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How does it affect your pot?

It’s simple. The earlier you start saving, the better. And the longer you keep your savings locked away, the more chance they have to grow. Some people say that for each ten years earlier that you start saving, you could double your pot’s potential growth – giving you twice the amount of money to support you in the future.

Think about it like a snowball rolling down a hill. The higher the snowball starts rolling, the more snow it picks up and the larger it’ll be. Starting halfway down the hill means it won’t grow to the same size.

In real terms, that means someone who starts saving at age 21 and stops at 30 could end up with a bigger pension pot at retirement than someone who starts saving at 40 and doesn’t stop saving until age 65.

What if you’ve only just started saving?

There are many reasons why you may not have been able to save into a pension earlier, and that’s okay. There’s no bad time to start saving into a pension – and the best time to start is when you’re ready. Any steps you take now will help you in the future.

The important thing is that you’re able to save regularly over time. Explore our useful resources on saving into your pension, wherever you are on your journey.

Why you should start saving early

Let’s take 2 Nest members, Malik and Sam, as an example. Both Malik and Sam have £200 contributions going into their pension pot every month, which includes their contribution, their employer payments and tax relief. If these monthly contributions were paid for 10 years, that adds up to £24,000 each. The only difference is that Malik made his contributions between the age of 22 and 32 while Sam made hers between 32 and 42.

Assuming we invested and grew their money by 5% every year until the age of 60, the results would be very different. Even though they paid in the same amount Malik would have nearly £125,000 but Sam would only have around £77,000. That's because by starting to save earlier, Malik gave his savings an extra 10 years to grow. The graph below helps to demonstrate this.