How Much Should You Actually Be Investing at 24?

By the First Wage Editorial Team · Published 18 September 2026 · 10 min read

Ellie’s Payday Spreadsheet

Ellie, a 24-year-old junior architect in Nottingham, earns £29,500 a year. On a September payday, she sat down and actually did the maths on her payslip for the first time since starting the job fourteen months earlier — income tax, National Insurance, student loan repayment, and a 5% workplace pension contribution had already come out before the number even landed in her account. Her take-home pay worked out to roughly £1,850 a month.

She’d read that she should be “investing 20% of her income,” looked at £1,850, calculated 20% as roughly £370 a month, and felt a small wave of panic. After rent (£650), bills, food, transport, and her student loan repayment, £370 would have left her with almost nothing for anything else — no going out, no buffer, nothing.

The framework wasn’t wrong. It was just being applied without the adjustments it actually needs.

Why “20% of Income” Is a Destination, Not a Starting Instruction

Percentage-of-income guidance is genuinely useful as a long-term target, but it’s commonly quoted without three important caveats that matter enormously at 24 specifically:

First, gross versus net matters enormously. 20% of Ellie’s £29,500 gross salary is one number; 20% of her actual take-home pay after tax, National Insurance, student loan, and pension deductions is a much smaller and more relevant one. Many versions of this guidance are vague about which figure they mean, which is exactly how Ellie ended up scaring herself with a number that didn’t reflect her real available cash.

Second, it assumes debt priorities are already sorted. The 15-20% figure generally describes total saving-and-investing activity once high-interest debt is dealt with — not investing specifically, and not on top of paying down an expensive credit card balance. If you’re carrying debt at a high interest rate, paying that down usually takes priority over investing, since the “return” from clearing debt is the interest rate you stop paying, often higher than a typical long-term investment return.

Third, it’s meant to be worked up to, not hit immediately. Very few 24-year-olds are investing 20% of their income in their first few years of full-time work. The percentage is more sensibly treated as a target to grow into as salary rises and rent stops swallowing quite as much of it, not a bar you need to clear from day one.

A More Realistic Order of Operations at 24

Rather than fixating on a single percentage, work through priorities in this rough order:

1. Cover essentials reliably — rent, bills, food, transport, minimum debt payments. This isn’t optional and comes first by definition.
2. Capture any free money on the table. If your workplace pension includes employer matching above the minimum, contributing enough to get the full match is usually one of the highest-value moves available, since it’s an immediate, guaranteed return that beats almost anything else you could do with the same pound.
3. Build a starter emergency fund — even a partial one, £500-£1,000, before anything else, growing toward 3-6 months of essentials over time.
4. Clear high-interest debt — credit cards, overdrafts, or personal loans charging meaningfully more than you could reasonably expect to earn by investing instead.
5. Then, and only then, direct spare income toward investing — starting at whatever percentage is genuinely sustainable, even if it’s 3-5% to begin with, and increasing it as pay rises, debt clears, or outgoings shrink.

Under this allocation, Ellie invests roughly £100 a month — a little over 5% of her take-home pay, and nowhere near the 20% figure she’d initially panicked over — while still building her emergency fund and keeping a reasonable amount for everyday life. That’s not a failure to hit a target; it’s an appropriate starting point for someone fourteen months into full-time work, with a plan to increase the investing share as her salary rises and her emergency fund fills up.

What Changes as You Move Through Your Twenties

The realistic percentage at 24 is rarely the realistic percentage at 29. As pay rises through promotions and job changes, and as big upfront costs like initial furniture, deposits, or debt clearance fall away, the share of take-home pay that can reasonably go toward investing tends to grow. A sensible approach is revisiting the split every time your income changes materially — a payrise, a new job, a change in rent — rather than setting a percentage once and forgetting about it.

It’s also worth remembering that workplace pension contributions are already a form of long-term investing, generally invested in similar underlying funds to a Stocks & Shares ISA. Ellie’s 5% pension contribution (plus her employer’s contribution on top) is doing real work toward her future alongside whatever she puts into her ISA — a detail that’s easy to overlook when focusing only on take-home pay percentages.

First Wage Takeaway

There’s no universal “correct” amount to invest at 24 — there’s only a sensible order of operations: essentials, employer pension match, a starter emergency fund, high-interest debt, then investing whatever is genuinely spare. Start with a percentage you can actually sustain, even if it’s far below any headline figure you’ve read, and plan to grow it as your income and priorities shift.

Frequently Asked Questions

Is 5% of take-home pay too low to bother investing at all?

No — starting with a modest, sustainable amount and increasing it over time generally works better than starting with an ambitious target you can’t maintain and abandoning it after a few months. Consistency matters more than the initial size of the contribution.

Should I prioritise investing over paying off my student loan?

UK student loans work differently from most other debt — repayments are income-linked, the interest rate is often comparable to or lower than typical long-term investment growth assumptions, and any remaining balance is written off after a set number of years regardless of whether it’s been repaid in full. Many people reasonably choose to invest or save alongside minimum student loan repayments rather than overpaying it, though this depends on your specific loan plan and terms.

What if I can’t invest anything right now?

That’s a completely normal stage, especially early in a career with a lower starting salary or higher living costs in an expensive city. Building even a small emergency fund first is a reasonable and valid priority in its own right — investing can start later once essentials and a safety net are more secure.

Does this percentage framework include my workplace pension contributions?

Guidance varies by source — some percentage targets are meant to include pension contributions, others describe additional saving and investing on top. Since terminology isn’t standardised, it’s more useful to think in concrete pounds across all your saving and investing activity — pension, ISA, cash savings — rather than trying to hit one blended percentage figure precisely.

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