Graduation season is in full swing – and while it is a time for celebration and the start of an exciting new chapter for graduates, it could also herald the start of a longer and less certain route into work. Standard Life, the retirement specialist, says that while much of the focus is on how challenging the job market feels today, this can also lead to lasting financial effects over the longer term.
With entry-level roles becoming harder to secure amid economic uncertainty, increased competition and changes in how businesses operate, including AI adoption, the trend described as ‘graduate jobpocalypse’ is gaining momentum – but the full impact of a slower start may only become clear much later. Alongside the prospect of financially stretched graduates having less opportunity to build savings or needing to rely on borrowing in the short term, Standard Life analysis indicates that a three-year delay at the start of someone’s career could result in approximately £24,000 less in their pension pot by retirement, allowing for inflation, just £2,500 shy of the median real-term salary for working-age graduates which currently stands at £26,500.
The wider backdrop is also challenging, with the number of young people not in education, employment or training (NEETs) passing one million in the first quarter of 2026 for the first time since 2013. For many graduates, this means entering a jobs market with fewer opportunities and more competition.
The long-term impact of starting work later
According to Standard Life analysis, an individual starting work at age 22 on a salary of £25,000 and making minimum auto-enrolment contributions (5% employee, 3% employer), could build a retirement pot of around £210,000 by age 68, in today’s prices. However, if they don’t start saving until the age of 25, they could end up with a pot of £186,000, £24,000 less.
A longer delay has an even greater effect. Someone who starts pension saving at age 30 rather than 22 could end up with around £61,000 less in their pension pot by retirement.
| Total retirement fund at age of 68* | |||
| Start saving at 22 | Start saving at 25 | Start saving at 28 | Start saving at 30 |
| £210,000 | £186,000 | £163,000 | £149,000 |
| -£24,000 | -£47,000 | -£61,000 | |
*assuming 3.50% salary growth per year, and 5% a year investment growth. Figures account for 2% inflation. Annual Management Charge of 0.75% assumed. The figures are an illustration and are not guaranteed. Earning limits not applied.
“Life today can feel complicated and uncertain at times, and for many graduates, this is reflected in how they find the transition into work. For those who take longer to find stable work, the impact isn’t just about the impact of the job market right now and delayed earnings. It can also shape how those early years are managed financially, with less scope to put money aside and more of a focus on covering day-to-day costs, alongside missing out on pension contributions and those early years where savings have more time to grow in the background.
“Over time, that can make a meaningful difference to what people have to rely on later in life. Automatic enrolment has largely been a success, but it only starts working once someone is in employment. For graduates, the immediate priority is understandably finding work, managing everyday living costs and building confidence, but once they do enter the workplace, understanding how their pension works is crucial. This includes unlocking valuable employer contributions, the potential power of compound investment growth, and understanding the value of tax relief – an important early step on their pension saving journey.”
Mike Ambery, Retirement Savings Director at Standard Life
