Where Do I Start With Pensions?!

atush

The most imp thing in the meantime is to get that cash out of your acct before you get used to having or spending it lol. You can then put it in any pension as a lump sum once you hae decided which one and set it up.

fairleads

ncfcstar wrote: »

Yeah not really helping me is it, hopefully I get to 85!

Hindsight is a wonderful thing. Fortunately, at my age i have years of it. Hence the advice.

Loughton_Monkey

ncfcstar wrote: »

A little guidance would be appreciated, I'm more than willing to put effort into finding the best scheme for me, but I literally don't know where to start.

I'll tell you where not to start.

Do not start by reviewing the intricacies of various pension plans. This comes later. You must start by understanding the mathematics and 'reality' of life, which is this:

1. Throughout your working life, you will doubtless have ups and downs, good and bad, but let's assume you 'manage' your career successfully. Hence you will, over your working life, earn "£X".

2. Throughout your working life, you will need (or want) to spend a proportion of £X. That proportion is a function of many things. It is a function of (a) how many years you work (40?) and how many years you live after that without earned income (25?). In most cases, the proportion of £X that you can afford to spend is in the region of 75%. It is also a funcion of (b) how well you invest what you don't spend, (c) how long you are going to live after retirement, and (d) the age at which you wish to retire.

3. So control your spending, first and foremost, otherwise, whatever you do, you will have a miserably poor retirement (barring large inheritnces or lottery wins). Budget for everything. Do active financial planning and upsate every year minimum to see if you're on track.

4. Every £ you spend over and above the 'optimum' figure counts twice. In other words, every extra £1 enhances your lifestyle (to which you become accustomed) by £1 and reduces your retirement investment by £1. Basically this is a £2 'drop'.

That's the harsh reality.

As a subsidiary issue to this, there is the big question of "what to do with the money I don't spend". OK, this is where (potentially) pensions come into it. Maybe ISA's. And all the issues about charges, funds, providers etc. All reasonably important, but about as useless as a concrete parachute unless you are investing enough.

But do take time, first, to do your financial planning, and to control your expenditure. Without this, any other advice is secondary.

ncfcstar

fairleads wrote: »

Hindsight is a wonderful thing. Fortunately, at my age i have years of it. Hence the advice.

Good for you, I hope that I have the experience in my older years to offer the kind of hindsight you are serving up...

ncfcstar

To everyone who has offered up their advice I thank you, it has given me a lot to think about.

fairleads

ncfcstar wrote: »

Good for you, I hope that I have the experience in my older years to offer the kind of hindsight you are serving up...

When I reached your tender age I had already come to a decision about pensions - that they weren't for me. 44 yrs later and no regrets.

JoeCrystal

ncfcstar wrote: »

Thanks for that, I do already move money into my ISA each month, but this is mainly for a deposit on a house which will need to be used this time next year.

As I explained, my current employer does not have a pension scheme, so that is why I'm looking to set something up myself, especially after paying into the LGPS over the last 2 years.

Maybe it is worth visiting an IFA to talk about setting up personal pension. I managed to set up mine at age of 24 for example with an IFA after my employer told me that they do not contribute to pension scheme at all and the pension scheme is stakeholder...

However, please bare in mind that eventually, your employer will pay into pension scheme (NEST or some other pension schemes) in a year or quite a few years. The planned contribution is 8 per cent from October 2017, 3 per cent would be from the employer. Of course, the amount of the contribution is sufficiently enough is another question entirely.

atush

fairleads wrote: »

When I reached your tender age I had already come to a decision about pensions - that they weren't for me. 44 yrs later and no regrets.

If you can gurantee that like FL, you will never be made redundant, or in long term disability or any other sort of reason you would need benefits in the future. And if you can guarantee you won't ever be in a position to be sued in a civil court- you too can be assured that like FL ISAs and not pensions can be the best for you.

If you hold ISAs rather than pensions in the above and other cases your saving can be seized and given to others. If it was in a pension in the above and other cases, it would be safe from being used against you or taken from you creditors.

Just a thought.

But I assume that like me you are not privy to looking into the future so saving in both ways will be th most prudent course.