Why start a pension now?

Starting early makes sense

Your money has more time to grow, and you will get more top-ups from the taxman.

If you start a pension early, you can pay in less each month and still match the pension of someone who starts later – or pay in the same which means you'll have more than they will, come retirement.

Age 25 Retiring in 40 years Age 35 Retiring in 30 years Age 45 Retiring in 20 years
Age 25 Retiring in 40 years Age 35 Retiring in 30 years Age 45 Retiring in 20 years
If you saved £200 per month, the taxman would also contribute:
£24,000 £18,000 £12,000
When retiring at age 65, your pension pot would be worth:
£167,000 £110,000 £67,100
This could provide you with an income of:
£9,580 £6,380 £4,030

These figures are illustrations only to demonstrate potential fund growth, and the pension income you might get when you retire. We've made some assumptions: that the tax position doesn't change; that your payments remain constant; and that you'll retire at 65. We've assumed that your investments will grow at 7% per annum (you may get more or less than that) and that your annual charges will be 1%. Nothing is guaranteed.

We've expressed these figures in today's terms by stripping out an assumption for future inflation (estimated at 2.5% per annum). These figures assume that no lump sum is taken from your pension pot. Taking a lump sum will reduce the value of the pension income.

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