Starting 1st Pension
Discussion
Have been thinking about starting this now. From memory its 2%/3% (me, them) of gross salary a month. Not much, but I wont notice it and its just another little pot of money to build up. I also have the option to top it up too.
I also understand that now is a good time, with the climate on its arse, it can only really go up?
Anything I should look out for? My dad has said I should ensure that its portable, to a future employer (if there ever is one
) and that I can continue it with them.
Built in, is life insurance, it's something like 7 times my salary upon death. What I'm not sure about is if that is only when I'm working at the premises or as long as I'm employed by them and have a current pension.
Any other perils of wisdom?
I also understand that now is a good time, with the climate on its arse, it can only really go up?
Anything I should look out for? My dad has said I should ensure that its portable, to a future employer (if there ever is one
) and that I can continue it with them.Built in, is life insurance, it's something like 7 times my salary upon death. What I'm not sure about is if that is only when I'm working at the premises or as long as I'm employed by them and have a current pension.
Any other perils of wisdom?
Edited by illmonkey on Thursday 20th August 11:22
In my opinion, if an employer is offering to contribute to your pension (albeit only if you agree to contribute yourself) it’s effectively a no-brainer.
I think most employers will offer you a stakeholder, which means if you change employers, you and the new employer will be able to contribute to the same pension.
With regards the life insurance, it is usual that as long as you are employed then the policy would pay out if you die (regardless of how/where you die).
As with all investments the value can go down as well as up, however the earlier you contribute to a pension the more peaks and troughs you should be able to smooth out.
I think most employers will offer you a stakeholder, which means if you change employers, you and the new employer will be able to contribute to the same pension.
With regards the life insurance, it is usual that as long as you are employed then the policy would pay out if you die (regardless of how/where you die).
As with all investments the value can go down as well as up, however the earlier you contribute to a pension the more peaks and troughs you should be able to smooth out.
haworthlloyd1 said:
illmonkey said:
Have been thinking about starting this now. From memory its 2%/3% (me, them) of gross salary a month. Not much, but I wont notice it and its just another little pot of money to build up. I also have the option to top it up too.
I also understand that now is a good time, with the climate on its arse, it can only really go up?
Anything I should look out for? My dad has said I should ensure that its portable, to a future employer (if there ever is one) and that I can continue it with them.
Built in, is life insurance, it's something like 7 times my salary upon death. What I'm not sure about is if that is only when I'm working at the premises or as long as I'm employed by them and have a current pension.
Any other perils of wisdom?
its not 'just a little pot of money to build up' this is your pension, your future nest egg that will grow tax free and you get free money from your employer. This will probably be your first or second biggest asset in years to come so try to be more serious about it mate - don't do it blindly. What kind of income do you want in retirement? what age do you want to retire? what level of income will the above give you etc?I also understand that now is a good time, with the climate on its arse, it can only really go up?
Anything I should look out for? My dad has said I should ensure that its portable, to a future employer (if there ever is one
) and that I can continue it with them.Built in, is life insurance, it's something like 7 times my salary upon death. What I'm not sure about is if that is only when I'm working at the premises or as long as I'm employed by them and have a current pension.
Any other perils of wisdom?
Edited by illmonkey on Thursday 20th August 11:22
no it can't 'only go up' it can go down a significant amount too if you are talking about the stock market - 25% falls can occur so you need to think about your attitude to risk. This often depends on time to retirement. Over a 20 year plus period it is highly unlikely that a cash based pension will beat one linked to the ftse. Research pound cost averaging too as that is effectively what you are doing.
your dad speaks truth but it will be 'portable' as your dad puts it - you don't have to take it to another employer when you leave you can leave it where it is as a preserved pension and any money in it will stay invested - you can move it around if you wish.
the life insurance pays out if you die whilst having the current pension with the firm - you don't have to be doing something work related. make sure you nominate your beneficiaries - sent you a pm about this.
starting a pension is good - you don't have to invest in the stock market - there are property funds you can invest in or cash funds or even individual shares etc however you will be limited by choice from your employer.
the pension grows tax free and you will prob be able to take your pension from age 55 and can have a quarter of whatever is in the pot when you get to retirement as a tax free lump sum and the rest payable as income (various options available)
also, if you go bankrupt in years to come they can take your house, cars, money in the bank etc but they can't/wont touch your pension - another reason why its not 'just another pot of money' - more to it than this but keeping it simple.
Edited by haworthlloyd1 on Thursday 20th August 17:00
I'll talk to HR and see what I can sort out.
Can you resend the PM/email. I mass deleted aload from my inbox, it must have got caught up in the spam.
Edited by illmonkey on Friday 21st August 09:01
haworthlloyd1 said:
its not 'just a little pot of money to build up' this is your pension, your future nest egg that will grow tax free and you get free money from your employer. This will probably be your first or second biggest asset in years to come so try to be more serious about it mate - don't do it blindly. What kind of income do you want in retirement? what age do you want to retire? what level of income will the above give you etc?
no it can't 'only go up' it can go down a significant amount too if you are talking about the stock market - 25% falls can occur so you need to think about your attitude to risk. This often depends on time to retirement. Over a 20 year plus period it is highly unlikely that a cash based pension will beat one linked to the ftse. Research pound cost averaging too as that is effectively what you are doing.
your dad speaks truth but it will be 'portable' as your dad puts it - you don't have to take it to another employer when you leave you can leave it where it is as a preserved pension and any money in it will stay invested - you can move it around if you wish.
the life insurance pays out if you die whilst having the current pension with the firm - you don't have to be doing something work related. make sure you nominate your beneficiaries - sent you a pm about this.
starting a pension is good - you don't have to invest in the stock market - there are property funds you can invest in or cash funds or even individual shares etc however you will be limited by choice from your employer.
the pension grows tax free and you will prob be able to take your pension from age 55 and can have a quarter of whatever is in the pot when you get to retirement as a tax free lump sum and the rest payable as income (various options available)
also, if you go bankrupt in years to come they can take your house, cars, money in the bank etc but they can't/wont touch your pension - another reason why its not 'just another pot of money' - more to it than this but keeping it simple.
Can I intrude onto this thread and say thanks to Haworthlloyd1 too; was looking to ask a similar quesiton to the OP and this response has helped a lot.no it can't 'only go up' it can go down a significant amount too if you are talking about the stock market - 25% falls can occur so you need to think about your attitude to risk. This often depends on time to retirement. Over a 20 year plus period it is highly unlikely that a cash based pension will beat one linked to the ftse. Research pound cost averaging too as that is effectively what you are doing.
your dad speaks truth but it will be 'portable' as your dad puts it - you don't have to take it to another employer when you leave you can leave it where it is as a preserved pension and any money in it will stay invested - you can move it around if you wish.
the life insurance pays out if you die whilst having the current pension with the firm - you don't have to be doing something work related. make sure you nominate your beneficiaries - sent you a pm about this.
starting a pension is good - you don't have to invest in the stock market - there are property funds you can invest in or cash funds or even individual shares etc however you will be limited by choice from your employer.
the pension grows tax free and you will prob be able to take your pension from age 55 and can have a quarter of whatever is in the pot when you get to retirement as a tax free lump sum and the rest payable as income (various options available)
also, if you go bankrupt in years to come they can take your house, cars, money in the bank etc but they can't/wont touch your pension - another reason why its not 'just another pot of money' - more to it than this but keeping it simple.
Edited by haworthlloyd1 on Thursday 20th August 17:00
Ta
Jimmy
- I like that, very good !This seems to be a fairly good indication of why there is a 'Pensions Crisis'.
Working in the industry, I remember a rule of thumb that said you should take age that you first start contributing to a pension, divide by two, and that should be the % of your salary that needs to go in your pension pot EVERY year until 65 so you can retire reasonably well.
Thus if you are say 28 years old, you need to input 14%.
Hopefully the OP isn't relying on his 2% -3%.
Working in the industry, I remember a rule of thumb that said you should take age that you first start contributing to a pension, divide by two, and that should be the % of your salary that needs to go in your pension pot EVERY year until 65 so you can retire reasonably well.
Thus if you are say 28 years old, you need to input 14%.
Hopefully the OP isn't relying on his 2% -3%.
Spideypowers said:
This seems to be a fairly good indication of why there is a 'Pensions Crisis'.
Working in the industry, I remember a rule of thumb that said you should take age that you first start contributing to a pension, divide by two, and that should be the % of your salary that needs to go in your pension pot EVERY year until 65 so you can retire reasonably well.
Thus if you are say 28 years old, you need to input 14%.
Hopefully the OP isn't relying on his 2% -3%.
Not alot of people could just chuck that kind of money in a pot, not to be accessed for many years. Working in the industry, I remember a rule of thumb that said you should take age that you first start contributing to a pension, divide by two, and that should be the % of your salary that needs to go in your pension pot EVERY year until 65 so you can retire reasonably well.
Thus if you are say 28 years old, you need to input 14%.
Hopefully the OP isn't relying on his 2% -3%.
I am wondering if its worth just taking the basics, so I get the additional money from my employer. I am currently saving a fair chuck of my salary (gross), about 1/3rd. But I can access this when I want, chucking it into a pension seems daft for a % like 15%, if I ever need the money I cant get it!
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