These days, it’s hard to listen to the financial or economic news for long without hearing something about pensions. These news stories usually give us some bad news about the pensions shortfalls in the gaping holes in pension funds. The chancellor Gordon Brown has recently gone on record suggesting that he is in favour of increasing the working age, and the debates about whether to link state pensions to earnings or inflation rages on. The bottom line is that people are spending too much, and saving too little for the future. It can be seen in all aspects of life, from consumer debt levels to corporate pension provisions to government statements about the future funding of pensions.

If you want a prosperous retirement, it looks like to only way to guarantee it, is to save the money yourself and provide for your own pension. The amount you receive during retirement is all down to you and the basic principle is that the more you save now, and the sooner you start saving in life, the better off you will be in old age. No one wants to spend their whole life working hard, just to end up struggling in their old age with an inadequate pension. This is the time that many people look forward to as a long awaited break and a welcome reward. It can be a great opportunity to do some of the things you never had the chance to when you were younger and busier, like travel, take up new hobbies and spend time with friends and family. But you must have the money put away in advance.

The earlier you start saving the better. It’s been said before but it is the single most important tip in all pensions advice. Because of compound interest and rates of cumulative saving and investment growth, money saved when you are in your twenties will be worth an average of four times as much as money saved in your forties. Or put another way, saving £300 a month in your twenties for you pension, is equivalent to putting in £1,200 a month when you are forty. Therefore, it really is good value to save early. Of course this will all depend on your own personal circumstances but if at all possible, try to start saving for your old age while you are still young. Not only will it mean a secure and prosperous retirement, but also poverty when you are young is still far more fashionable than poverty in old age.