People born before 2012 could 'double' pension fund with £1.70, expert says

Britain’s youngest Personal Finance Society Fellow is urging other young Brits not to hide their head in the sand when it comes to their finances - particularly their pensions as they could be missing out on £90,000 from their employers. Following suit from 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 on £25,000 salary as an example, the advisor noted if they contribute the minimum under automatic enrollment, 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 hefty fund, the yearly income for a basic retirement lifestyle is currently sitting at £107,800. Instead, the Chartered Financial Advisor at Octopus Money recommended upping 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 noted this move will still add £38,000 extra to your retirement. The expert noted this Pensionmaxxing technique starts by finding out if your employer is matching pension contributions, and then topping up your contributions as much as you can.

He warned people against investing too much as they won’t be able to access this fund until they’re in their late 50s, 3 decades away for his oldest audience as he’s determined to help his fellow Gen Z get to grips with their finances. He added: “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 admit these simplified examples don’t factor in wage changes over the years, but proved a point in “how powerful pension contributions can be over time”. Kristian pleaded: “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.”