Age Under 40

If you are under 40, the value of your retirement fund may not be high on your list of priorities.  However, it should be!

We all know the statistics, due to medical and lifestyle changes we are all living longer.  That means you need a larger fund to sustain you financially through your retirement.Invest

When should you start investing in a pension fund?

Immediately when you start work!

How much do I need to invest?

The simple answer is “as much as possible as soon as possible”.  The tax man will help you along the way with generous tax relief on your pension contribution.  The simple rule of thumb is to invest an amount equal to half your age.  Yes, half your age.  So if you are 40, then your contribution rate should be 20% of earnings.

You can get tax relief on these contributions as follows:


  • Under 30 years – 15% of Net Relevant Earnings
  • 30-  39 years     –  20% of Net Relevant Earnings

As pensions are designed specifically for retirement, they offer a number of advantages that other savings plans don’t.

  • The money you pay in benefits from tax relief.
  • You can’t access your pension until at least age 50, so no temptation to dip into them early.
    Your money grows in a tax efficient way as no capital gains tax applied to growth.

We’ve based these details on our understanding of current taxation law and practice. They might be affected by any future changes in legislation.

For advice on planning for your retirement: Contact Future