Britain’s youngest Personal Finance Society Fellow is encouraging other young Brits not to bury their heads in the sand regarding their finances – especially their pensions, as they could be missing out on £90,000 from their employers.
Following some of the year’s top trends on social media, Kristian Manton wants young people to start Pensionmaxxing.
He explained that Gen Z, born between 1997 and 2012, could potentially double their retirement fund by doing this, and it may cost them as little as £1.70 per day.
Using a working 22 year old earning £25,000 salary as an example, the advisor noted if they contribute the minimum under automatic enrolment, and their employer does the same, they’re looking at a total of £120,000 in retirement by the age of 65.
While this seems like a substantial fund, the yearly income for a basic retirement lifestyle is currently sitting at £107,800.
Instead, the Chartered Financial Advisor at Octopus Money recommended increasing their contributions to 7.5%, or an extra £52 a month, could grow their pot to £210,000 if they get their employer to match it.
Even in a worst-case scenario where your employer won’t match your contributions, Kristian highlighted that this move could still add an extra £38,000 to your retirement pot.
The expert explained that this Pensionmaxxing technique begins by finding out if your employer matches pension contributions, and then increasing your contributions as much as possible.
However, he cautioned against investing too much as you won’t be able to access these funds until you’re in your late 50s, which is three decades away for his oldest audience. He’s committed to helping his fellow Gen Z understand their finances better.
He stated: “It’s a golden opportunity that many people overlook, but it could potentially add tens of thousands to your retirement pot with just a small increase in what you’re already putting away.
“Pensions remain one of the safest ways to save for your future, so if possible, it’s still worth maximising your contribution even if your employer doesn’t match beyond the standard contribution. Like all investments, pensions can fluctuate in value. Make sure you’re prepared for these factors before making any changes.”
He did concede that these simplified examples don’t take into account wage changes over the years, but they illustrate “how powerful pension contributions can be over time”.
Kristian urged: “With some employers offering matches up to 10%, not taking full advantage is like leaving free money towards your future income on the table. If you’re unsure what your options are, reach out to your HR team and find out exactly what you’re entitled to. A quick conversation today could mean a much larger pension pot tomorrow and the peace of mind that comes with knowing you’re set up for the future.”
