Retirement Planning for Young People in the UK: A Beginner’s Guide
Retirement Planning for young people can feel like a lifetime away when you’re in your 20s or early 30s, but starting to save early can make a huge difference.
Even small contributions now can snowball into a sizeable pension pot over time, giving you freedom and peace of mind later in life.
According to the Money & Pensions Service, people who begin saving in their 20s are more likely to retire comfortably than those who wait until their 40s.
“It’s not about how much you can afford to save- it’s about getting into the habit early”, says Laura Suter, head of Personal Finance at AJ Bell
“Your future self will thank you”
Why Should Young People Plan for Retirement?
Thanks to compound interest, the earlier you start investing in a pension, the more time your money has to grow.
For example, saving just £50 a month from age 25 could result in a pension pot worth over £100,000 by retirement, depending on investment returns.
Retirement planning also sets you up for greater financial independence. It reduces the stress of relying solely on the State Pension, which currently offers around £221.20 per week (2025 rate)—enough to help, but not to thrive.
Your Retirement Planning Options.
1. Workplace Pension
If you’re employed, you’ll likely be auto-enrolled in a workplace pension scheme, where you contribute at least 5% of your salary and your employer adds another 3%.
“Don’t opt out—it’s free money from your employer and tax relief from the government,” advises Martin Lewis, founder of MoneySavingExpert.
2. Personal Pension or SIPP
For freelancers, self-employed individuals, or those wanting more control, a Self-Invested Personal Pension (SIPP) is a flexible option. It lets you choose how your pension is invested, and you still benefit from tax relief.
Tips for Getting Started
- Start small but be consistent – Even £25 a month adds up over time.
- Review your pension annually – Adjust your contributions when your income increases.
- Use a pension calculator – Tools like MoneyHelper help you see how much you’ll need.
- Track old pensions – Use the government’s Pension Tracing Service if you’ve had multiple jobs.
Final Thoughts
Retirement might seem a long way off, but your choices in your 20s and 30s will define your financial freedom later in life.
Whether through a workplace pension, SIPP, or simply saving regularly, taking action now puts you ahead of the game.
Remember: retirement planning isn’t just for older people—it’s one of the smartest moves you can make while young.
Contact us today if you want to set up or review your pension arrangements.
Note: This blog is for informational purposes only and does not constitute financial advice. Always conduct thorough research or consult a financial professional before making investment decisions.
