When should I start saving for retirement?

When should I start saving for retirement?

Hi Charlie,

It is never too soon to start saving for your retirement.

The earlier you get started the better. It means that the money that you are investing has much more time to grow. This means it can benefit from the effects of compounding which over the long term can have a massive impact. I really can't stress just how much of an effect this can have. It is absolutely huge!

I don't know how old you are but if you are younger then you may be worried about locking away your money into a pension which can only be accessed after a certain age. This is currently 55 but due to increase to 57 in 2028.

This is a legitimate concern and is important to bear in mind. You do not want to have all of your money locked in a pension and then suddenly need it.

Good retirement planning at a younger age therefore includes both pension and ISA investments. You can get tax relief on pension contributions and so when it comes to retirement planning it is important to make the most of this. The government is essentially giving you free money! Especially if you earn over £50,270 per year as pension contributions can benefit from 40% tax relief.

It is not only your pension that you can use in retirement but also ISA's and any other investments/cash that you have. The benefit of an ISA is that you can benefit from compounding if you leave it invested for long enough but you also get to access this money if it is needed. On top of this ISA's offer tax-free growth (as do pensions).

Exactly how much & how you should be investing will depend on your situation. It is different for everyone.

If you want to talk more about your specific situation you can message me and I would be happy to talk about it.

Thanks
Luke
Independent Financial Adviser