Adjusting to adulthood can be a difficult stage of life, as you strike out on your own for the first time and adapt to huge changes at home and at work. It is therefore understandable that getting to grips with your finances can get pushed down your list of priorities, in particular, saving for your pension.
Of course, auto-enrolment has helped many young adults get started with planning for the future, but there comes a time when you need to be more proactive in ensuring you get the retirement you want and deserve.
For many, that time is when they hit their mid-30s.
According to research by Standard Life, just 23% of people contributed more than eight percent of their earnings into their pensions before the age of 35. But by the age of 36, this figure goes up to 35%.
So why are so many people stepping up pension saving at this particular point in their lives?
Well, the same study showed that 37 is the average age that people say they feel more financially comfortable. Similarly, the research revealed that this is the point where people tend to become more confident making financial decisions.
With age comes responsibility, from paying for a wedding and providing for your children, to keeping up with mortgage payments and other household expenses. Guaranteeing financial security, for both now and the longer term, therefore becomes much more important, so it makes sense that this is the time that people start actively working to secure their financial future. It is also a good time to take pension saving more seriously as by the time you are in your mid-30s, you’re likely to still have several decades of employment to come.
Increasing your contributions when you have many years ahead of you gives you full opportunity to take advantage of compound interest, as the size of your pension pot can grow significantly over time. The fact that time is on your side also means you are in a much stronger position to withstand and recover from market downturns, so you can afford to take a long-term view of your pension and wider retirement planning.
Preparing for retirement can be daunting for anybody, regardless of your age, but the rewards are considerable if you start as early as possible. If you have any questions about pension saving and making sure you are financially secure in the future, please get in touch with our team of expert financial planners. We will be happy to speak with you, so you can approach the future with confidence and peace of mind.
