Pensions are always a very tricky subject for the masses with people not sure when to start, how much to put aside or even what they can expect to receive in retirement. These factors seem to combine and result in many people ignoring their pension planning until very much later in life when it can mean a substantial fall in their income upon retirement. So when should you start your pension plan?

In simple terms you should be thinking of your pension arrangements as soon as you start earning an income. While there are many who believe that a pension should only be considered when you have an established career and your income has grown substantially from the early days, this is not really the case. As more and more company pension schemes struggle to fulfil their obligations it has never been more essential to have your own personal pension arrangements, whether you go for a stocks and shares based long term pension plan, savings plan or some other type of pension, the whole risk / reward spectrum is available to you.

Let’s not forget that even if you are only able to put aside a relatively small amount in the early days, your net contributions will be increased by assistance from the tax authorities, and you may be investing that money for 40 years or more – depending upon when you actually retire. Many people also forget that any income which your pension arrangements produce will also be reinvested into your pension pot, so not only will you hopefully see your initial contributions grow in value over time, but any dividends or income from your pension investments should also grow over time. It is this point which may people seem unable to grasp, the re-investment of income – a very powerful and potentially lucrative element in the longer term.

In summary you are never too young to start a pension plan and even just a few pounds a month can make a massive difference in the long term, and it will also give you experience of saving money – something which could prove vital in later life!