Saving a pension is the best way to secure your future and ensure that you won’t run into any financial troubles down the line. You can start saving in your pension pot from any age, but it’s recommended that you start as soon as you can!
For most people, this will be in their early to mid-twenties when they graduate from university and start receiving a regular income. Of course, you can start saving even earlier than this if you have the means to do so but, saving from your twenties is an excellent time to start. This article will guide you through saving for your pension in your twenties and why this is the best time to start.
Why Should You Start Saving For A Pension In Your Twenties?
For most people, your early twenties will mark the beginning of your career and your newfound freedom. Perhaps you have just finished your degree or maybe you have been working full-time since college – nevertheless, you are still at the beginning of your adult life.
Your early twenties are a time when you will finally have a good income but you won’t have the responsibilities that may come to you in later life, such as a family, mortgage, or medical bills. This means that people in their twenties can afford to save more of their income away into a pension pot. It is likely that you will only have an entry-level job with a lower income or you may be using your money to travel, however, you still have far fewer responsibilities than you will do further down the line.
How Much Should You Save Into Your Pension In Your Twenties?
The exact amount of money that you are able to save will entirely depend on your individual financial situation. You should work out your expenses for each month and take this number away from your monthly earnings. The money left over can then be divided between savings accounts, your pension pot, and any other monetary considerations that you may have. It might be a good idea to think about when you want to retire – the earlier you want to retire, the more money you should be saving in your twenties.
How To Save For A Pension In Your Twenties
There are many ways that you could start saving for your pension today. If you do have a job, at the age of 22 you will be automatically enrolled in a workplace pension scheme, which will require you to pay money from your wages each month and will always require your workplace to contribute 3% into the pot every month. This is the best way to start saving for your pension because the money is taken automatically so there is no need to remember each month and the temptation to skip a month isn’t an option.
If you would like to learn more about saving up for a pension in your twenties, you can speak to one of our advisers today!
Image source: Pixabay