Should I get a pension?

by , 11 Aug 2010

I am in my early 20's and need to decide if I want to start a work pension (which they will match any contributions) but I am undecided, I feel I am too young? Does any one have any thoughts or experiences? Or should I just be saving for a house with this money instead?

Answers

Chosen as Best Answer

Join the pension scheme you are never to young and start AVC when you are in the early thirties, as pointed out below your contributions are tax free so the government gives you 20% free and your employer matches your contributions. In the future you could be in a position to retire early with the proceeds, dont forget if you do retire early you would be taking a tax free lump sum and most people use this to pay off a mortgage or invest with an ISA for additional income which you do not have to declare as income because its tax free.
However things can and will change in the next thirty years I am sure, put your money into as many pots as possible while you are young

by Roger, 11 Aug 2010

Thanks, you will be pleased to know that I am all signed up with my first pension!

by TheBandit, 11 Aug 2010

Well done, it's a good move.

by roseangel, 11 Aug 2010

I don't have a pension, wish i did though.I watched a thing on tv that said the average state pension is ?5000 a year, which will be hard to live on. I think that yourself and myself do need to start a pension at some point to top this figure up. But saying that if you save for a house and you own that house when you retire your living costs will be less.Deffo think about wether you can do without the extra money now as if the answers yes a pension would be a good investment in your future.

by cffalco, 11 Aug 2010

Yes state pension rose by a paltry ?2.40 this April and is ?97.65 per week. Who can live on ?5k annually. Remember if you own a home you have to heat it. That is expensive. Deffo start a pension even a ?1 p.w that makes ?2 with employer's contribution.

by pmscot93, 11 Aug 2010

i may go and talk to my HR to see what i can do

by cffalco, 11 Aug 2010

I was the same a few years ago and felt too young to be thinking about a pension, but thankfully my dad was very forceful and arranged for his financial advisor to come and see me. I started a stakeholder pension based on reasonable monthly contributions that I could afford - in a matter of a few years I have built up a tidy sum and its encouraging to see that my retirement income is growing steadily. I'm also fortunate to have an employers pension and would definitely recommend starting this if they will match what you put in - take the opportunity while you have it, not many employers still offer this in these difficult economic times!

by -Nic-, 11 Aug 2010

Yes final salary schemes are all but gone.

by pmscot93, 11 Aug 2010

You are never too young to start a pension treat it as a long term savings plan with your employer matching it pound for pound. Where else can you get 100% interest.

by Noddy1, 11 Aug 2010

Great point

by pmscot93, 11 Aug 2010

i have a pension with my works and they match it also i think with the way things are going then a pension is a must have

by smartcar, 11 Aug 2010

you are never too you to look after your future go for it and you may have the funds for early retirement

by abigail69, 11 Aug 2010

I would advise everyone to start a pension - especially if your company are going to match your contributions. Don't forget that contributions into a pension scheme are deducted before you pay tax, so you gain once more

by kensington143, 11 Aug 2010

With welfare benefits in the headlines at the moment, I thought I would raise an injustice. If you have never worked a day in your life and claimed state handouts throughout your adult working life, because you have that work shy problem, when you come to retirement you receive a larger state pension than someone who has slaved away all thier lives, contributed to the pot that pays for others to reap the benefits of others hard work. How fair is this?

by Parchester, 11 Aug 2010

It isn't fair and I too think it should be addressed. The only thing you will have that the work shy won't is complete self respect.

by roseangel, 11 Aug 2010

Posts within the money.co.uk community represent the views, experiences and opinions of members and experts only. They should not be taken as financial advice and should not be followed without further research.

Get our free money saving newsletter
Join over 450,000 other subscribers who grab our expert money tips, unmissable money guides & hottest bargains each week in our special email...