Don't delay – start saving for retirement today

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Grand parenting

When today's retirees bought their first home, they would have expected to have had the mortgage paid and the kids off their hands - at least financially - by the time they hit their mid-40s. In many cases, it was after those things were done that they intended to start planning their retirement.

But the average age of buying a first home – never mind starting a family – has been rising steadily. As a result, those approaching 60 may find that mortgage debt and family costs have seriously undermined their plans for retirement saving.

Are we there yet?

Though many of us dream of early retirement, the reality for the majority of us is that we might not be as close to being ready for retirement as we might have hoped, even at the age of 60 and debt can be a worry for many.

At the end of July 2016, UK debt stood at £1.496 trillion, up from £1.444 trillion 12 months before, according to The Money Charity. That’s an extra £1,028.50 per adult in the UK.  

Our Golden Age of Retirement report shows that whatever age you are, starting to save can be challenging, particularly when it’s for your retirement.  

Bad news for millennials

Those in their 20s and 30s may consider putting off pension saving until they’re free of current financial pressures like student debt, getting on the housing ladder or starting a family. In reality, that day might never come. Gone are the days that mortgage payments and family commitments are limited to those under 45. Those over 45 will continue to find reasons not to save, with only 15% of men and 9% of women saying they have no barriers to saving more. (Aegon Research, ‘Making up is hard to do’)

And it won't get any easier. A report from the Institute for Fiscal Studies says that today’s 30-somethings will find it harder to amass wealth in the future as they are saddled with greater student debt and will be paid less than the previous generation.

A little and often

It may seem pointless, but saving modest amounts from an early age isn't just about getting into the saving habit. The returns – the interest on the money you save or the performance of an investment fund – have the potential to build to provide a solid foundation for saving more in the future. Remember, investments can go down as well as up depending on market performance.

If you delay, you will have to pay in large amounts to build a similar fund, whereas committing a little extra when you get a pay rise or a windfall can also make a huge difference after 20 or 30 years. 

It's difficult to start saving for the future when you’re still facing debts or family commitments. By regularly reviewing what you can and can't afford to save, you'll be able to plan going forward and budget more effectively. 

You’re not alone 

If you can’t do it alone, consider getting some guidance from an adviser. You may even find you have access to a service through your employer that will, in confidence, take a look at your finances and suggest where you might be able to save. 

Although it might be hard to picture what your retirement might look like, it’s certainly worth thinking about. So, the question is, if you haven’t started saving yet, can you really afford not to start now?