When should you begin to think about pensions?

When should you begin to think about pensions?

If you have started your first full time job, then you should really start to think about paying into a pension. It is never too soon to start putting even a little bit of money away towards your retirement; and whilst that really might seem like such a long way off when you are still in your 20’s there are a number of reasons to start as soon as you can.

Life expectancy

Thanks to numerous huge breakthroughs in medical science, people are living longer and this means that the length of time you can expect to live after you retire will, therefore, be longer. If you want to ensure that you have enough money put away to look after you during your retirement, then that means putting money into the pension pot as soon as you can. It doesn’t have to be a huge amount; just as much as you can comfortably afford. Essentially, because there is a likelihood that you will live longer, you need to ensure that your overall pension pot is larger. 


When you first start working, it is reasonable to assume that you will have other financial constraints on your money. These might include things such as paying out on a mortgage, buying your first car and possibly even starting a family. All of these things will require a large proportion of your salary. Whilst it might not seem worth putting just a small amount aside for pension, especially when you don’t have much money left after all these other expenses, even the smallest amount will soon add up. 

It is also worth remembering that many companies will put contributions into a pension for you as long as you are paying something in as well. There is often a qualifying period that you must have been with an employer for before they will do this, so check. There is often a minimum percentage of salary that a company will expect you to contribute to a pension before they will make contributions on your behalf as well. Don’t be put off if you can only afford a small payment every month; starting a pension this way is still better than not starting a pension at all.  

What little money you can put aside will have a chance over the years to grow in your pension pot. As you get older and pay off your mortgage and other financial commitments, or your salary increases, you can increase the amount of the monthly contributions that you put into your pension. 

If you don’t put enough money away in your pension over the years you may unfortunately find yourself in a position where you struggle to afford the necessities when you retire. This is certainly not the way most people want to spend their retirement so as soon as you can think very seriously about starting to put money into your pension and saving for the future.

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