Case Study: The Cost Of Delay

March 26, 2024

Why to start paying into your pension now.

A simple case study to illustrate the difference that waiting just five years can make to a pension pot over the long term.

Bill and Mary, both 30, work for 'Let's Wait Limited' which introduces a pension plan and promises to match employee contributions.


Mary joins the pension scheme straight away, playing £125 per month. (Her take home pay reduces by only £97.50 - thanks to 22% tax relief). The company matches this contribution meaning a total of £250 per month is paid in to her pension.


5 years later...

Bill thinks retirement is a long way off so he waits before joining the pension scheme. Five years later he also decides to pay £125 per month into the pension which is matched by the company to make a total of £250 per month.


20 years later...

Bill's pension pot is now worth £92,908

Mary's pension pot is now worth £129,935 (nearly 40% more!)



Over a 25 year period, waiting five years to start paying into a pension resulted in a 40% difference to the value of Bill's pension pot compared to Mary's. That's with an assumed investment growth of 4% (this could be higher or lower) and without taking into account increasing contributions over the 20 year period. In summary, the sooner you start paying into a pension, the better. 

Don't delay; start paying into your pension now.


Figures based on an IOM Pension, assuming yearly investment growth of 4% net of all fund / pension charges and consistent (not increasing) monthly payments. Tax rules can change. The value of an investment is not guaranteed and can go down as well as up depending on investment performance. You could get back less than you invested. This example is for illustrative purposes only. You should review your needs with a financial adviser before investing.