Retirement planning, pensions and buying property

agricola

Hi all,

I've been searching the internet and the threads here and haven't found much on the subject of graduate finances. Tons on student finances, but very little on how the recently graduated cope.

Anyway that's not wholly relevant to my question. I've just got my first 'proper' job at the age of 27 and am looking to start retirement planning. I'm getting paid £11,700 per annum before tax. My situation is as follows; my student account overdrafts come to around £4,000 interest free and I'm currently putting £250 a month in the A&L savings account. In a year I'll pay off the bank accounts as that account only lasts a year. I have around £13,000 of debt with the Student Loans Company, although as I don't reach the repayment thresshold. Once I've paid of the £4,000 I'll be looking put a similar amount into ISAs which will be a long term strategy for paying off the student loans.

In my budgeting I've allowed £80-£100 per month to go towards a pension, which until this week I knew very little. My work arrange a stakeholder pension which is managed on their behalf by a broker, and invested in Scottish Widows. They don't make any contributions at the moment, and I'm still to get the exact details and projections from the IFA. But my question is, is this the best use of my money, or should I be doing somethin else with that money each month. My debt recovery strategy is all tied up, and as my bank overdraft is interest free, I'd rather make some money from the savings account. I'm keen to get on the property ladder, and am wondering if this is perhaps a more appropriate use of my money, although I'd be looking towards buy to let as I live with my partner who owns the property.

Or is there another way of saving for retirement that I should think about.

Cheers guys

Andrew

EdInvestor

My work arrange a stakeholder pension which is managed on their behalf by a broker, and invested in Scottish Widows. They don't make any contributions at the moment,

IMHO basic rate taxpayers should not bother with pensions unless they have access to free money from their employer.Rather they should save in ISAs, a much more flexible tax wrapper.

If you want to contribute a bit to retirement, you might be better to pay up the missing years on your state pension, as you're starting work rather late. [THough I wait a little while on this until we get clarification on the plans to cut the minimum contributions to 30 years].

My debt recovery strategy is all tied up, and as my bank overdraft is interest free, I'd rather make some money from the savings account. I'm keen to get on the property ladder, and am wondering if this is perhaps a more appropriate use of my money...

IMHO for anyone who is looking at buying property and doesn;t yet have a deposit, locking away money in a pension which can't be access before aged 55 (and then only 25% in cash, if that's still allowed) doesn't make sense.

agricola

Sorry I forgot to say I'll be doing some additional freelance work over summer so will have 2/3K saved up after summer.

EdInvestor

Some relevant discussion on this thread