For all you younguns out there

[Woodsey]

In before arrboy sarcasm 

You will spend your youth enjoying life without a care in the world as you rightly should, don't stop that.....

Suddenly you will hit an age where you think fk, how long do I need to keep doing this shit for before I can sack it off?

Happened to me about 5 years ago and I started to take a more serious attitude to saving for the future.

The moral of the story is to start saving an amount in your mid 20's that may seem a bit painful at the time as it will make your life a lot easier 25 years down the line.

I always saved, but probably never enough because I never thought beyond the next year or two, fortunately I got my shit together about 5 years ago and I now save more as I definitely wasn't putting enough aside before. Paying into a pension is the most tax effective way of saving money.

Have a read of this http://www.bbc.co.uk/news/business-38609422

Yours sincerely, possible future skint pensioner if I don't sort my shit out 

[hhyftrftdr]

''They reveal that even at the age of 25, you need to be putting away several hundred pounds a month''......yeah I'll just sacrifice a roof over my head to stick some money in a pot.

I'm up shit creek without a paddle but I'm very aware in all reality I'm gonna be working until I drop dead

[EvilPie]

I'm pretty sure that for most their salary by the time they hit their 40s will be significantly higher than when they were in their 20s. Their spending will obviously have increased due to kids and all that shit but it should have also reduced because of less drink, drugs and generally fun.

Really can't see the point of saving anything when you're 25. Try to get on the property ladder asap but forget pensions in my opinion.

The long term savings you make by steadily paying off a house whilst it also appreciates in value are enormous. If you buy a house at 25 then by the time you're 40 it's more than half way paid for and you get to re-mortgage at a low LTV. The savings you make there far outstrip the few quid you could've put away in a pension pot.

I've always classed my house as my pension pot since I was in my 20s. It forced me to put money in to bricks and mortar and has put me in good stead now. If you have a mortgage you have to pay it, there's no avoidance. If you have a pension fund you can easily skip a few months to give you an extra bit of blackjack money if you have a bad run.

House first, pension second in my opinion.

[Woodsey]

I'm pretty sure that for most their salary by the time they hit their 40s will be significantly higher than when they were in their 20s. Their spending will obviously have increased due to kids and all that shit but it should have also reduced because of less drink, drugs and generally fun.

Really can't see the point of saving anything when you're 25. Try to get on the property ladder asap but forget pensions in my opinion.

The long term savings you make by steadily paying off a house whilst it also appreciates in value are enormous. If you buy a house at 25 then by the time you're 40 it's more than half way paid for and you get to re-mortgage at a low LTV. The savings you make there far outstrip the few quid you could've put away in a pension pot.

I've always classed my house as my pension pot since I was in my 20s. It forced me to put money in to bricks and mortar and has put me in good stead now. If you have a mortgage you have to pay it, there's no avoidance. If you have a pension fund you can easily skip a few months to give you an extra bit of blackjack money if you have a bad run.

House first, pension second in my opinion.

Half agree mate.

I would however say that if you save enough early on it grows into a much bigger pot faster for the mid/late years. This is important by the time you get into the later years before retirement. The difference in growth between a 100, 250, and 500k pot if you have say 10% growth is so massive in the final years that it's worth shoving money as much money as you can afford in the early years into it to get to that bigger number for the later growth years.

House first, pension second? Ok maybe for the younger guys who don't know what interest rates will do in the long term, but for me with interest rates so low I'm better off smashing as much into my pension right now and using my tax free lump sum to finish off any final payments.

Half pissed now, so will respond to any more replies tomorrow 

[Eck]

Just marry a rich bitch

[pleno1]

my advice..

- don't worry about saving a penny
- spend all money you have and spend it on experiences/meeting new people/educating yourself
- if you do really well between 20-30 and set yourself up you wont have to worry about saving

[Jon MW]

Something I thought was a bit 'odd', or perhaps just journalists being journalists, in that article they pick on £20,000 as a pension target to aim for because of the report saying that a bit over £20,000 is the average expenditure of a retired household.

But won't most retired households have 2 people in them? At the very least some will. So if that expenditure is for an average of 1.7 people (for example) then the pension they each need goes down to about £13,000 - which makes the extra amount above the state pension seem a lot more achievable. Particularly as I would assume that average expenditure is disproportionately skewed upwards by the extra expenses any retired households have in London.

[Woodsey]

Something I thought was a bit 'odd', or perhaps just journalists being journalists, in that article they pick on £20,000 as a pension target to aim for because of the report saying that a bit over £20,000 is the average expenditure of a retired household.

But won't most retired households have 2 people in them? At the very least some will. So if that expenditure is for an average of 1.7 people (for example) then the pension they each need goes down to about £13,000 - which makes the extra amount above the state pension seem a lot more achievable. Particularly as I would assume that average expenditure is disproportionately skewed upwards by the extra expenses any retired households have in London.

The way I think about it myself is right now I live on about a grand a month after my bills are paid, my bills are about £300 a month (minus the mortgage). So I have a minimum number I want to get to make sure I get that £1300 a month pension. Any more Is icing on the cake and means I can go on more holidays etc. I don't want to rely on the state pension either. No effing way I'm staying in the corporate game until 67, want to be gone before 60.

Wouldn't surprise me down the line if they start to means test pensions also, another reason why I won't rely on that....

[hhyftrftdr]

my advice..

- don't worry about saving a penny
- spend all money you have and spend it on experiences/meeting new people/educating yourself
- if you do really well between 20-30 and set yourself up you wont have to worry about saving

2 of the 3 cover me nicely, no prizes for guessing which one doesn't apply though

[arbboy]

I think relatively successful people in their 40s advising people currently starting out in life on a results orientated basis is dangerous based on their situation where they have enjoyed record low interest rates, record property captial appreciation and incredible university financial terms when they went in the 1990s.  

To sum it up for me i went to uni and got paid by the government to go to uni a grant twice the amount of my fully catered hall fees every term with no £9k a year fees to pay and no loans.  I came out of uni with an education and money in the bank and zero debt to start my career.  I basically had the same money again after my bills were paid to get pissed and live on throughout uni.  With a summer job i was able to live a comfortable live as a student, run my own car, foreign holidays every year. I came from a single parent (much rarer in those days) family with my mother earning relatively low wage hence my full grant status.  Kids nowadays wouldn't be remotely able to relate to this.  

Upon graduation in the mid 90s housing price ratio to wages were at a record low in modern times (well under 3/1).  I started out on £14k a year outside of London and could have bought a 3 bed house easily for less than 3 times my salary. Walking into my local bank and getting a mortgage with a decent graduate career and starting salary would have been the formality of all formalities and the bank manager would probably have offered me a bigger mortgage to buy a 4 bed house with.

Within 3 years of graduating my annual salary would have been bigger than said house if i had bought it when i graduated.  What kid can possibly relate to this nowadays unless they are a professional footballer?

I had all the disposable income in the world since i graduated but never once considered paying into a pension in my 20's.  Would i be better off later in life?  Probably.  Spend your 20s investing your money in your talent (s)to earn large later in life doing something you are passionate about.  Don't spend your whole life doing something you hate if you are talented enough to do something you love.  I took a huge pay cut initially to enter the online betting industry because i wanted to spend the prime years of my life doing something i was good at but more importantly loved doing and would it wouldn't seem like work to put in the long hours to get to the level where you are very good at what you do.  I saw it as an investment short term in my future and it would pay off both financially long term but lifestyle wise even more by bouncing out of bed every day loving my job.  16 years on nothing has changed.  It is much much easier becoming successful (and wealthy long term financially) doing something you love than something you don't.  

I am at the time in my life now that i am thinking like Woodsey but stuff like that never crossed my mind in my 20's.  There are so many things you can't do when you are 40/50 with all your money you have saved that you want to do in your 20s.  Get to your 40s and think 'i done all the crazy stuff i wanted to do so it doesn't interest me now' and you will probably avoid the mid life crisis as well that occurs because you spent your whole of your youth and 20s being a nit and planning for your retirement.

How does someone in the 20s nowadays with £60k of student debt, huge rent payments every month even afford to put money into a pension with a normal job as they climb up the career ladder without massively reducing enjoying the prime years of their life?  Paying off your expensive unsecured debts is way more benefical in your 20s than pumping money into a pension (unless you are lucky enough to be a higher rate tax payer that early).  Once you are debt free then worry about pensions.

[DaveShoelace]

my advice..

- don't worry about saving a penny
- spend all money you have and spend it on experiences/meeting new people/educating yourself
- if you do really well between 20-30 and set yourself up you wont have to worry about saving

That's not really advice. Spend all your money, have a great time and get rich.

[DaveShoelace]

I'm pretty sure that for most their salary by the time they hit their 40s will be significantly higher than when they were in their 20s. Their spending will obviously have increased due to kids and all that shit but it should have also reduced because of less drink, drugs and generally fun.

Really can't see the point of saving anything when you're 25. Try to get on the property ladder asap but forget pensions in my opinion.

The long term savings you make by steadily paying off a house whilst it also appreciates in value are enormous. If you buy a house at 25 then by the time you're 40 it's more than half way paid for and you get to re-mortgage at a low LTV. The savings you make there far outstrip the few quid you could've put away in a pension pot.

I've always classed my house as my pension pot since I was in my 20s. It forced me to put money in to bricks and mortar and has put me in good stead now. If you have a mortgage you have to pay it, there's no avoidance. If you have a pension fund you can easily skip a few months to give you an extra bit of blackjack money if you have a bad run.

House first, pension second in my opinion.

Yeah this is how I am approaching things ATM especially as interest rates are low. One caveat though is if you can get an employer to match your pension contribution it's tremendously +EV.

[Marky147]

my advice..

- don't worry about saving a penny
- spend all money you have and spend it on experiences/meeting new people/educating yourself
- if you do really well between 20-30 and set yourself up you wont have to worry about saving

2 of the 3 cover me nicely, no prizes for guessing which one doesn't apply though

I'm like 1 2/3... I just forgot to do the educating part, in point 2

[Doobs]

Few thoughts

20s it is probably ok to pay off debt/enjoy yourself.  Would always pay into a pension if your employer has one.
30s I'd save pretty hard.  Either deposit or ISA/Pension.  It doesn't get easier if you have kids.
Don't think the skills you get in your 20s set you up.for life.  The World moves, skills become obselete.  Always try and improve yourself, retrain etc.
Don't do anything that you think is likely to make you unhappy.  If you think your career/life is getting stuck somewhere, move now.
You are likely out of luck with property right now.  Others were lucky in the past, but the World moves etc.

I'm kind of aiming for 20k+, but the sums you have to save are enormous, and most will get nowhere near.  I am not convinced I'll be capable of skilled work at 67, so best get my finger out.

[Woodsey]

Few thoughts

20s it is probably ok to pay off debt/enjoy yourself.  Would always pay into a pension if your employer has one.
30s I'd save pretty hard.  Either deposit or ISA/Pension.  It doesn't get easier if you have kids.
Don't think the skills you get in your 20s set you up.for life.  The World moves, skills become obselete.  Always try and improve yourself, retrain etc.
Don't do anything that you think is likely to make you unhappy.  If you think your career/life is getting stuck somewhere, move now.
You are likely out of luck with property right now.  Others were lucky in the past, but the World moves etc.

I'm kind of aiming for 20k+, but the sums you have to save are enormous, and most will get nowhere near.  I am not convinced I'll be capable of skilled work at 67, so best get my finger out.

Paying into a work pension up to the maximum your employer matches it to should be the minimum requirement for everyone, you are simply losing money otherwise. Isn't this compulsory these days? Think it might be now....

One thing I will say is you don't miss money you never had unless you are at the bottom end of the pay scale. I have forced myself to increase my pension payment at least 1% every year for the last 10 years or so (sometimes more) and my pay rise will always be more than that, I've never missed those extra contributions because I've never had that income go into my bank.