Cut down on a few luxuries to boost your pension pot
22 May 2014
Worried about your pension? It’s not necessarily something the younger generation thinks about when they enter the workplace, but it’s still important to consider how your money will work for you in the long run. The National Employment Savings Trust (Nest) has revealed that saving on little every day luxuries such as bringing a packed lunch instead of buying lunch, or working out at home instead of a gym, can help a 30-year-old build up a £225,000 lump sum for their retirement.
Nest calculated that bringing a lunch from home for five days would save an average of £15 per week, which comes to a total of £63,700 by retirement age if invested in the Nest Retirement Date Fund. Passing on one pint of beer or a coffee from your local café could also save £26,600 by retirement age, while buying one less packet of cigarettes would help you build up an extra £31,400. Likewise, quitting the gym would save £36,100, and making dinner instead of grabbing a takeaway would save £50,900 by the age of 68.
So, here some other ways to save you a few pounds in the short term but could reward you thousands when it comes to your retirement?
- Make a list. Shops (and especially supermarkets) are designed to make you want to buy more and purchase unnecessary items. Make a list before you run out of the absolute essentials and stick to that no matter what. Avoid impulse buys like chocolate or magazines at the checkout and only walk down the aisles you need to.
- Buy in bulk. For items such as toothpaste or party supplies, buy in bulk to save money down the track. You’ll be surprised at how much you can save if you buy the larger and cheaper-per-ounce pack. For perishable goods such as meat, dairy products and vegetables, only buy as much as you need, as these will expire quickly if not used.
- Carpool or catch public transport. If you drive to work, consider hitching a ride with a colleague who lives nearby or a neighbour who’s heading in the same direction. Not only will you save on petrol and car maintenance costs, but you’re also helping the environment – a win for everyone!
- Switch off the lights. We often leave the lights, heaters, fans and even chargers on when they’re not in use. Avoid expensive electricity bills by switching them off as soon as you leave the room. Always turn off electronics at the plug socket as well, not just on the actual device.
- Read e-books. Buying an e-reader or an iPad might be a bit costly up front, but if you’re a real bookworm, you’ll be saving in the long run. Most books are cheaper than hardcovers or paperbacks and if you really miss the feel of a paper book, try buying second hand books online.
- Compare prices. It seems simple, but putting in a little extra work when it comes to big purchases could save you a lot of money. There are many price comparison websites and apps out there that will help you make the right choice – and let’s face it, who wants to fork out extra cash for something you could get cheaper elsewhere?
If you have a top tip for saving extra for your pension we would like to hear about it. Feel free to comment in the space below and pass your knowledge on to our blog readers.