My first proper pension..

GEEGEE8

I say my first as I've had various one's for a year or so at places I've worked. I have the documents filed away somewhere.

Just opened a pension today with Hargreaves & Lansdown, only £40 a month to start with as I'm a relatively poor student at uni right now, but I'm 27yrs old and would like to make a start.

What should I do with the old 'work' pensions? Possibly only a hundred pounds or so in them but I'd like to keep it, should I contact the pension providers and give them my new address and arrange for it to be moved. Is this possible?

OH just said I shouldn't worry as he's 34 and hasn't got one, I've done the right thing haven't I?

I'm heading for a good career hopefully, but won't leave Uni for 3 yrs yet, I can afford the £40 just about and am going to try and save £30 a month in an ISA, more if possible.

So, any tips on what my plan should be? Should I stick with £40 until I get a job and save extra in an ISA?

dunstonh

Just opened a pension today with Hargreaves & Lansdown, only £40 a month to start with as I'm a relatively poor student at uni right now, but I'm 27yrs old and would like to make a start.

I will be honest and say that £40pm at age 27 is a very poor contribution level. Using a SIPP is probably not a great idea for such a small contribution either.

What should I do with the old 'work' pensions? Possibly only a hundred pounds or so in them but I'd like to keep it, should I contact the pension providers and give them my new address and arrange for it to be moved. Is this possible?

If the new option is better than the old then you should transfer them. If its worse then no. You should always tell your pension providers your address.

OH just said I shouldn't worry as he's 34 and hasn't got one, I've done the right thing haven't I?

His stupidity isnt an excuse for you though. You are doing the right thing. Although £40 is very low. Your employment status may be part of it but your partner doing nothing should concern you.

So, any tips on what my plan should be?

I think the best plan is to get your OH to do something before its too late. State pension of £7280 from age 68 isnt much to look forward to.

edinburgher

Just opened a pension today with Hargreaves & Lansdown, only £40 a month to start with as I'm a relatively poor student at uni right now, but I'm 27yrs old and would like to make a start.

To be honest I probably wouldn't have bothered. Not that you're not right to be investing for your future, but that's a pretty small contribution and fees etc. will no doubt eat into it. You can probably still cancel - you might be better off just sticking the money into a low-cost tracker fund held inside an ISA (assuming you have the willpower to leave it untouched).

ISAs have similar tax benefits to a pension in that they won't be subject to any further taxation on interest etc. (although you do fund them with money that has already been taxed from salaries etc.) Pensions, on the other hand, give you a free tax contribution from the government, but will probably be taxed once you retire anyway.

OH just said I shouldn't worry as he's 34 and hasn't got one, I've done the right thing haven't I?

Of course you have, I think the fact you felt the need to asks shows that you already knew the answer Please suggest your OH sorts himself out or he runs the risk of turning into a moany pensioner who never made any provision for his own old age, but then complains about how skint he is!

GEEGEE8

Thanks guys..

I've cancelled the Pension and opened up an ISA with the Halifax for 3%, seemed to be the best I could find without having to invest heavily upfront.

OH has about 20-30k is an ISA at the moment, so he has saved, but isn't sure on pensions yet, I think he wants to see an advisor first. He did go a few years ago and they said that it wasn't worth the investment and to save instead, so that's what he's done.

3 years of Uni left and then once I'm in a job I hope to be putting away £250-£300 a month, more when my wages increase.

Can I ask though, if you have a personal pension, do you still get your state pension on retirement too?

edinburgher

I've cancelled the Pension and opened up an ISA with the Halifax for 3%, seemed to be the best I could find without having to invest heavily upfront.

From your post, it seems that you and OH aren't big fans of investing. I think it's important to do both - savings cover immediate needs, emergencies and big ticket items like house deposits, but investments are for your future. Please don't avoid investing entirely, it can work in your favour in the long term.

OH has about 20-30k is an ISA at the moment, so he has saved, but isn't sure on pensions yet, I think he wants to see an advisor first. He did go a few years ago and they said that it wasn't worth the investment and to save instead, so that's what he's done.

That's not too bad then - in retrospect you probably made him sound a lot more !!!!less than he is Not sure I would agree that it wasn't 'worth his while', although I obviously don't have all the facts. A £20k investment could grow very healthily over 20+ years, while £20k in savings is actually losing money thanks to inflation.

As a quick anecdotal example, I've made 8-9% on my S&S ISA over the last year (tax free), whereas my savings have probably lost 1.5-2% of their real value thanks to inflation. That's not fun.

Can I ask though, if you have a personal pension, do you still get your state pension on retirement too?

You do get a state pension, although I believe that having large amounts of savings (currently) prevents you from getting top ups etc. I don't know much about the topic, however, so do your research! As the current government is trying to switch to flat rate pensions, this may not be relevant by the time you retire, anyway.

GEEGEE8

I would happily invest if I had any money lol. I'm just on a student loan at the moment, so £6500 a year which covers my rent/bills etc. I am getting a job in the 4-5month summer break hopefully and then I can build up some savings.

OH probably is wary of investing as he isn't clear about how much return he will get and probably wants to buy a new car in the next year or two and so doesn't want to make it complicated for himself.

He is very good at saving and yes, I probably didn't paint him in the best light, just didn't want to post about his finances

I think what I have decided is, to save in the ISA for the time I'm at uni and if I can get a couple of thousand saved then brilliant. If I did the pension I might be locking away money that I may need for living expenses I guess.

I definately want to get a pension started asap, just hope I don't leave it too late as I'll be 31 by the time I get my degree!

edinburgher

I take it OH works? Does his employer offer a pension, or is he self-employed?

ViolaLass

GEEGEE8 wrote: »

OH probably is wary of investing as he isn't clear about how much return he will get and probably wants to buy a new car in the next year or two and so doesn't want to make it complicated for himself.

He won't need the whole £20k-30k for a car, surely?

Investing is less certain than a cash ISA but in return for the risk, there is potentially greater gain. Another way of looking at it is that with a cash ISA, you know what you're going to get and it isn't going to be much.

GEEGEE8

He works yes, but no pension through his work unfortunately.

He was eyeing up a Focus ST the other day in Lime Green!! £27,000! Although I dare say he wouldn't ever buy it or use all his savings, he's dreaming though

I think that he likes to see where his money is, access it easily, and know how much interest it will make per year.

I however, spend too easily, find it hard to save and would much rather lock money away where I can't access it.

edinburgher

I think that he likes to see where his money is, access it easily, and know how much interest it will make per year.

But that's very much the point - he's making negative interest when interest rates are nowhere near the rate of inflation. Granted, investments can go either way, but with savings at the moment you're pretty much guaranteed a loss.

dunstonh

investing is less certain than a cash ISA but in return for the risk, there is potentially greater gain. Another way of looking at it is that with a cash ISA, you know what you're going to get and it isn't going to be much.

using cash for long term replaces investment risk with shortfall risk and inflation risk and in theory they could be greater risks. If you use cash deposits then you typically have to pay around 3 times more into it than you would if you were using investments. Cash guarantees a low return. Investments may end up with a low return but may end up with higher.