Right Time to Start a Pension?
By Marc Westlake
Published on: October 6, 2022
Most articles of this nature, around the world, will talk about starting your pension early and the benefits of compound interest.
Whilst that’s mathematically true, it’s not the right answer for everyone. I think we need to say that the number one priority for everyone should be to buy a house.
Those on lower salaries should always prioritise buying a house over saving in a pension. Interfamily loans to facilitate this, if they are a possibility, make perfect sense for both generations.
The reason being that rent is paid from post-tax income. Therefore, not having to pay rent is ‘earning a return’ at your top rate of income tax, your own house is free from capital gains tax and you can rent a room tax free.
Close to retirement but at a loss about your retirement options?
Download our guide NOW to learn how to get the best out of your retirement funds.
We reveal:
- How you can shore up your personal security by investing wisely,
- Why you could lose out BIG if your money is not in the right place,
- Ways to turn your success into MASSIVE wealth so you can lie back and relish your retirement.
Don’t miss out!
Future-proof your finances RIGHT NOW – Download our Approaching Retirement Guide.
So logically, young people should borrow, or be gifted the house deposit from their parents, as soon as possible and buy a house as soon as possible.
They should buy a two-bed property, at least, and rent out the second room. This income will help to pay off the mortgage or pay back the family loan if one was received.
The goal should be to save in the property by overpaying the mortgage, this reduces the loan to value.
Recommended Reading:
Aged between 20 and 55 and clueless about pensions?
Download our guide NOW to demystify how to save for your future.
You’ll learn:
- How investing in a pension TODAY will skyrocket your finances TOMORROW,
- Expert Tips and Advice from industry leaders with DECADES of experience,
- Concrete ways to save yourself money NOW by investing in a tax-efficient pension fund.
Don’t get left behind!
Future-proof your finances RIGHT NOW – Download our Retirement Planning Guide for Gen X, Y, and Z.
