Most people know they should be investing into a pension. But it is rarely the idea of investing that catches people out — it’s the true cost of waiting to act.

Why do many people put retirement planning off?

It’s inextricably linked to our human nature, and behavioural economics gives us some insights.

Present bias Quite simply, we prioritise what feels urgent today over what matters in the future. Retirement feels distant and abstract. The bills, the holiday, the mortgage — these feel real and demand our attention, now.

The future self problem Research suggests we think about our future selves almost as if they are someone else. Sacrificing spending today for a version of yourself you can barely picture in 30 years is a hard sell.

The paradox of choice Pensions come with jargon and decisions that feel overwhelming. When something feels complicated, the easiest decision is no decision at all — and that inertia quietly costs us.

So what does this procrastination actually cost? Let’s put numbers to it.

The maths: same destination, very different journeys

Let’s say you want to retire at 65 with a pension pot of around £370,000. Based on the Pensions and Lifetime Savings Association (PLSA) Retirement Living Standards, that is broadly enough for a “moderate” retirement alongside a full new State Pension — covering a two-week European holiday each year, eating out regularly, and running a small car.

Assuming annual investment growth of 5% after charges:

• Start at 25: around £240 per month
• Start at 35: around £445 per month — nearly double
• Start at 45: around £900 per month — almost four times as much

The key insight: not all years are equal. A pound saved in your 20s can be worth three or four pounds saved in your 40s, simply because of time. Time is the single most powerful factor in retirement planning.

What does a moderate retirement actually look like?

The PLSA estimates that a single person needs an after-tax income of around £31,700 per year for a moderate retirement. The full new State Pension in 2026/27 is £12,548 per year, so your private pension needs to bridge a gap of roughly £19,150 per year. At a typical annuity rate, a pot of around £370,000 gets you there.

This assumes you qualify for the full State Pension (35 qualifying years of National Insurance contributions) and have no mortgage or rent costs in retirement. Your actual number will depend on your circumstances — but the principle holds: the earlier you start, the less it costs you each month.

The second-best time is now

Starting now is dramatically better than waiting another year. Every month you delay, the contribution you will eventually need gets higher. Every month you start, your money has more time to work.

As the saying goes: if the best time to have started was years ago, the second-best time is now.

Where do you stand?

Retirement planning is one of five areas of a lasting financial foundation that we cover at MoneyMade™ — we call this one “Make It Last”.

Complete the free questionnaire (called CHECK) at mymoneymade.com/check to see all five areas and where you stand across each. It takes a few minutes. And if you want to go further, speaking with a qualified, FCA-regulated financial adviser can help you build a plan tailored to your life.