Home > Transcript - Starting to save younger
Many people put off contributing into a pension until they are older. The truth is, the younger you start, the better. Even if you contribute less than you would when you’re older.
If you automatically enrolled into NEST, every month you contribute, your employer contributes also.
Most people would also get money from the government in the form of tax relief. After a year, it’ll look like this.
And by the time you’re ready to retire, it could look like this.
You’ll have given NEST plenty of time to grow your money as much as possible, leaving you with a pot for your retirement.
But what if you don’t want to start saving now? You can just make up your contributions later and get the same result, right?
Wrong. Even if you double what you put in when you do eventually start contributing, you’ll have missed out on years of contributions from your employer and tax relief from the government.
And you’ll have given us less time to grow your money as much as we can. So even though you’ll have contributed the same, you’ll end up with less.
So let’s say you start with monthly contributions of 20 pounds at 28, as opposed to 40 pounds at 48.
Either way, you will end up paying in 9,560 pounds.
But if you started earlier, you’d get 14,600 pounds extra.
So you can directly affect how much money you’ll have later in life. What impacts this most is what you do now.