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One of the most crucial concepts in personal finance is the power of compounding. Lisa illustrates this with a compelling example: for someone starting their career at age 25, an increase of just 1% in pension contributions could translate into an additional £72,000 by retirement. This modest weekly contribution of merely £6 proves to have an immense impact on the retiree's financial stability, showcasing how small adjustments can accumulate significantly over time.
For those aged 35 earning £45,000, contributing an extra 1% (£9 a week) could yield an additional £58,000 in retirement. Even for higher earners, a little sacrifice can go a long way; a 1% increase for someone making £100,000 amounts to £59,000 extra in retirement savings, costing only £20 a week.