Advice would be great

lilaliboo1 · 2 November 2004 at 8:04PM

I am a 27 year old married gal and still have not started a pension because I decided to save for a house and pay off my £4.5k loan/credit card debt first. I have now done this, I have my house (finally) and all I have on my card is £1,900 and it's 0% (Barclaycard - thanks for the tip)

I do have some savings (ISA) but thay are earmarked for future baby-making!

I can put by (up to) the £100 per month that I have been using to pay off my credit card. My employer does not wish to contribute and I have been advised that a stakeholder pension would not be ideal as I earn just over £30k. I would like to retire by the age of 60. What would you suggest is the safest kind of pension? Should I wait until the credit card has been fully paid off? How much should I put in?

Thanks very much xx I love this site, it has really helped.

dunstonh · 2 November 2004 at 10:46PM

I have been advised that a stakeholder pension would not be ideal as I earn just over £30k.

Wrong. You can pay into a stakeholder or a personal pension with that level of income and no occ scheme available.

I would like to retire by the age of 60.

£100pm isnt going to allow that when starting at age 27 I'm afraid.....

What would you suggest is the safest kind of pension?

....especially if you only invest in low risk funds.

Should I wait until the credit card has been fully paid off?

Depends on how long you anticipate its going to take to pay off.

How much should I put in?

At age 27 starting out, you should be looking at 15% gross of your income if you are going to age 65. Look closer to 20% gross if you want 60.

lilaliboo1 · 3 November 2004 at 11:56AM

Eeek! :-/ Thanks very much though... I think I will have to rework some numbers to achieve that. Do you mean 15-20% of my gross salary or my net salary after tax & NI? Also is that to get a similar level of income on retirement as to what I'm earning now? Or a lesser income?

Thanks again.

dunstonh · 3 November 2004 at 12:25PM

Eeek! :-/ Thanks very much though... I think I will have to rework some numbers to achieve that. Do you mean 15-20% of my gross salary or my net salary after tax & NI? Also is that to get a similar level of income on retirement as to what I'm earning now? Or a lesser income?

Thanks again.

There are a lot of variables to consider, so that percentage is a ball park figure. I mean if you want to retire on 10k a year but are only earning 5k then 15% is nowhere near enough.

It is easier to say how much income do you want in retirement (in todays terms) and then the premium can be set from there. Let us know what income in retirement you would like and I or one of the others will give you a suggested contribution level.

Pal · 3 November 2004 at 12:49PM

Eeek! :-/ Thanks very much though... I think I will have to rework some numbers to achieve that. Do you mean 15-20% of my gross salary or my net salary after tax & NI? Also is that to get a similar level of income on retirement as to what I'm earning now? Or a lesser income?

Thanks again.

In theory, saving 15% of your net salary is the same as saving 15% of your gross salary, although the NI deduction throws the figures out a bit. Aim for 15%-20% of your net salary.

As you are 27, have you thought about finding another job with a company that does contribute to your pension? In the end if a company is not willing to provide employees with a fairly essential employee benefit, are they really worth working for? You might even get a payrise into the bargain which you can put towards your retirement savings. If more people thought like this pension provision in this country would improve very rapidly.

Finally, please note that baby making is generally free unless you have something to tell us about your choice of partner. ;D

lilaliboo1 · 4 November 2004 at 6:55PM

;D Oh you did make me laugh!!! Point about baby-making taken - no my husband does not charge

The babymaking fund is to cover my lack of full salary during the time I will be off on maternity leave and so I will be able to keep the kid in nappies. Colleagues and friends of mine who didn't plan beforehand said they should have done.

I have copied your message to my boss... should provoke some sort of response! He is very disillusioned with pensions and I think that's where his reluctance comes from. He's not all bad really :-X

lilaliboo1 · 4 November 2004 at 6:59PM

I would like to take home a pension equivalent to £1,000 a month. I plan to check my finances this weekend to see if I can free up more than £100 a month. I think £300 is way out of reach right now though. However I could add lump sums once or twice a year to top it up so that could be worthwhile.

I would appreciate advice on the best and safest place for a good return. Perhaps a pension at £150 per month then an additional savings account? I hear the Halifax is offering 7%...

Thanks for your help

Advice would be great

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