Planning your Retirement - In your 20s
05 July 2017
Retirement may not be a high priority in your 20s but you have the best chance to prepare.
Make the most of your employer's pension. Don't opt out of the auto-enrolment if you are employed. The 1% deduction from your pay packet is matched by your employer - and the employer contribution will rise to 3% in 2019.
You will be automatically paying into your State Pension through your National Insurance Contributions. If you can, you should boost your pension pot by taking out a Lifetime ISA - it enables the over-18s to put in up to £4,000 per year with the Government paying an annual bonus of 25%.
If you saved £4,000 a year into a LISA from the age of 18, until you were 50 years old, you would earn a Government bonus of £32,000 on top of the £128,000 you've saved, plus interest.
If you are self-employed or working as a carer, consider a personal pension. While you will not have an employer contribution, you will get tax relief.
According to Which?, you need an annual income of £26,000 for a comfortable retirement, so it is good to start saving early.
Read our Planning Your Retirement leaflet for more information or give us a call.