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For Bob, I have assumed that he
- Earns £36k a year
- Contributes 10% of his salary
- His work match his contribution
- Earns 8% return in global equities (stocks)

Essentially, he puts £300 a month into a pension and his employer matches this by putting in £300 also.

This is unreal because by contributing to a pension you are earning a 100% monthly return on your money before it has even had a chance to grow.

In total Bob has only contributed a total of £122,400 over a 34 year period, yet has almost increase his pension pot tenfold!

Pensions powerful because they can let compounding do its magic for decades, which Bob is loving!

In addition, any of your pension contributions are made pre-tax so you don't have to pay any national insurance (NI) on your contributions or when you draw down from your pension pot in retirement.

You don't have to pay income tax on pension contributions, but when you eventually draw down from your pension in your retirement if your annual drawdowns are greater than the tax free allowance (currently £12,570) you will be liable.

I can tell all this pension chat is getting you turned on. Make sure you know how much your employer is willing to match your contributions by and then up your contributions to the max you can afford.

DON'T contribute more than your employer is willing to match you by as the main benefit is the fact that your employer will match your contributions (ie if your employer will match your contributions up to 10%, don't pay into your pension more than 10%).

Don't be a Sarah, be like Bob.