Save at home while staying at home

During lockdown, we haven’t been able to go about our daily lives like we normally do whether it’s travelling to work on the train, buying lunch from the local sandwich shop, or even Friday night beers. Have you found that you have a bit more disposable income? Have you considered saving it?

Being an early bird and paying into your pension from age 25 is better than waiting until you are 35 or 45. Bottom line, the longer you wait to contribute to your retirement savings, the more expensive it’ll be to catch up.

You could miss out on:

Tax relief – this basically equates to ‘free money’ from the Government (depending on what your tax rate is).
A helping hand from your employer – however much you pay in from your own pocket, your employer will make monthly payments into your pension savings too.
Seeing your money grow (or not!) – your overall contribution is invested in a fund with a provider or investment company and it’s designed to work for you, to make its own money. Remember that with any investments, your money could go down as well as up and isn’t always guaranteed, so take this into consideration.

You should also think about:

Timing – your money might run out sooner than you predicted (but not if you buy a guaranteed income for life). If you retire with a small pension pot and expect to live on a high income, or you live to a ripe old age, your money might not last.
The State Pension – don’t just rely on this. You’ll only get this if you’ve made the qualifying amount of National Insurance contributions. Even so, by the time you retire, it might not be enough to live on alone, so you’ll need your own pension savings to help bridge the gap.
Early retirement - you may have to retire earlier than planned. All being well, this won’t happen, but you may fall ill, or have to leave your job to care for a loved one. So, it’s really important that you have enough money to survive on if this happens.

And don’t worry, Friday night beers will be back. Hopefully soon.