Pension Advice

karamunroe

Really need to start a pension but don't have a lot of money each month to contribute. Does anyone know of any good pensions or are they all rubbish? Maybe just having a bank account is the way to go? Thanks

McKneff

Does your employer have a scheme that you can pay into.

Trouble with putting savings into a bank yu can tend to dip into it and suddenly its not there anymore.

Rob_192

karamunroe

Your opening comment sugest you are very sceptical about pensions. A lot of people are, but don't be under any illutions that 'just having a bank account is the way to go', it most certainly is not.

You don't have to have a pension but you most certainly do need to make provision for your retirement. There are many ways to do this and many cloose Isa's or other ways of investing, but money in the bank one of the least efficient and useless ways of saving for your retirement. Even with the effects of compound interst you are still battling inflation which is currently at a higher rate than any rate you will find on the high street and also compounding against you.

You don't give your age or any indication of the amount you might be able to contribute, but even a small contribution in the early stages is worth making - it's very much a case of the earlier the better when it comes to pensions.

R

dunstonh

Does anyone know of any good pensions or are they all rubbish?

What do you class as good and what do you class as rubbish?

don't have a lot of money each month to contribute.

What amount do you have? (that will largely dictate what options you have)

Maybe just having a bank account is the way to go?

A pension is just a tax wrapper. A bank account is not a tax wrapper but an asset class; cash. Cash can be held in a tax wrapper. Not the other way around. So, if you want to hold cash you next need to decide if the pension tax wrapper is the best option (or ISA or unwrapped). Of course, cash comes with its own risks, for some those risks may be greater than other asset classes.

Loughton_Monkey

It sounds like you are not fully convinced about the whole thing, but nevertheless asking about what might be appropriate. A bit like stating you think you need 'Insurance' but haven't really thought about whether it should be Buildings Insurance, Contents Insurance, Car Insurance, or just cover for your mobile phone!

The point is, that you need to think very long term. Ask any pensioner today and the vast majority might admit that they didn't plan enough (financially) for retirement and feel a bit let down that they cannot live the sort of life they would like on a State Pension and a few benefits. You should understand the reality that ideally, you should be spending only around 75%/80% of your income throughout a full working life if you are to be able to retire and contiue the same lifestyle. And this is a tall order for anyone, and the earlier you start, the better.

As to the balance, then it must be invested wisely. Once you have enough cash saved to tide you over in 'emergencies', like a short period of unemployemnt, then pensions should form a high proportion of your investments. This is partly because of the generous tax relief where whatever you put in, HMRC will put in a further 25%.

karamunroe

thank you all for the advice. I have around £50 per month to put in to a pension fund... it's just difficult knowing where to turn when you're young and have no clue!! I'll maybe go to the bank for some advice to start with and see where that takes me. Maybe a normal bank account isn't the way to go after all... everyone has such different opinions. Investigation needed!

Mojisola

karamunroe wrote: »

thank you all for the advice. I have around £50 per month to put in to a pension fund... it's just difficult knowing where to turn when you're young and have no clue!! I'll maybe go to the bank for some advice to start with and see where that takes me. Maybe a normal bank account isn't the way to go after all... everyone has such different opinions. Investigation needed!

I know very little about pensions but I know you shouldn't buy one from the bank. You'll get a much better deal elsewhere.

Martin's done an article on pensions - https://www.moneysavingexpert.com/savings/discount-pensions
so start by reading that.