Advice on Asda Pension

add1711

Hi, i'm new to the site and to having finances in general really to sort out so sorry if theres some daft questions, i've been offered a pension scheme by my employer asda. If I pay in 2 or 3% they'll match it. Its with prudential. I'm 19 and plan on workin there for one year. Have read the terms and conditions, but would like some advice.
My questions are

1. Are they safe/secure in the current financial state ?

2. A bit of a daft one, but when is the money taken out, before tax or after?

3.Theres a "lifestyle" option. The first - up to 8 years before target age - money is invested in company shares and stockmarket. Then switched to fixed interest gilts and interest. 2nd is that the 8 years up to target age its invested in company shares and bonds. Am unsure what risks they pose in long term

4.Is there a "right" age to start a pension?

Anyhelp clearing the fog lol would be greatly appreciated, thanks!

Day_Trader

add1711 wrote: »

Hi, i'm new to the site and to having finances in general really to sort out so sorry if theres some daft questions, i've been offered a pension scheme by my employer asda. If I pay in 2 or 3% they'll match it. Its with prudential. I'm 19 and plan on workin there for one year. Have read the terms and conditions, but would like some advice.
My questions are

add1711 wrote: »

1. Are they safe/secure in the current financial state ?

Yes so no need to worry about that.

add1711 wrote: »

2. A bit of a daft one, but when is the money taken out, before tax or after?

Depends on how you contribute - salary sacrifice will see it taken out of your gross pay, normal contributions will see a net deduction which will have tax relief added later.

add1711 wrote: »

3.Theres a "lifestyle" option. The first - up to 8 years before target age - money is invested in company shares and stockmarket. Then switched to fixed interest gilts and interest. 2nd is that the 8 years up to target age its invested in company shares and bonds. Am unsure what risks they pose in long term

Lifestyling just removes the volatility from your funds and reduces the risk of capital loss as you approach retirement. Switches you out of riskier investments and puts you in more secure options. Depends on how 'hands on' you want to be with your pension really. Lifestyling will put it on an effective 'autopilot.'
Risk wise the company shares is more risky than company shares and bonds but with the greater risk comes the potential for greater returns.

add1711 wrote: »

4.Is there a "right" age to start a pension?

No but the sooner the better. The first £ you contribute will work the hardest for you. Latest figures suggest that to enjoy a comfortable retirement you would need a pot of around £1million (for those 40 yrs away at the moment). Google 'pension calculator' to see what you may get.

It isn't the most generous employer scheme but whatever pension you start with them can be transferred with you wherever so you won't lose ultimate access to that money.

Hope that helps.

add1711

Thanks it did, I will start it and will probably go with the higher risk as the pot will be small anyway, thanks for clearing it up!

Lokolo

If you're 19 and only plan working there one year don't bother.

Once its in pension pot you can't access it until you retire.

add1711

Thanks, I will look at a little more, atleast I could I transfer it to next place of work so wouldnt be a loss

Debt_Free_Chick

add1711 wrote: »

Thanks, I will look at a little more, atleast I could I transfer it to next place of work so wouldnt be a loss

Check the paperwork again - is this a Stakeholder pension? If so, no need to transfer - it's YOUR own pension and you just take it with you when you leave.

Let us know how they describe the pension, but I'd be pretty confident it's a Stakeholder

add1711

Have re read it, it doesnt say whether its a stakeholder pension, but says if I leave I can transfer it to another pension scheme or just leave the plan as it is, thats if i were to stay 2 years or more, 3months to 2 years - I can either transfer it, or take a refund of my contributions minus tax