It has been shown that those who invest in their pension scheme from an early age, when they are in their 30s and 40s, benefit exponentially when they eventually retire.
The temptation at the younger age is for the saver to be me more concerned with immediate living costs and events in the nearer future such as family trips abroad, marital and wedding ceremony expenses. Furthermore, the savings for and money spent on children accumulate over the years if one decides to settle down and have a family.
However, it has been emphasized that if a person is able to allocate money for their pension pot at this stage they stand to benefit a huge amount when it comes to the latter years of their life.
If a saver is willing to allocate an additional decade storing money for their pension scheme they can end up growing their pension by double the amount. For example, if one was to put aside £100 each month for a total of 20 years under the premise that they had a 5% return on their investment, they would eventually end up with £41,000. However, if that was done for 10 extra years, the final pot would be a staggering £83,000 in comparison.
A spokeswomen for the company ëFidelity Worldwide Investingí, Maike Currie, has offered a great deal of expertise and advice for those looking to benefit from this approach and begin saving for retirement in the earlier periods of their life, particularly in their 30s.
She argues that of the utmost importance is to implement a budget plan and always revaluate oneís outlays and debts in order to achieve the most financially expedient strategy.
Furthermore, she recommends people subscribe to their employerís pension scheme as soon as they possibly can in order to squeeze as much as they can from the particular scheme. On top of this, it is advisable to consider the longer term future when thinking about investing in various ventures.
She also stresses the importance of considering other factors against the pension scheme, such as whether the saver has a family to take into account or they have an adequate amount saved if they were to lose their job. Another important variable to consider is whether the saver is in the market for a property or wants to purchase one in the future.
Despite highlighting the benefits of putting money into a pension scheme early on, it is also necessary to consider the burden placed on someone with substantial debt and weighing this up when formulating a budget plan. Debt can be particularly destructive to a saverís financial welfare when it is unsecured as it is with personal lending schemes and credit cards.
Of the utmost importance is to learn about oneís company pension facility as these often provide contributions that effectively mean a pay rise for those willing to put the hours in to find out about the myriad of benefits and then sign up.
Additionally when it comes to investments with your pension, one can absorb greater risk through shares as there is a higher likelihood that the investment will end up paying out in 20 or 30 years.