“It was actually one of probably the first things that I thought about, especially once I had graduated university and started working,” he said of his pension contributions.
“I think someone explained it to me, not in the automatic enrolment sense, but it was more in the sense of if you ask for your employer for a six percent pay rise or whatever, would they give it to you? And the chances are they probably wouldn’t. But they will give it to you via the pension scheme.”
He added: “I view it as free money I guess, because the employer wouldn’t give it to you as a salary if you asked for it. It’s money that if it was salary I wouldn’t turn down, so I don’t think, well I haven’t turned it down as a pension.
“One thing I will say on that though is because I’m looking to achieve financial independence between the age of 40 and 45, I’m putting more focus onto my ISA than I am my pension, because obviously I can’t access my pension until at least 57, probably even more.
“So I’m focused more heavily on my ISA than I am my pension.”
As well as an increase to the age at which point he can access his private pension, Tom is aware he may also be impacted by further state pension age changes. This adds another “motivation element” to him achieving financial independence sooner rather than later, he said.
“I can’t see it [the state pension] going anywhere, but because I’m focusing on my ISA and because I’m basing my calculations off historic returns – which whilst might not be perfect, they’re the only thing we’ve got to go off – I’m pretty confident that whether irrespective of whether the state pension exists or not, by the time I get to retirement age, I’ll be in a comfortable enough position to deal with it,” he said.