As thousands of school leavers and graduates start work, WEALTH at work shares practical tips to help young people feel more confident with their money from day one.

Financial wellbeing and retirement specialist, WEALTH at work, has unveiled its top money tips to help young people build healthy financial habits from their first pay packet that can last a lifetime.

The guidance comes as thousands of young people prepare to enter the workplace for the first time following their GCSEs, A-levels or university – joining the 3.8 million 16 to 24-year-olds already in employment in the UK.

Alongside new routines and responsibilities, those entering the workplace will be faced with learning a range of new skills. This includes managing their finances – potentially for the first time – which can feel like a complicated and overwhelming task.

This is being made harder by the financial pressures facing many young adults today, from student loans to rising living costs. A graduate in England typically finishes their studies with debt from student loans averaging £47,730.

Saving for a first home is also a challenge. Based on the UK national average deposit for first time buyers of 20%, the amount needed ranges from £26,960 in the North-East of England to £84,120 in London.

Money worries can affect working life too. In research conducted by WEALTH at work, around two-fifths (39%) of Gen Z workers said money worries had affected their performance at work by increasing stress levels, while 43% said they had experienced mental exhaustion.

Jonathan Watts-Lay, Director, WEALTH at work, comments: “Starting a new job is exciting, but it might also be the first time someone has had to manage their own money every month, which can feel quite daunting. From understanding a payslip to deciding how much to save, there’s a lot to take in. This is being compounded by the financial pressures younger generations are experiencing, such as the increased cost of living.

“The good news is that developing healthy financial habits early in your career can make a big difference. Getting familiar with budgeting, saving, pensions and responsible borrowing can help young workers feel more in control and avoid costly mistakes.

“Taking the right steps from the first pay packet means your money can start working as hard as you are, helping to build the foundations for a brighter financial future.

“Many employers provide financial education in the workplace to help those early in their career to learn the basics of good money management, as well as understanding the savings and benefits on offer to build lasting financial resilience.

“For employers looking to bolster their support, specialist financial wellbeing providers are available to help ensure this is delivered reliably and effectively.”

WEALTH at work shares six money tips:

1. Get to grips with tax

“Income Tax is charged on most types of income, but people don’t usually pay this tax on all their income because they will typically qualify for the Personal Allowance,” says Jonathan Watts-Lay. “This is the amount of money someone can earn each tax year before they start paying Income Tax.”

For the 2026/27 tax year, the standard Personal Allowance is £12,570. Income Tax is then paid at 20% on earnings above £12,570 and 40% above £50,270 and 45% above £125,140. It’s important for people to check they are on the right tax code and paying the correct amount of Income Tax. This can be done by checking www.gov.uk/check-income-tax-current-year.

Income Tax isn’t the only deduction taken from a salary. National Insurance contributions are also required, at a rate of 8% on earnings between £12,570 and £50,270, and 2% on earnings above that. These payments will help build an entitlement to certain benefits including the State Pension.

2. Make sense of payslips

“Knowing the difference between gross income and take-home pay is one of the first steps to feeling in control,” says Jonathan Watts-Lay. “The most common deductions on payslips are Income Tax, National Insurance, pension contributions, and student loan repayments.”

A first payslip can be confusing, but it explains exactly how pay is calculated and what is being deducted. Key things to check include:

• Payroll number
• Gross income - the income before any taxes and deductions have been taken
• Net pay - what’s left after deductions have been taken
• Tax code

A tax code tells an employer how much tax-free income an employee is entitled to before Income Tax is deducted. Most people are on tax code 1257L, which reflects the standard Personal Allowance of £12,570. However, the code can be adjusted by HMRC if someone receives taxable benefits through work, such as private medical insurance, has more than one source of income, or owes tax from a previous year. It's therefore worth checking that the tax code shown on a payslip is correct. If someone thinks their tax code is wrong, they should contact HMRC as soon as possible, as this could result in them paying too much or too little tax. HMRC can review their circumstances and, where necessary, issue an updated tax code to their employer.

3. Make the most of pensions

Auto-enrolment means that all employees between age 22 and their State Pension age with earnings of more than £10,000 annually, are automatically enrolled into their workplace pension. If employees are within the age bracket 16 to 21, they can opt into their pension scheme if they wish to do so.

Currently, employers are required to make a 3% minimum contribution with employees required to pay 5% to bring the total pension contribution to 8%. Some employers pay more than the minimum contribution of 3% and employees may be able to pay less into their scheme as a result. There are also companies where some employers may match pension contributions made by employees.

Contributions made into a pension are usually free of Income Tax and employers who offer a salary sacrifice arrangement are also able to save employees National Insurance costs on their contributions. This means basic rate taxpayers will usually save 20% in income tax on contributions and may save a further 8% in National Insurance costs. It is widely recognised that contributions totalling 8% of salary (3% from the employer and 5% from the employee) are unlikely to be enough to provide the quality of retirement most people desire.

“If employers are willing to match additional contributions, it can make a significant difference to the size of the final pension pot,” says Jonathan Watts-Lay. “Someone in their 20s, saving just 1% more each year into a workplace pension can boost future savings by 25% in retirement if their employer was to match this.”

4. Build up savings

“Whilst a workplace pension provides a great way to save for retirement, it’s also a good idea to build-up savings for unexpected costs and future plans,” says Jonathan Watts-Lay. “For example, an ISA is a tax efficient savings option for those wanting to build future savings. There are several different types of ISA available, with the two most common being a ‘cash’ or a ‘stocks and shares’ ISA. Many workplaces offer their employees access to a Workplace ISA and contributions can conveniently be taken directly from pay.”

Some companies also offer employees access to Save as You Earn (also called share save plans) as a way to invest in their future. These plans typically run for three or five-year terms, and employees can save between £5 and £500 per month. At the end of the plan’s term, if the company’s share price has fallen, employees can receive all their savings back. If the share price is higher than the fixed price agreed at the start of the plan, employees can use their savings to buy shares at a lower cost and sell them to realise any returns.

The Share Incentive Plan (SIP) is another type of share plan, enabling employees to purchase shares in their company by making monthly contributions of between £10 and £150. Employers may also provide matching shares so that the employee can receive up to two additional shares for each share purchased. Some companies will also use the SIP to gift ‘free shares’ of up to £3,600 in any tax year to employees.

5. Create a monthly budget and plan spending

“A monthly budget helps people to see what they can afford to spend, spot where money is going and avoid drifting into debt,” says Jonathan Watts-Lay. “Start with income, then list regular essentials, such as mortgage or rent, council tax, energy bills and utilities, plus phone contracts and broadband subscriptions. It’s also important to make room for other costs, such as food and clothes shopping, along with socialising, so the budget feels realistic.”

Jonathan continues: “Budgeting apps that integrate with bank accounts can also be useful to give a clear overview of all accounts, including savings, and show all transactions in one place, as well as how spending compares to previous months. These apps also enable people to set multiple budgets for things like groceries, eating out, and entertainment, as well as setting savings and debt repayment goals.”

“Regular financial health checks are a great way to become more aware of your spending and adjust accordingly,” says Jonathan Watts-Lay. “It might be possible to reduce costs and outgoings by shopping around to lower household bills such as insurance, phone and broadband providers, and cancelling unused subscriptions.”

6. Check out workplace perks

Jonathan Watts-Lay says: “Most companies offer their employees workplace benefits and discount schemes, so it’s important to find out what’s on offer. This can range from health and fitness support, such as discounted gym memberships, through to discounts on shopping, eating out and holidays, and possibly support with childcare and elderly care costs.

He continues: “Some of these benefits are offered through salary sacrifice, which means it’s paid through company payroll using pre-tax salary. This means less Income Tax and National Insurance are paid, which can deliver significant savings.”

Jonathan Watts-Lay adds: “The first pay packet is a milestone, but the benefits of good money management can last a lifetime. By taking a few simple steps early, young workers can build confidence, avoid common pitfalls, and make their money go further.

“By putting the right financial education support in place, employers can help employees at the start of their career to learn the basic principles of money management, as well as understand all the savings and benefits on offer to build financial resilience.”