Company Pension- Is it worth it?

dasherman

It's a yes !

JasX

Yes, start a pension, the younger you are the better.

I think there was a illustration i saw recently where if person A puts £100 per month away for 10 years between the ages of 20 and 30 then stops contributing entirely vs Person B who only starts at age 30 but then puts £100 a month away for the next 35 years till age 65 person A is the one with the noticably larger pension.... wait any longer and better start looking for a cardboard box.

bendix

If he's getting a free contribution from his employer,then he'd be daft not to start a pension. In addition to Edinvestor's caveat though, I would add that it's important not to rely solely on the benefits of a pension for investment income, for tax reasons as much as anything else. The thought of building up a million pound pension pot only to do the longevity gamble described by Ed and then effectively handing it over is appalling.

My own pension plans are built around a pension pot providing only around 40% of my wealth / income in retirement. The rest will come from other savings / investments.

dunstonh

The thought of building up a million pound pension pot only to do the longevity gamble described by Ed and then effectively handing it over is appalling.

The exception to that may where higher rate relief and/or tax credits are involved. When you havent paid for 72% of the pension pot out of your own money then its not so bad.

Like most areas of planning, no one option is the best option.