A Workplace Pension is a type of pension that’s set up for you by your employer. With a Workplace Pension, a percentage of your pay is put into a savings pot every month. In most cases, your employer also adds money into the pot too, on top of your salary. The earlier you start, the more you will save and the longer your savings will have to grow, all thanks to the power of compound interest.
Compound interest helps your savings work as hard as possible. It’s a way of earning ‘interest-on-interest' on your savings. Put simply, that means the interest you earn on your savings, starts earning interest too! This interest-on-interest can make a big difference to how much your savings are worth over the long term.
For example, someone who starts saving at the age of 21 and then stops at 30 could end up with a bigger pension pot when they retire, than someone who starts saving at 30 and doesn’t stop until their retirement. Or alternatively, think about compound interest like a snowball. The longer a snowball rolls downhill, the bigger it gets. The further down the hill you start rolling, the harder it is to catch up.
“My Workplace Pension is brilliant because sed do eiusmod tempor incididunt ut labore et dolore liqua.”
Marcus, 18, Student
Even if you haven’t started your Workplace Pension yet, we have a range of resources to help you in the future.