I first saw this photo a few months ago on a finance forum in a thread about starting a pension fund. The thread starter was roughly my age and asking whether he should begin saving into the company pension scheme. The details were roughly that the company would double his own contributions at 4% salary sacrifice.. however like most young people there was the constant draw of nights out and flashy gadgets all battling for a slice of his income pie. Amongst the discussion of ‘Why you should join the scheme’ was a poster who simply replied:

“This is why...  “

I saw this and it literally sent shivers down my spine. More powerful than an essay or graphs showing the expected return on investments. More valuable than demonstrating a predicted retirement income level.  Perhaps even simpler then the usual “it’s free money from your company” argument so often used.

Here, in perfect and respectful visual form was the reason why I save for retirement.

Obviously I don’t know this man. I don’t know his background or beliefs. There’s a chance he might be one of the lucky few who genuinely love their jobs and look forward to going into the workplace everyday.. however if I were to place a bet; would I bet that this man wants to stand all day by a draughty door instead of spending time with his grandchildren and enjoying a work-free retirement? I doubt it.

Can you afford NOT to save?

It seems almost every week in the news we hear of companies going under and employees being consulted on redundancy. I love the irony of the use consulted, knowing full well that for the vast majority of those affected it will be a 1-way discussion ultimately resulting in them becoming unemployed while still requiring an income. I wonder just how many consults will go along the lines of:

Boss: Well Mr Jones, Unfortunately due to economic down turns we’re having to let a proportion of the workforce go. Don’t worry.. You’ll still get the minimal legal redundancy payment that we can get away with.. That should keep you going for a few weeks.

Mr Jones: Not to worry boss, I’ve already saved a decent emergency fund and have much more tucked away in the stock market. Luckily with my pension fund I’d have been able to retire soon anyway so really only need to bridge a small gap.

Perhaps not many.

Back at my last employer there were frequent redundancy announcements with the UK workforce shrinking by 70% in the 5 years I was there. The threat of redundancy was very real and it scared the hell out of me. In my mind, the question was never if I could afford to save.. but whether I could afford NOT to save. Saving for a house deposit, saving for an emergency fund, saving in a pension and saving in shares. All of it became more important than spending £100 on a night out or buying the latest iPhone.

Why do you save? Is it for a big holiday next year or a new car? Or is it something more?

I save because I don’t want to lose sleep over being made redundant, I don’t want to be at the mercy of a huge house price increase and especially because I don’t want to be forced to stand next to a draughty door instead of playing with my grandchildren.