If you start paying into your pension at 25, you’ll need to save four times less every month for a moderate retirement than you will if you start at 50.
Does the thought of how you’ll cope once you retire send shivers down your spine? Or maybe even the word ‘pension’ feels so far away you haven’t given it any brain space at all?
Whether retirement is months, years, or still decades away, here’s our cash-savvy advice on making the most of your money before work is a distant memory.We’re not suggesting that children should be managing their own pension pots, but canny parents can give their offspring a head start by paying into a pension for them.
Once you are 22, if you are working and earn over £10,000 a year, your employer must enrol you into a pension. Generally, as a minimum, you must contribute five per cent of your income over £6,240 and under £50,270, including tax relief.Some people choose to opt out of these auto-enrolment pension schemes in return for much-needed cash today.
You may also want to ask your employer if you can make pension contributions via salary sacrifice. This means you agree to give up some of your salary, which is then paid into your pension instead by your employer.
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