..I know right now the main concerns are likely to be advancing in your career, saving up for a mortgage or protecting your children financially but if you start saving a little bit into a pension now, the compounding effect will make it much easier to have a suitable sum at retirement than if you just leave it last minute.
.Also, you get 20% tax relief on your contributions which means that you only need to contribute £80 to get £100 into your pension automatically. If you’re a higher rate tax payer then you can also reclaim the additional tax relief (20/25%).
Under Autoenrollment Rules, your company will need to have a workplace pension which you can contribute into. If you are over the age of 22 and earn over 10K a year, you will be eligible to receive employer contributions into your pension too which makes it particularly valuable.
Depending on how your company pension scheme is set up, you may also be able to lower the tax you have to pay on your income/bonuses by redirecting some or all of this into your pension through salary sacrifice.
..The state pension age has recently increased to 68, and seems to have plans to continue increasing, but setting up a suitable personal pension fund means that you may not have to wait as long to retire because you can access personal pensions at age 55 (rising to 57 by 2028). Whether this is a viable option depends on how much you have managed to save and how far this can go.
.Young people will often first approach a financial adviser with queries relating to mortgages, protection or investments, leaving their pension as an afterthought. However it can be helpful to address retirement planning too so that you have a clear path to retirement that takes into account your affordability and other current priorities. This can give you an idea of what your current savings may provide you with and what you need to do to have enough to fund your retirement.
..It may seem a long way away, but it’s important to make plans as soon as you can and modify these through the different stages in your life to ensure that you remain financially secure.