Dinah Wolf: what a 21-year-old really thinks of pension saving

How did you approach pension saving when you had your whole life in front of you? Our Gen Z columnist spells out her investment plans for old age.

I’m 21-years-old and to tell you the truth, investing for retirement isn’t on my radar right now. But should it be? 

Investing for a deposit to hop onto that (pricey) property ladder remains my number one priority. The sooner I buy, the nearer freedom is. After all, I’d much rather my hard-earned cash went toward paying off my mortgage than in filling someone else’s coffers. And, since a home will most likely be the most expensive purchase I’ll ever make, I need to make sure that I’m well prepared! 

I try to keep my expenses to a bare minimum. The majority of what I earn as a student (which, as you can imagine isn’t too grandiose) goes straight into my stocks & shares ISA so that (when the time is right) I can enjoy every penny of my profits tax-free. Sweet, no? 

My goal is to purchase my very own place at age 30 if all goes to plan and prices stop climbing through the roof (I’m one of the few praying for that 2026 property crash). Then, I’ll cast attention to my SIPP (I’m already contributing to a workplace pension through my future employer’s Asset Management Graduate Scheme). 

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I plan to be invested in equities only for the next 20 years or so, once I’ve started my SIPP. I am comfortable with this level of risk because I’ll have two decades to grow my money and weather any storms. That’s precisely 7,300 days for compounding to work its magic. 

I will invest across regions and sectors to ensure that I am well diversified. I plan to allocate around 10% of my portfolio to individual stocks (my favourite bit!) and will be heavily weighted toward emerging markets and the UK, with not more than 10-15% held in the US. 

Around 2050 (gosh, I’ll be middle-aged!), the great shift will take place. I’ll still keep one-third of my portfolio in growth (you know, the Baillie Gifford’s of the world) but I will move the remaining two-thirds into less volatile areas. 

I’ll load up on REITs (the real estate investment trusts like AEW and Land Securities) and corporate bonds for income. After all, cash now is better than cash later. And, when downturns occur (and they will), this income will help soften the blow. I’ll also increase my exposure to global funds and trusts and defensive stocks to add a layer of diversification (and protection).  

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When it comes to retirement, you want your savings to outlive you (not the other way round) but you also want to be able to enjoy the fruits of your labour (from ocean cruising to dining out). This takes planning and commitment. It doesn’t happen overnight. 

I constantly remind myself that it’s easier to scrimp and scrape when I’m young than when I hit my 40s. So, I prepare for the worst but hope for the best. You never really know what’s lurking round the corner. Who knows what the next decade will bring (good things only, I hope)! 

So, invest as much as you possibly can (while enjoying life, of course) and watch gleefully as your precious nest egg grows, and grows.