Why it might be better to delay saving for your retirement

We are advised to put aside as much as we can as early as possible. But is that always sensible?

When should you start saving for retirement and how much should you put by? The conventional answers to these questions are as soon as possible and as much as you can afford. But the conventional answers may be wrong, according to new research by the Institute for Fiscal Studies (IFS).

It is certainly true that the laws of compound interest mean money invested at an early age will work harder to deliver you a decent retirement income. But saving for a pension doesn’t happen in a vacuum. Money you move into it isn’t available for anything else. And that is potentially problematic.

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David Prosser
Business Columnist

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.