For people just starting out in their twenties, individuals have a lot of time to save, which is a benefit. Moneybox explained the power of compounding and how over time it can lead to a hefty sum.
They said: “[Compounding] is when you get the returns of your original investment, plus a return on your returns. By the time this comes to your retirement, this can really add up.
“You should also consider staying in enrolled in your workplace pension if you have one. It’s free money from your employer after all.”
Additionally, Britons can add their spare change of everyday purchases into their pension pots.
Moneybox have a round up feature which puts those extra pennies aside, which can really add up to pounds over the years.
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For those in their thirties, the tips above apply but Moneybox explains it is all about “saving smarter”.
They suggest increasing one’s pension payments with every pay rise they get. Also, of importance is getting familiar with the retirement living standards.
After 30, people may want to start visualizing what they want their retirement to actually look like, and work towards that.
They continued: “A moderate level of annual income for a single person is £20,200, for a couple it’s £29,100. If you don’t think that’s enough you may need to increase your contributions starting from now.”
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At this age, people may have had multiple jobs meaning they have multiple workplace pension pots. It could be very useful to find and put all these pots together.
They added: “Every new job comes with another workplace pension so you could have lost pension money you didn’t even know about
“There are millions of pension pots out there worth 20 billion so now is the time to track them down and bring them into one pension.”
For those in their forties, Moneybox urges people to ‘get serious’.
They said: “Ask yourself if you’re on track to retire when you want to and fund your lifestyle?
“This is when it’s most important to pay attention to fees.
“If you’re paying more than one percent for your pension, this could really eat away at your annual returns, and decrease your final pot.
“Remember, when you leave a job, your employer contributions into your workplace pension will stop, but you will continue to be charged fee’.
“Consolidating old pots into one pension could help you find lower fees and give you the tools you need to save for retirement.”
No matter the stage of life one is at, it is never too late to start saving towards the life they may want after retirement.
This will be different for each person as everyone leads different lives.
Moneybox concludes: “Start saving now, you will thank yourself later.”Internet Explorer Channel Network