No pension as yet!

fattony

Hi

I've been thinking about this for a few months now and just dont know where to go with it, I'm getting married next month and neither of us have a pension, from what I've read current pension deals are falling short of expectations and this puts me off buying into them.

I have a mortgage which has 20 years left I'm 26, When I remortgage I always try and reduce the term by a year or two but I'm wondering if I should increase the term to reduce payments so I can afford to pay £200 a month into a pension, or do I stick with paying the mortgage off early and then save what I was paying on the mortgage?

thanks

dunstonh

from what I've read current pension deals are falling short of expectations and this puts me off buying into them.

I suggest you change your reading material. Pensions have never been cheaper and access to investments has never been better. Pensions themselves are just a tax wrapper for investments (a container you place investments in). The same investments on other tax wrappers such as ISAs are available on pensions.

Media coverage on pensions is typically sensationalist and restricted to certain types of pension. However, unless you know the differences the media make it easy to think they are talking about all pensions.

If you need incentive to start planning for retirement then just remember that the basic state pension is just £4700 a year. At your age, it doesnt need to cost a lot to start making some decent provision.

fattony

Ok point taken, can anyone suggest which company to choose? Is my employer obliged to contribute to my pension at all? they have never offered anything as yet.

dunstonh

can anyone suggest which company to choose?

No. There is no such thing as a best option that fits everyone. Each pension scheme will have pros and cons. For instance you mentioned you were 26 so that means a number of personal pensions will be quite a bit cheaper than a stakeholder pension. You dont sound like an experienced investor so you can ignore the experienced investor products and it doesnt sound like you want advice so you can ignore the cheapest options. So, that leaves you with a bog standard stakeholder pension as the most likely option.

Is my employer obliged to contribute to my pension at all?

No. Although employer contributions into a scheme are expected to become mandatory from 2012.

EdInvestor

You both might like to check how much you are in line to get from your state pensions.

https://www.thepensionservice.gov.uk

Sometimes you can be pleasantly surprised.

dunstonh

Sometimes you can be pleasantly surprised.

but even if you take the current maximum of around 3300 on top of the maximum basic state pension you are only looking at 8k a year. Plus, whilst the basic state pension may be secure in its future, the second state pension is not one that should be relied upon.