When you’re in your 20s, retirement probably isn’t at the top of your priority list. Between starting your career, saving for a home, travelling, and enjoying life, putting money aside for something 40 years away might not feel urgent.

But starting a pension early can be one of the most valuable financial decisions you make. And the good news is, you don’t need to contribute much to get started.

Why Starting Early Makes Such a Difference – Time Is on Your Side

One of the biggest advantages of starting a pension in your 20s is time. The earlier you start saving, the longer your money can grow through compound investment growth.

Put simply, this means your pension savings can earn investment returns, and those returns can then generate further growth over time. Even relatively modest contributions made consistently throughout your working life can make a significant difference to your retirement savings.

Of course, investment returns aren’t guaranteed, and pension values can rise and fall.

Starting at 25 Versus Starting at 35

To see the potential benefit of starting early, let’s look at two people who both save €150 per month into a pension.

One starts at age 25 and continues until 65. The other waits until age 35 but also contributes until 65.

Assuming an illustrative annual investment return of 5%, compounded monthly, here’s how their pension savings could compare:

The Advantage of Starting Your Pension 10 Years Earlier

That’s a difference of approximately €104,000 simply by starting ten years earlier.

What’s particularly interesting is that the person who starts at 25 contributes just €18,000 more over their working life, yet could potentially have around €104,000 more in their pension fund at retirement.

It shows how valuable those extra years of potential investment growth can be.

Illustrative pension growth calculations based on €150 monthly contributions and an assumed 5% annual return, compounded monthly, over 30 and 40 years. Figures are rounded and exclude charges, inflation, tax effects and employer contributions. These projections are for illustrative purposes only and do not represent actual Irish pension fund performance. Investment returns are not guaranteed.

Make the Most of Pension Tax Relief and Employer Contributions

Another important advantage of pension saving in Ireland is the tax relief available on eligible personal contributions.

Depending on your circumstances, you may qualify for income tax relief at your marginal rate, subject to Revenue limits. For example, if you pay income tax at 40%, a €100 pension contribution could effectively cost you just €60 after income tax relief.

If you’re starting your first job, it’s also worth checking whether your employer offers a company pension scheme. Some employers will contribute to your pension alongside your contributions, helping you build retirement savings faster.

For example, you might contribute 5% of your salary while your employer contributes an additional 5%. It’s worth understanding how your employer’s scheme works and whether you need to contribute a minimum amount to receive the full employer contribution.

Start With What You Can Afford and Build From There

You don’t need to have everything figured out before starting a pension. Beginning with an affordable monthly contribution and reviewing it as your salary increases can be a sensible approach.

As your career progresses, your financial circumstances and priorities will naturally change. You might be saving for a house, starting a family or taking on other financial commitments, so your pension must continue to fit your circumstances.

A pension shouldn’t be something you set up once and forget about. Reviewing your contributions and investment choices regularly can help you stay on track towards your longer-term retirement goals.

Your Future Self Will Thank You

Retirement might seem far off when you’re in your 20s, but the decisions you make today can have a lasting impact on your financial future.

The earlier you start, the more time your pension has the potential to grow. And even if you can only afford to start small, taking that first step can make a meaningful difference over the years ahead.

Whether you’re starting your first job, joining a company pension scheme or considering setting up a personal pension, professional financial advice can help you understand your options and make informed decisions.

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Stephen Donnelly, QFA, RPA, is the Director of Donnelly Financial Planning. He works with individuals, families and business owners, helping them make informed financial decisions at every stage of life. His advice covers retirement, pensions, savings plans, investment planning and financial protection, with a focus on each client’s individual circumstances and longer-term goals.

Further Information and Sources

Royal London Ireland – Media Q&A: Do I Really Need to Start a Pension in My Twenties?
Read the Royal London Ireland article
Royal London Ireland – Original Media Q&A (PDF)
This blog draws on the broader educational themes discussed in Royal London Ireland’s October 2026 article on the importance of starting pension savings early. Royal London’s article was originally published in The Sunday Business Post on 18 October 2026.

Important Information

This article is for general information and educational purposes only and does not constitute legal, tax, investment, pension or personal financial advice.

The information was considered accurate at the time of publication but may not reflect subsequent changes in legislation, taxation or pension regulations.

Pension investments can fall as well as rise in value. Tax relief is subject to individual circumstances and Revenue rules. The examples provided are for illustrative purposes only and are not a guarantee of future returns.

Donnelly Financial Planning Ltd is regulated by the Central Bank of Ireland (Code C523217)