Dont have one not sure if I want one?

Mumto3cheekymonkeys

Hi all I have just been reading some of the posts about pensions and it has occurred to me that I don't have one and have never really been interested in having one.

Me and my OH save where we can (none atm ) but we were discussing this, his dad has had a bad experience and I know others who have so our plan was to save save save and get into property instead.

What are peoples opinions and/or advice I would be really grateful.

Thanks

sorcerer

Whilst it's true Pensions can be very complicated, I wouldn't dimiss it totally if i was you. Especially since you get tax relief for the money you put in, and it will not be regarded as capital with certain benefits. If you can get a work pension, then they will put money into it as well, which is basically free money.

Mumto3cheekymonkeys

But if I leave my company will I loose the money I have put in even if its part of my pension?

Skinto_7

Mumto3...,

Im no expert, and also wondering what to do with my pnsion/savings/etc going forward.

If its possible id advise that you check what your work pesnions have on offer, and if they will match you upto a certain amount, as many do, i would at least pay this in and then perhaps look at what to do with any surplus that wont be matched by your company.

Im sure some of the more clued up posters will be able to advise on what sort investments/isa's etc are a good route to go down with your surplus unmatched pension cash.

As for if you leave your employer your pension will still be there and not lost!

Pollycat

Mumto3cheekymonkeys wrote: »

Me and my OH save where we can (none atm ) but we were discussing this, his dad has had a bad experience and I know others who have so our plan was to save save save and get into property instead.

When you say 'get into property' do you mean keep going up the property ladder in your own property or buying to let?

If buying to let, could you buy a property outright or would you have to have a mortgage?
I think (unless things have changed) the rules and interest rates on buy-to-let mortgages are different from residential ones.
If you had to have a mortgage, what would you do if your property was empty for a while and you had no income for that property but still had to service the morgage.

Maybe you could clarify your plans about 'getting into property'.

Someone who worked with my OH decided the best idea for his future pension was to buy a big, expensive house (they could afford the repayments) with the plan they would downsize when the kids had left home and he was ready to retire, in his opinion the housing market would explode and the house would be worth much more than he'd paid for it.
Unfortunately, as his equity in the house grew, he used to remortgage to satisfy his expensive tastes for holidays and cars.
Now, years down the line, he's in the position that he has very little equity, the house is not worth much more than he paid for it and he's got no pension.

dunstonh

Hi all I have just been reading some of the posts about pensions and it has occurred to me that I don't have one and have never really been interested in having one.

You are looking at it back to front. Pensions are there to fill a need. Until you know you have that need, you wont know if you need pensions or not.

What do you plan to live on in retirement?

his dad has had a bad experience

Most bad experiences have nothing to do with the product/tax wrapper in question. They tend to be bad decisions made or decisions made or a lack of understanding. Or they are totally unrelated but confused with something else.

But if I leave my company will I loose the money I have put in even if its part of my pension?

No you wont.

Turning down free money is totally daft. Nothing beats free money.

Mumto3cheekymonkeys

Thank you Polly cat. We inherited a property last year and have been letting it ourselves which is too much hassle with children and we find the property is not being taken care of well and this upsets us (it has been in my partners family since it was built) My partner will make a small profit from this sale but we want to give some to his dad as his dad has helped us loads with money and we feel we need to repay him and the rest will go to clear the debts we have.

We have in the past wasted alot of money and living as we do now we see our mistakes and we feel we have learnt from them. We don't live an expensive lifestyle we share a car have never been abroad and tend to do sun holidays (would def recommend them!) our house is a nice 3 bed semi which is worth £140,000. our mortgage is low atm. The plan we had was when our youngest was in school I would go and work full time meaning that we could pay double our mortgage per month cutting this from 25 to about 13 years. Once our mortgage was clear I would be 39 and my partner would be 43 we were planning on trying for a mortgage then too. When our children have all grown we would be more then happy to downsize ( less to clean ) However thinking more about us paying it if it was not rented out seems to be a downfall and I now do not feel as confident in this plan which is why I am asking more about pensions as I really do not know anything about them.

Mumto3cheekymonkeys

dunstonh wrote: »

You are looking at it back to front. Pensions are there to fill a need. Until you know you have that need, you wont know if you need pensions or not.

What do you plan to live on in retirement?



Most bad experiences have nothing to do with the product/tax wrapper in question. They tend to be bad decisions made or decisions made or a lack of understanding. Or they are totally unrelated but confused with something else.



No you wont.

Turning down free money is totally daft. Nothing beats free money.

This is where my confusion was. I thought if I left my job I would loose the pension and any money I had put in to it I can now clearly see that this was wrong and as im due to start a new job I will ask them If they have a pension and for some infomation on it.

Many thanks for all the advice.:beer:

jamesd

Mumto3cheekymonkeys wrote: »

But if I leave my company will I loose the money I have put in even if its part of my pension?

Modern private sector pensions for new employees are defined contributions schemes where the money is yours (via the trustees, who are the legal owners to ensure compliance with HMRC rules). The company can't take that money back just because you leave, it becomes your each month as they pay the money in. You'll usually have the option to leave it where it is or you can transfer it somewhere else if you like. it's your own individual account, not a pool of money shared by many people.

There are more restrictions on the older defined benefit [STRIKE]contribution[/STRIKE] - final salary and similar - schemes where the money is held collectively for all employees, not in individual accounts for each employee. These can have an excess or shortage of money to pay the benefits that have been agreed and the Pension Protection Fund now provides a guarantee that most of that money will be paid out even if the employer goes bust. It's normally best to leave these where they are after leaving, though things like the public sector transfers club can make that untrue for members of such groups.

Mumto3cheekymonkeys

What if my employer doesnt offer a pension? Who would be the best company to go with and what type of pension (assuming they are different types) would be best? im only 24 now so would assume that by the time i retire (65+) I would have a good sum saved. I dont want to end up like my nan barely affording to live

atush

I have to say, with past debts (now being paid off) and with your experience of letting already, I cannot see you being able to 'get into' property. As you would need substantial cash/assets to do this and you currently ahve no savings.

I would suggest that you join a pension in your new job, and that your OH takes out a PP if his work does not. Apart from 'free money' from your employer, there is also tax relief ont he pension which goes in on top of your own contributions.

But first, you both need to keep out of debt, and start saving. I would suggest you need 6 months of all spending in cash deposits (ISAs if you are taxpayers). AS you have 3 children to provide for, you are sailing pretty close to the wind w/o savings at the moment.