Worried 25 year old

Mess_2

Hi everyone I know I am probably a bit too young to be thinking about this. However lately I have been thinking about when Im old and what the future will hold. I am working as a nanny, and to be honest I can't imagine doing anything else. So my question is, if I stick with nannying for the next few years, what will my options be when it comes to getting a pension?

Any help will be much appreciate it, as its worrying me a bit.

Lokolo

Are you self employed or work for a company?

Mess_2

Lokolo wrote: »

Are you self employed or work for a company?

I am employed by a mum, its not a company no. The contract doesnt mention a pension, not that I was expecting one. I was wondering if I wanted to start saving for it, do I need to do some kind of private pension.

Sorry if I sound a bit clueless, I truly don't know anything about it

Lokolo

Assuming you are paying NI..... you will get state pension after 30 years of contributions.

You can also look here at the different types of pensions:

http://www.direct.gov.uk/en/Pensionsandretirementplanning/BeginnersGuideToPensions/DG_10027104

If I were you (given I suspect you don't know huge amounts about investments), I would be looking at stakeholder pensions....

marklv

Mess wrote: »

Hi everyone I know I am probably a bit too young to be thinking about this. However lately I have been thinking about when Im old and what the future will hold. I am working as a nanny, and to be honest I can't imagine doing anything else. So my question is, if I stick with nannying for the next few years, what will my options be when it comes to getting a pension?

Any help will be much appreciate it, as its worrying me a bit.

You're a puppy - stop worrying and enjoy your life. :rotfl: You have another 42-43 years of working life ahead of you, so there is no rush to think about retirement.

You can start your own personal pension, but before doing that think carefully about what you really want to do in life. If you want to be a nanny you can work for agencies, but I'm not sure what qualifications you need etc.

TMFTP

marklv wrote: »

You're a puppy - stop worrying and enjoy your life. :rotfl: You have another 42-43 years of working life ahead of you, so there is no rush to think about retirement.

What godawful advice.

If you think about retiring, think about it in terms of building up a pot of money to pay yourself when you're retired.

You're 25 now, so if you want to retire at, say 65, that's 40 years. If you start saving your pot of money now, you can build it up over 40 years. If you leave it 10 years, you only have 30 years to build the SAME pot of money.

So, (VERY simplistically) if you decide you want a pot of £100,000, at the moment you could save £2,500 per year. If you leave it 10 years that's going to go up to £3,300 per year.

Note - that's not how these things work - you (hopefully) build up interest on the payments you make, so small amount will snowball up over time. But the principle is the same - the longer you allow the snowball to roll, the more snow it will pick up.

"Leave it and enjoy life"? No. "Deal with it, and enjoy life knowing you're in control of your future" - yes.

marklv

TMFTP wrote: »

What godawful advice.

If you think about retiring, think about it in terms of building up a pot of money to pay yourself when you're retired.

You're 25 now, so if you want to retire at, say 65, that's 40 years. If you start saving your pot of money now, you can build it up over 40 years. If you leave it 10 years, you only have 30 years to build the SAME pot of money.

So, (VERY simplistically) if you decide you want a pot of £100,000, at the moment you could save £2,500 per year. If you leave it 10 years that's going to go up to £3,300 per year.

Note - that's not how these things work - you (hopefully) build up interest on the payments you make, so small amount will snowball up over time. But the principle is the same - the longer you allow the snowball to roll, the more snow it will pick up.

"Leave it and enjoy life"? No. "Deal with it, and enjoy life knowing you're in control of your future" - yes.

All very sound advice in theory, but tell me, how many 25 year olds can afford to make hefty pension contributions? And surely a pension is not top priority for someone of that age, given that they will be thinking of getting on the housing ladder etc. Every individual has different priorities, but I seriously doubt that it makes sense for someone that young to worry about a pension. By all means, start a pension, and contribute what you can afford, but don't make yourself a pauper just to increase your savings.

Another thing: it's possible you may not even live to 65 (or 68, which will be the retirement age for a person currently aged 25). It makes no sense to sacrifice yourself excessively in the present for a future that is by no means certain. Being prudent is sensible, but being over-cautious is just foolish.

Lokolo

I slightly agree with Mark. Although I think he is a bit stupid saying don't do ANYTHING and enjoy life. (although his latest post seems to suggest he meant contribute something just not everything)

Why not contribute the minimum? Most of the time you only need £20-£50 a month to start things off.

Even if this is low, its better to have little now, than nothing at all.

Once things start picking up, maybe with higher wages or having to spend less, the pension contributions can go higher.

Batchy

TMFTP wrote: »

What godawful advice.

If you think about retiring, think about it in terms of building up a pot of money to pay yourself when you're retired.

You're 25 now, so if you want to retire at, say 65, that's 40 years. If you start saving your pot of money now, you can build it up over 40 years. If you leave it 10 years, you only have 30 years to build the SAME pot of money.

So, (VERY simplistically) if you decide you want a pot of £100,000, at the moment you could save £2,500 per year. If you leave it 10 years that's going to go up to £3,300 per year.

Note - that's not how these things work - you (hopefully) build up interest on the payments you make, so small amount will snowball up over time. But the principle is the same - the longer you allow the snowball to roll, the more snow it will pick up.

"Leave it and enjoy life"? No. "Deal with it, and enjoy life knowing you're in control of your future" - yes.

I understand why you say what you say, but everyones situation is different.

When I was 22 I was earning 10k per annum... on the breadline for quite a period

Im now 32 earning over 40k per annum... Do you realise the effect a small contribution to a pension scheme on 10k per annum would have had an effect on lifestyle...

Granted not everyone is as fortunate with earning potential but when you know times will be good later on in life, then ride it out, and life is all about 30-60 after that medical and health problems become the priority or restricting factor.

TMFTP

marklv wrote: »

All very sound advice in theory, but tell me, how many 25 year olds can afford to make hefty pension contributions?

Irrelevant question. THIS 25 year old IS thinking about it, and no-one mentioned having to make "hefty" contributions.

"Do nothing" is a LONG way from the "By all means, start a pension" stance you've U-turned into. You should frankly be ashamed that you've posted that as advice in a forum like this.

And Batchy - point taken. But your circumstance may not happen to the OP. If they're NOT earning £40k when they're 32 (or earning anything at all) - then it may be they're glad they started when they did and at least have SOMETHING growing while they TRULY can't afford to contribute.

To trun the argument around - IF you're going to think about retirement options, do it when you're 25. Because then you're in control, regardless of what you decide to do (spend it, save it to ISA, save it to pension). If you leave it until you're 65 and you don't like the options you're facing - tough. It's too late.

marklv

Lokolo wrote: »

I slightly agree with Mark. Although I think he is a bit stupid saying don't do ANYTHING and enjoy life. (although his latest post seems to suggest he meant contribute something just not everything)

Why not contribute the minimum? Most of the time you only need £20-£50 a month to start things off.

Even if this is low, its better to have little now, than nothing at all.

Once things start picking up, maybe with higher wages or having to spend less, the pension contributions can go higher.

I never implied not doing anything - merely pointing out that a pension should not necessarily be the top priority for someone of that age.