Financial 'opinion' for 23yr old getting pension & house

dunstonh

... but here's a guy who has only a small emergency fund, a pile of student debt, no home, a low salary and business aspirations which may require him to invest cash.

Sounds like a good proportion of the general public. Many of whom will remain in a situation not too unlike that until their 40s/50s.

How can it be possibly good advice to lock away what little money he does have where he can't access it for 30 years?

I didnt say stick it in a pension. I said save for retirement.

However, if Tim is the sort of person that may be tempted by having accessibility, then the pension wrapper may be very appropriate for him. If he has the mental discipline not to touch an ISA, then the ISA may be appropriate.

Pal

Someone who lives at home does not need an emergency fund until they move out, so personally I would use ISAs to build up a house deposit. Once that is up to around £10K (or whatever you think you will need to put down a 10% deposit), build up an emergency fund in ISAs for when you move out of about 3-6 months net pay.

In the meantime, either start your own business, or get a job with a decent pension scheme, or that pays sufficiently well that you can put some more money aside for retirement as soon as possible.

Then start saving for long term with a mixture of pensions and ISAs.

deemy2004

tim_n wrote:

I'm 23, and it's time I started planning for my retirement!

I am in a very low wage situation which I intend to compliment soon by getting a second job. I work for a far east company selling, and get £10,600. Although I live with my parents and rent/utility free, I am about to start contributing to the tune of £280pcm which I believe my parents are going to be saving to give back to me in the form of a housing deposit (Woohoo!).

My commitments include a 5 year old fiesta which I have been insuring for around £350 per year and drive around 10,000 miles in. The odd holiday here and there and a mobile contract about £30 pcm which I will get 100% cashback in 9 months time. I also have a full TV contract (multiroom) with sky @ £10 per month, make NI contributions (class 4? @ £21 pcm?) and budget £80 a month spending money.

Your at the right age to educate yourself on becoming money savvy !

Start budgeting, and start saving ! Given your earnings your minimum aim should be to save £3000 a year into a tax free cash ISA, £250 per month !