How to save for a pension… and everything else

Planning for retirement

As a young professional, a near future of house buying, travelling and piggy banking awaits you – but do you ever feel like your pension is getting in the way?

Saving for retirement in your twenties is about balancing the everyday with the far future. So while it’s ideal for you to put as much money as you can into your pension, you could also be sacrificing your immediate wants and needs for a richer retirement.

Here, we look further into the ways of achieving those immediate wants and needs, and how to consider them alongside a comfortable retirement:

Keep a rainy day fund

On average, UK adults save around £171 a month.¹ It’s possible that, if your social life allows, some of these savings could find their way into an emergency pot. If you contribute whatever you can to a rainy day fund, this spare money could pay for financial disruptions like a damaged car or a broken boiler.

Have savings to be excited about

According to a 2018 study, the average savings balance is around £4,212.40 for those who save regularly.² Although saving isn’t so thrilling in the moment, it can be when you know it’s going towards a house deposit, a tropical adventure, a brand new car, or anything else belonging to your childhood dreams.

From spare pennies to half your monthly wages, you can choose to keep your savings in places like homemade piggy banks, bonds or ISAs (Individual Savings Accounts). Depending on how far you want your money to go or how long you plan to save for, you might also want to know the pros and cons of saving and investing.

For an introduction into the world of financial planning, why not have a look at our quick video guide to savings vs investments?

Babysit your earnings

After years of living as student, your life as a foundation dentist can come as a bit of a salary shock. If you feel overwhelmed by the sudden financial responsibility, you’re not the only one – figures show that two-thirds of 21-37 year olds wish they knew more about how to handle their finances sooner.³

To find out more about how to manage your money, have a look at our page on financial planning for young dentists.

Keep savings close, but your Income Protection closer

If you become ill or injured and unable to work, could you survive without your salary? You will already know that Income Protection is a must-have for young dentists. After all, emergency funds don’t last long and savings are meant for something special.

We understand that this is a standard policy in your profession. Find out more about the discount you’re entitled to when you buy an Income Protection policy through us online.

Think in the short, medium & long-term

Our advisers speak to many young dentists who want to travel, buy a house and buy into a practice – mostly before they hit their 40s.

Think about what your own dreams are, and write down all the things you want to achieve in the next 5, 10 and 15 years. This might include buying a house, going travelling or starting a family – it entirely depends on you. Take a look at that list and begin to prioritise.

Hopefully, that list will turn into a bit of a financial plan. That plan will give you a better idea of how to balance your everyday delights with the prospect of a happy retirement.