Pensions: Why it pays to start saving early

There aren’t many pieces of investment advice that are simple, easy and guaranteed to work for anybody, but “start earlier and save more” is one. Surveys consistently show that it’s the top tip that today’s retirees would give the younger generation. Unfortunately, it’s a lesson that many of us learn too late.

That’s because it’s easy to underestimate the difference that an early start can make to your lifetime wealth. To see why, let’s consider the fate of three investors who begin saving at the age of 22, 30 and 40 respectively.

Our hypothetical investors earn the national average wage [...]

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