27 March 2026
general
From the day you finish school until the day you retire, you will no doubt have several financial priorities to contend with – whether that’s paying the mortgage, supporting your family, or achieving your financial goals.
With so many other financial demands, prioritising pension saving isn’t always easy. But the earlier you start, the greater the opportunity for your pot to grow.
As such, it’s never too early to start planning for retirement. However, it’s also never too late.
If you find yourself behind on your retirement savings goals as you near the end of your working life, rest assured, there may still be time to prepare for a comfortable retirement.
Read on to discover why “now” is always the best time to start saving, no matter your stage of life.
Your pension funds grow through compound returns
Generally, savings held in a pension scheme are invested in a diverse portfolio of assets managed by the pension provider. Over time, these investments deliver returns to boost your pension pot. Those returns themselves are invested, leading to compound gains that generally accelerate your pot’s growth.
Usually, the longer your funds are invested, the greater the chance they will have to grow. So, the sooner you start contributing to a pension, the larger your pot could be by retirement.
Starting early could mean you can pay in less over a shorter period, and still end up with more than if you had waited until later in your career to save.
Equity calculations suggest that saving £100 a month from age 20, and stopping at age 30, could see your fund grow to £367,090.06 by age 60 (assuming 10% annual growth). However, a saver who started at age 30 and continued until age 60 would accumulate a fund worth £217,132.11.
But that doesn’t mean that pension saving is only worthwhile early in your career. Even if you’re just 10 years from retirement, increasing your contributions now could still deliver a significant boost to your pot by the time you start drawing down your pension.
Pension saving could help mitigate your tax bills
Even if you’re close to retirement, paying into your pension is generally a tax-efficient way to grow your wealth.
As of 2026/27, pension contributions up to the value of your annual earnings are usually eligible for tax relief at your marginal rate. In most cases, relief is applied automatically at the basic rate (20%), while higher- and additional-rate taxpayers can claim a further 20% or 25%, respectively, through Self Assessment.
What’s more, investment returns earned within a pension are typically tax-free, helping to further grow your pot and reduce your tax bills.
Finally, earnings between £100,000 and £125,140 a year are typically subject to an effective tax rate of 60% as you start to lose your Personal Allowance. In some cases, contributing to your pension could reduce your adjusted net income to keep you below the £100,000 threshold and avoid the 60% tax trap.
No matter how near or far retirement is for you, saving into a pension could help mitigate your Income Tax bill and enable you to derive more benefit from your income.
Of course, the sooner you start claiming tax relief on your contributions and growing your investments tax-free, the further you could boost your pot. But it’s never too late to get started.
Funds are kept out of reach until your mid-50s
When saving outside of a pension, it can be tempting to access the funds for other needs. Perhaps you want to enjoy the trip of a lifetime, gift some money to a loved one, or upgrade your vehicle.
Generally, funds in a pension are locked away until you reach the normal minimum pension age. This is 55 in 2026, rising to 57 in 2028. Even then, withdrawing funds can be complex if you haven’t yet retired.
By putting money into your pension now, rather than holding onto the funds and contributing at a later date, you can remove the temptation to spend your retirement savings on other things. So, whether you’re 30 years or 10 years from retirement, putting money into your pension could be a good way to protect your financial future.
Focus on what you can do now, not what you wish you’d done sooner
If you find yourself just starting to think about retirement planning later in your career, try not to dwell on any feelings of guilt and regret.
While it’s generally wise to start saving sooner rather than later, you have no doubt been focusing on other financial priorities over the past several years. Rather than dwelling on what you could have done, focus on what you can do now to prepare your finances for retirement.
A financial planner can support you in creating a retirement plan to help you achieve your goals for life after work. From cash flow modelling to pension planning, we can help you identify gaps in your retirement planning and devise a strategy that works for you.
So, whether you’re still a long way from retirement or entering your final years of work, financial advice can help you make the most of your wealth.
Get in touch
For support to get your retirement planning on track, email enquiries@jesellars.co.uk or call 01934 875 919 to find out more about how we can help you.
Please note
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The Financial Conduct Authority does not regulate cashflow planning.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
