Start saving when you're younger and/or retire later
Start saving when you're younger and/or retire later
The age you are when you start saving or when you retire can have a dramatic impact on how much pension you will have.
If you don’t want to have to spend less in your retirement, you will need to save some money beforehand. An easy way to save more is to start saving for your retirement at a younger age. The younger you are when you start saving for your retirement, the longer the period you can spread your saving over. This helps to make it easier to afford. You’re never too young to start saving for retirement.
Dave
Dave's friends always joked that he was no big spender. Well, that was until they realised that he’d started saving for his retirement 20 years before they did. Dave can still go out and enjoy himself while his friends are scrimping and saving for a retirement that is creeping ever closer. Dave is planning what he wants to do when he retires in a few years' time when his friends will be still working.
The older you are when you retire, the more pension you will receive. This is because:
- you will have had longer to save for your retirement; and
- your pension is likely to be paid for a shorter period than if you had retired when you were younger.
If you can’t, or haven’t been able to, start saving when you are younger then you might be able to retire later than you had planned. Alternatively, you could choose to spend less in your retirement.
Cath
Cath only started saving for her retirement after her 40th birthday. She had always thought she’d retire when she was 50, but that is now less than ten years away. She would have to save enough in the next few years to give her a pension for the rest of her life. On average, this could be another 35 years. Cath will have to carry on working and not retire until she is at least 60.