Discussions around pensions surely isn’t something we should be focused on as young 20-somethings, right?! Well, actually that’s wrong! Many of us don’t bother thinking about such important life factors as they are usually associated with ‘adulting’. When in reality, there is no better time like the present to get focused on the keys to an amazing future.
We focus on 4 areas we should all be paying close attention to, right now, not later!
Credit Score
You must’ve seen all of the adverts regarding credit score and probably ignored them thinking it’s not something to worry about at 22 (or 19, 23 or even 27!) Most of us are unaware that we have already contributed to our credit score, either positively or negatively. Paying your phone bill on time, student loans or any direct debits or bills you have are all marked against your credit score. Having good credit is the key to getting credit cards, loans and mortgages. Overall, your financial health will determine just how much (or little) banks are prepared to lend you in the future.
But how do you build up credit? If you own a car, insurance repayments (providing they are paid on time) will allow your score to be increased. A good way to build up credit also is to take out a credit card. As amazing as credit cards seem, be sure to not take out a card with crazy annual percentage rate (interest) or an unattainable limit as it’s up to you to pay it back. Only use a credit card for things that you know you can afford to pay back or else there can be long-term complications.
TOP TIP: Registering to vote can improve your credit score! Ensuring that your credit report includes your electoral roll details. Lenders will use such information as confirmation of your details (name, address, previous residence)
Moving out: What are your options?
People leave home at different ages so don’t feel pressured to move out, especially if all of your friends have already flown the nest. But it is worth thinking about and planning towards. With an entry-level salary for a fashion workie averaging at 18’000 per year, you’re probably feeling like you don’t have many options.
Even so, it’s worth booking an appointment with a mortgage advisor at your local banks to start asking questions and planning towards your future.
Whether or not you have the money right now, there are a few decisions that should already be making? Do you intend to rent/flat share or become a homeowner? Is there a time limit for when you’d like to move out of your parents’ place? What are the rent prices/mortgage rates for your ideal area?
Being mentally prepared is the first step in any big decision process and will boost your confidence is actioning the other steps.
Pensions
It’s not complicated! Yes, it is worth contributing to as early as possible! No – You don’t earn too little (over £10’000 per year).
Pensions are usually associated with 60-somethings but it’s never too early to start paying into your retirement fund. Even if you have a part-time job at the moment, the small percentage (a minimum of 1%) that is taken won’t have a dramatic effect on your take-home salary and is a great way to start contributing to your future. Many young people don’t think it makes sense to pay into their pension as they aren’t earning a significant amount but thanks to the workplace pension scheme, employers do their part in adding to your pension plan too.
As most employers have an automatic enrolment scheme you won’t have to worry too much about it but be sure to check and arrange a meeting with HR to find out the details of your plan.
Earning potential
There’s nothing wrong with researching your options for earning more money. Millions of people feel that they aren’t getting paid what they are worth but aren’t comfortable enough to speak up and ask for more. It is a very daunting process especially as there is a chance that you won’t get the pay-rise you were looking for. But before requesting a meeting with your manager to go over your annual pay review, be sure to do research on the maximum that you can earn in your position. Along with doing the research, ensure that you are fulfilling and exceeding what is expected of you over a period of time. Constantly stay aware of what it takes to progress and move up the ladder in your job. Higher positions usually mean more money, but don’t underestimate the work that will come with it.
