Why Starting Your Pension Young During Market Volatility Is a Power Move

Why Starting Your Pension Young During Market Volatility Is a Power Move

7th July 2025

When the market is swinging wildly and headlines scream uncertainty, it’s easy to think, “Maybe now’s not the time to start investing in my pension.”

But here’s the twist: starting your pension young, especially during market volatility, is one of the smartest financial decisions you can make. Here’s why:

  1. Time Smooths Out Volatility

Markets rise and fall. It’s what they do. But if you contribute to your pension regularly over time, you benefit from euro-cost averaging.

This means you’re buying into the market at different price points. Over time, this helps smooth out the highs and lows. Over decades, this strategy can reduce the impact of short-term dips significantly.

  1. Compounding Loves Time

The earlier you start, the longer your money has to grow. Thanks to compound growth, your pension doesn’t just earn returns on your contributions—it earns returns on the returns.

Starting in your 20s instead of your 30s could mean ending up with double or even triple the amount by retirement.

  1. Volatility Becomes Less Scary

When retirement is 30 or 40 years away, you have time on your side. Short-term drops in the market become less significant because you can ride out the downturns and benefit from eventual recoveries.

History shows that long-term investing delivers strong results, even with some volatility along the way.

  1. Start Small, Grow Big

You don’t need to start with large amounts. Even modest contributions made consistently from a young age can grow into a substantial retirement fund, thanks to the magic of time and compounding. It’s a marathon, not a sprint.

On the other side of the coin, contributing larger amounts while you may have less financial commitments could be worth your while, with the option of reigning those contributions in slightly with the big life commitments start to kick in.

Getting a head start on your pension gives you more options later. Whether it’s retiring early, contributing less in your later years, or just having peace of mind, an early start gives you freedom and control.

  1. Employer Contributions = Free Money

If your workplace offers pension contributions, starting early means you’re taking full advantage of what is essentially free money. These contributions are part of your salary package and by not maximising this you are essentially leaving this free money on the table.

The earlier you begin, the more of that benefit you accrue. It’s a no brainer.

  1. Builds Financial Discipline

Developing the habit of saving early instils financial discipline. It helps you live within your means and puts you in the right mindset to make smart money decisions throughout life.

Market volatility might seem like a reason to hold off on starting your pension, but in reality, it’s a great reason to begin. The ups and downs are part of the journey, and starting young allows you to harness them to your advantage. Don’t wait for the ‘perfect’ moment to start your pension, it doesn’t exist.

The best time to start was yesterday. The second best time? Today.

Book a consultation with us today, your future self will thank you.

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