decision as with any savings, borrowings and investments.