Advisers believe the three most important financial planning activities, of saving for retirement, buying a house and saving for the future should all start before a person reaches the age of 26, according to research from Prudential.
A survey of 100 advisers revealed if people haven’t put the basic building blocks of financial security in place before the age of 30, they could face a lifetime of struggling to catch up.
The research claims advisers believe you should start a pension by the age of 22, buy your first house before you’re 25 and start to build up savings by the time you reach 26.
But Prudential say while this is the ideal view, the reality is rather different, as the average first-time buyer is 34, while the average age to marry, which normally acts as a trigger to sort out finances, is 29 for women and 31 for men.
With this in mind, Prudential says many people who can’t or won’t address their financial futures until its too late look back and regret the wasted opportunities, with a survey of 1,008 adults showing 42% wished they’d reviewed their finances earlier in life, with 25 to 34 year-olds feeling particularly affected.
Roger Ramsden, executive director of Prudential UK, says planning early is key to a secure financial future, but it is never too late to start.
He adds for those who do seem 'past it', there is an awful lot which can be done to improve their financial position, whether that is to pay more into a pension, save more or reduce debts.
Ramsden says: “At the bright young age of 26, many youngsters are not yet fully aware of the benefits that starting a pension and savings scheme can bring. For one thing, few are aware of the significant tax breaks of a pension. It is only later they look back and wish they had acted earlier to maximise their finances.”
Meanwhile, Andrea Rozario, a financial adviser and director of Rozario Harris, thinks people are not saving because they have a ‘live for the day’ attitude.
She says “When you think back to our grandparents’ generation, the mindset was very much if you could not afford it, you did not buy it. With credit cards and loans that are so much easier to get hold of, as well as sophisticated advertising techniques, we seem to have become much more of a consumer society.”
Rozario adds while we can’t turn back the clocks, as a nation we do need to get a grip on our finances by planning earlier, and although it may not be possible for everyone to have started a pension, bought a house and started saving before they’re 30, it should still be certainly on their radar.
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Women and young people adversely affected
A question of selectivity
Watchdog interviewed 13,000 people