The pensions opportunity young people are missing out on
The common perception of elite level, world class boxers is that they ooze confidence. While confidence is important, there is a clear line between being confident and reckless.
When I was trading punches under the bright lights in fights around the world, there were moments where my mind would release a surge of confidence. That confidence, when mentally mishandled, occasionally transpired into shots being thrown harder than necessary, drifting into hope rather than discipline in search of a knockout blow.
I would tend to hear the guiding voice from the corner of the ring: “Relax, Delicious, Relax – You got time”.
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At the highest level of boxing, loading a big punch is dangerous. When you put too much into a shot, it becomes telegraphed. A smart fighter only has to wait for a small opening to hit you on the button. One moment of impatience or idleness guided by emotion and the fight goes against you.
When it comes to money and pension planning – investing can seem like a fight.
Fighting for the long-term
Parents and grandparents know too well that for the younger generation, the temptation to swing big is real. Housing costs, inflation and everyday expenses have made building wealth feel like a distant dream for most of Gen Z and HENRYs (high net-worth, not rich yet), housing is the clearest sign of the squeeze. The average house price in the UK is around £300,000, while average full-time earnings were around £39,300, meaning the average home cost roughly 7.6 times annual earnings. Compare that with the late 1990s, when house prices were closer to three to four times earnings in many areas. That gap doesn’t just mean working harder, it breeds the kind of pressure that makes discipline harder to hold onto.
When pressure becomes overwhelming, desperation or resignation takes control. It makes people act from emotion, searching for an escape rather than a solution, the financial equivalent of loading everything into one punch and hoping it lands. We saw this during the 2021 meme stock frenzy and the cryptocurrency explosion, where many people chased life-changing returns overnight. Most retail investors who trade this way end up losing money, whether they’re in and out within days or holding for years.
It’s tempting, under that same pressure, to write off the long game altogether, to assume that saving for a retirement decades away is pointless when the cost of living is squeezing you right now. But that instinct works against you. According to the Pension Policy Institute, only 46% of Gen Z believe the state pension will still exist by the time they retire. If anything, that uncertainty makes building your own retirement pot more urgent, not less.
Research and history consistently tell us that building wealth is less exciting but much more effective than chasing a knockout. US-based research from The Millionaire Next Door by Thomas Stanley and William Danko found that most self-made millionaires are ordinary people who live below their means and understand the consistent game of investing.
In the UK, household wealth is dominated by housing and pensions. This is ‘asset-based’ forms of wealth, where growth comes mainly from price appreciation and compounding over time rather than wages alone. Pensions are one of the simplest ways to step onto that asset ladder. The younger you are, the more it feels like you’re strapped to a jetpack as you climb it, because time turns those small steps up the ladder into leaps eventually.
Small, consistent actions repeated over time beats risky bets. This is where the power of compounding comes in, famously described as “the eighth wonder of the world” by Albert Einstein.
I like to think of compounding as my sparring partner. While there was always noise outside about how good I was as a fighter or how I performed in my last fight, we were working quietly behind closed doors. No headlines, no opinions. Just hard work every day, improving and building strength.
Why are we not talking about pensions and compounding?
Making the most of your age and increasing your pension contributions where possible fits naturally into the picture. When I was boxing, nobody mentioned pensions, retirement felt like something that only happens to other people. Then I came across a statistic that changed everything for me.
Assuming 7% annual growth, if you invest £200 a month from age 20 to 30 and then stop, you’ll have put in £24,000 and by age 65, that pot grows to around £370,000. Now take a mate who starts investing at 30 and keeps going all the way to 65, let’s call him Steve. Despite contributing £60,000 more than you overall, Steve ends up with about £360,000, slightly less than your pot, even though you stopped contributing 35 years earlier. That’s before factoring in the government top-ups your contributions attract along the way.
With the state pension slowly becoming something we are not banking on, this is exactly the kind of number that should change how urgently you treat your own pot. The power of compounding hits harder than a clean uppercut.
Win on points
The smartest boxers don’t chase knockouts. They win through consistency, wearing their opponent down like water wears away stone.
Investing is the same. Stop chasing the knockout. Go the full 12 and win on points.
