Can anyone sell this idea to me ?

misterjingles

I'm 50 yrs old, so in theory only 15 more yrs of work till retirement . I'll be eligible to join my companies pension scheme soon having been with them just over a year.

Given that we find finances pretty tight at the moment like lots of other folk - can anyone persuade me that joining any scheme will be a good move, given the turmoil of stocks , money markets etc etc. Or is there a better use for the monthly contribution I might make.

dunstonh

can anyone persuade me that joining any scheme will be a good move

Its always a good move to fund your retirement.

given the turmoil of stocks

What the media class as turmoil and activity that has been seen before and will be seen again. Its a pain when it happens but it happens. Nothing new there.

Or is there a better use for the monthly contribution I might make.

What is your existing provision?
What is your current tax position?
how much is the employer contribution or is it a final salary scheme?
What will be your future tax position?
do you need income in retirement?

baby_fuzz

I am working on the 'fingers in many pies' theory, where I'm spreading the risk of holding savings across many different investments. As above, it is always wise to put money aside for retirement! (Whilst my pension has decreased in value since I started saving, I know that it is a long term investment, and it should even out over the years - the only thing you hope for, is that the market isn't bad when you come to cash out your pension...)

dunstonh

he only thing you hope for, is that the market isn't bad when you come to cash out your pension

Which you can mostly avoid by reducing the risk of your investments progressively as you get closer to retirement.

Ian_W

1. Can you live on £90.70 a week when you're 65 or £124.05pw if you qualify for pension credit? It is uprated annually by RPI [promised to move to average earnings in, around ??] but unless some future Govt increases it dramatically that, in to-days money, is what the value of your state pension in 15 yrs time.
2. If your employer contributes to your pension do you have a fairy god mother who will do the same for some other method of saving for retirement?
3. If you are a tax payer [and do have a fairy godmother] would she also chip in a further 20 or 40% to your savings as tax relief?

misterjingles

I think what I'm trying to get at is this....

If I have very little disposable income to play around with ( true ) , am I better off paying off debts sooner - i.e mortgage , rather than gamble on the fortunes of the stock market .

CLAPTON

misterjingles wrote: »

I think what I'm trying to get at is this....

If I have very little disposable income to play around with ( true ) , am I better off paying off debts sooner - i.e mortgage , rather than gamble on the fortunes of the stock market .

does your employer contribute to the pension scheme

misterjingles

yes they do - but don't know the finer details yet

dunstonh

misterjingles wrote: »

yes they do - but don't know the finer details yet

Think free money. It isnt really free money is the employer factors it in to their overall pay package but if you dont take it then you are throwing it away.

Nothing can come close to matching "free money" from the employer.

EdInvestor

misterjingles wrote: »

.. am I better off paying off debts sooner - i.e mortgage , rather than gamble on the fortunes of the stock market .

A mortgage is not actually a debt, it's a tax free leveraged long-term investment in an asset that's likely to grow in value. A pension is much the same, except it isn't leveraged.You should invest in both at the same time.

Debts are usually consumption related - money borrowed to spend on things which decrease in value or have no value to start with..

MrMicawber_2

You will need a retirement income. I you pay off your mortgage at the expense of this you may find you have an awful shock regarding the lack of it one day. As many have said do both. I've tried to keep doing a bit of everything like baby-fuzz above. It helps to keep a balance.