I’m saving into a pension at 17 through my holiday job – I want to retire at 60

In our Pension Diaries series, we speak to people of all ages in the UK to find out how much or how little they have saved for retirement and the realities of putting money aside for your future. This week, we speak to Mimi Vinall, 17, who lives in Shoreham-by-Sea in West Sussex with her parents. Mimi, who is in her second year at college, recently started saving into a pension through her holiday job. She says for most young people, pensions are too far away in the future to think about. However, she decided to join her work pension scheme after realising starting early with a small amount can snowball into a huge figure in the future. Tell me about your education and part-time job I have just gone into my second year of college and I am studying fine art, history of art and film studies at A-Level. During the half terms and school holidays, I work at a private school where they use their facilities to run holiday clubs for school age children. I help out as a camp member by assisting in art classes and looking after the children. Over the summer, I was working there about three days a week. I will now work there next over half term when I am not in college. Shorts How did you end up joining the pension scheme? At the age of 16 or 17, most people don’t even think about joining a pension, even if they have a job. If you are aged 22 or older, you are automatically enrolled into a work pension scheme unless you opt out – but if you are younger, you are not automatically enrolled. However, you can still join a workplace pension from the age of 16 – but I don’t think many people my age realise this, or if they do, they don’t take it up. When I started working at the summer holiday club in June, my work sent out a letter asking if I wanted to join the workplace pension scheme. I showed it to my mum, who has her own business and knows a lot about pensions, and she encouraged me to join. I had to opt into that pension and if it hadn’t been for my mum and the knowledge she taught me, I probably would have put that paperwork to one side and not given it much thought. After she had explained how pensions worked, it seemed a no-brainer. It does not take a lot of money out of my pay cheque and is a smart thing to do as I put money in and my employer matches it. I am putting in 5 per cent of my wages into the pension scheme and my employer is matching it by putting another 5 per cent in. And then I get tax relief on that money too. So in August, I earned £800 by working at the holiday club and £40 of my wages went into my pension and my employer put in £40 too, so £80 went into my pension pot. That is not an average month though as I usually only work half terms and school holidays, so my next pay will be in October and be a lot less. What have you learnt about pensions and how they grow? When I was at school, I didn’t really learn about pensions as they only vaguely brushed over it, so my knowledge about pensions has mainly come from my mum as I heard her talk about it and then I did some more research into them. I have realised you are better off putting money into a pension from a young age as even if I put in a little now, it will grow a lot more over time because of compound interest. Starting putting into a pension at this age also means that I will get into the habit of doing it, which will help me in the future as it is the right thing to do. Mimi has calculated that even if she stopped investing in her pension around the age of 40, compounding could lead to an over £500,000 pot What figures do you have in mind for your pension goals? It is quite difficult to know a target for retirement at this stage in my life, but I know the more I can save into a pension, the better things will be for me when I am older. My mum did some number crunching with me with a pension calculator and I was amazed at how putting in even a small amount into my pension from an early age can make such as difference due to compounding. We worked out that once I start earning properly, even if I invested £200 a month into my pension – £160 from me and £40 from the government in tax relief – for 20 years, I would have £79,358. Even if I then contributed nothing to my pension for the next 20 years, I would still have £210,561 thanks to compound growth. However, I want to contribute more than that into my pension once I’m working full-time after education – and there will hopefully be an employer’s contribution too. We calculated that if I put in £500 a month into my pension – £400 from me and £100 from the Government, in 20 years time, I would have £198,395 in my pension pot. This is all based on five per cent growth a year. Even if I then contributed nothing more for another 20 years, compound growth would make it £526,402. It is amazing. Why do you think most young people do not think about pensions? People my age can’t even imagine retirement so they don’t worry about it now because it is so far off in the future. But if you start investing in a pension at a younger age, it gives it more time to grow and will give you more options in later life, such as if you take a career break, as your money will keep working for you. However, when people are young, pensions and retirement feel so far away and there is already so much else to think about, such as going to university, saving for your first house or flat. People don’t think about pensions so early on because it doesn’t feel as necessary now. From researching the issue, I have found that a lot of young people fear there might not even be a state pension in the future. But I think if they did start saving into a pension now, they wouldn’t have to worry as much as they would not need to rely on a state pension. What are your dreams for a career and retirement? After college, I want to do an art foundation course, but after that, I’m not sure as there’s so many options. I want to have a career in something I enjoy and I love art history, so maybe something in conservation or restoration would be good. I would also love to do a lot of travelling and explore south east Asia, China, Mongolia and Kazakhstan. I think I’d like to retire around the age of 60 and I think starting my pension young will help me achieve that. I definitely think I am in the minority of 17-year-olds putting money into a pension. As I’m young, at the moment, I use the rest of my money for enjoyment. But I am safe in the knowledge that at least I am putting a bit into my pension and my employer is contributing as well. Would you like to be featured in Pension Diaries? E-mail: Aasma.day@theipaper.com