Vital to have a pension?

Theresonly1

Hello. I have so many questions regarding Pensions.. in relation to money saving!

I am young grad and just recently started work and have been offered many benefits where 1 of them is the company's pension scheme which they offer to contribute.

1) Is it vital to contribute to this pension scheme?

2) I know it is possible to organise your own pension scheme..but is this practical & feasible...?

3) what will happen if i don't contribute to this scheme? is there a default pension that we will all get (by law) when we reached retirement age?

4) i've heard about State Pensions/ Stakeholders pension etc... what are these?

5) If i don't contribute to any pension scheme then willl i be moneyless when i reach retirement age? or will the government pay me a pension by default?

-- all in all.. i am pondering if it is good to save money by keeping it as a salary and not contributing towards a pension scheme!

* i'm just not clued up on pensions.. (i'm young so please forgive me)

moonrakerz

Theresonly1 wrote: »

1) Is it vital to contribute to this pension scheme?

No - not if you think you can live on £102.15 (the current basic State Pension) a week when you retire.

Do a LOT of reading................

jennifernil

I suggest you google "state pension" and see how little it is......if it still exists when you reach retirement age.

If your employer is contributing you should join. Their contribution is in effect free money, and your contributions will qualify for tax relief.

You really do need to read up on pensions!

Theresonly1

jennifernil wrote: »

I suggest you google "state pension" and see how little it is......if it still exists when you reach retirement age.

If your employer is contributing you should join. Their contribution is in effect free money, and your contributions will qualify for tax relief.

You really do need to read up on pensions!

I know i need to read up on them..but where is the sources? So many internet articles but as we all know never trusts the net that much..

Is there any books etc.. on pensions?

dunstonh

1) Is it vital to contribute to this pension scheme?

No. You can always be poor in retirement.

2) I know it is possible to organise your own pension scheme..but is this practical & feasible...?

yes you can have your own scheme but whether its better or not will depend on how good the works scheme is.

3) what will happen if i don't contribute to this scheme? is there a default pension that we will all get (by law) when we reached retirement age?

Whether you contribute to the pension or not, you still get the state pension. Just over £5000 a year is the current basic state pension.

4) i've heard about State Pensions/ Stakeholders pension etc... what are these?

use google.

5) If i don't contribute to any pension scheme then willl i be moneyless when i reach retirement age? or will the government pay me a pension by default?

if you do that then plan to live on £5k a year

jennifernil

http://www.pensionsadvisoryservice.org.uk/

start here

I must say, as a graduate, I would have thought you would know how to find stuff out!
Just regard it as research, like any other research.

sa_06

Jennifer, I think the OP might have got some of your backs up by asking a few very general questions which should have been googled first... but being only 2 or 3 years older than the OP, I honestly can't stress to you enough of how little people of my age know about pensions.

It's such an alient concept to a lot of friends/people I graduated with that articulate, competent university grads don't have any idea of how pensions work. I've been doing a LOT of reading recently (old threads on here, posting one or two queries myself) and looking back to only 3 or 4 weeks ago I'm shocked at the level of ignorance about how pensions work I had.

Unfortunately I don't think my situation, or the ignorance of the OP, is unique. It's truly scary that parents, schools, etc have created a significant proportion of the younger generation as a bunch of pension illiterates -or at least that's the way it seems to me, at 26.

jennifernil

No, he (?) didn't get my back up, I am just rather bemused that a graduate does not appear to know how to find stuff out!

I don't know that we can expect schools to teach young people about pensions. I suppose some could ask their parents, but possibly a lot of parents do not have much knowledge of pensions themselves.

Do companies not hand out info on pensions to new employees? Certainly my own husband got plenty of info when he started work way back in 1970.

System

Theresonly1 wrote: »

Is there any books etc.. on pensions?

There ARE plenty.

Elaina_Walker

Really pension is so important. When we are young we are able to work and earn money for our requirements. But as we become oldies, no job and no earning. So to make our life secured we should get enrolled in pension schemes, through the company or personal schemes. Little bit of saving now can really help us in future. Pension schemes also have tax advantages. But there are many companies which are not giving enough information to the employees about such schemes. This is the right and also the need of the employee, and the employer should provide that.

p00hsticks

dunstonh wrote: »

Whether you contribute to the pension or not, you still get the state pension.

At present, that is on the proviso that you have made thirty full years of adequate NI contributions, although that may well have changed by the time the OP comes to retire (as might the fact that you get one at all!).

That's the main problem with pension planning - it's very difficult to know what state aid will be available then, or what your own personal cicumstances will be.