I was down the pub the other night, chatting with another dad. Our children are friends and a good-natured conversation over a cold pint (mine's a Guinness, in case you’re wondering) quickly turned to a familiar topic: money, family and the interplay between the two.

Having kids often acts as a financial wake-up call. Suddenly, it’s not just about you anymore. You’ve got responsibilities. And it’s usually around this point that people start thinking more seriously about pensions, long-term savings and the daunting prospect of financing retirement. But at the same time, life doesn’t slow down. You want to enjoy time with your family and friends – weekends away, the occasional meal out and memorable holidays. That all comes at a cost too.

Then there’s the mortgage, nursery fees and the endless parade of birthday parties, with presents to buy.

So how do you balance it all? Spend now or save for later?

Well, here’s the thing. If you’re just starting to think about investing after you’ve started a family, you’re already wrestling with a lot of financial commitments. That’s why today’s chart drives home a crucial point: the earlier you start, the easier it should be.

Our chart shows the potentially life-changing difference in the returns achieved by a hypothetical investor who starts building up their pension pot at 25, compared with someone who also invests £5,000 each year, but doesn’t start until they’re 35.

It’s not magic. It’s the effect of compounding – where you’re earning returns on your returns, creating a snowball effect that should accelerate growth. Time is doing the heavy lifting here – and it can make an enormous difference.

Key takeaway

Investing isn’t about market timing. It’s about time in the market. The earlier you start, the less you should have to stress later in life. Even small amounts, invested early, can have a significant impact. And when life gets expensive (as it inevitably does), you’ll feel far less guilty about enjoying life if you’ve already laid those early foundations.

If you're in your 20s and taking the view that you’ll start investing when you’re older, then it’s worth thinking again. If you start now – even if it’s just a small amount - your future self, sitting in the sun enjoying an ice-cold drink at 65, is likely to thank you.

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This article is provided for general information purposes only and should not be construed as personal financial advice to invest in any fund or product. These are the investment manager’s views at the time of writing and should not be construed as investment advice. The opinions expressed are correct at time of writing and may be subject to change. Capital is at risk. The value and income from investments can go down as well as up and are not guaranteed. An investor may get back significantly less than they invest. Past performance is not a reliable indicator of current or future performance and should not be the sole factor considered when selecting funds.