John Lewis pension

[Deleted User]

Hello

My daughter is 18 and has a part-time job at John Lewis, she's still at school. She has been invited to join the pension but we're not sure if its worth doing. It looks like an excellent scheme, the first 3 years are defined contributions and then after that it is a non-contributory defined benefit.

However, next year she plans to start university and although hopes to be able to transfer to another John Lewis/Waitrose branch, this would be for a maximum of 2 years. After this she may not work again for the company.

Is it worth starting a pension for what might be for only 10 months to 2 and a half years? I would appreciate any advice on this.

Many thanks

dunstonh

It looks like an excellent scheme

it is

Is it worth starting a pension for what might be for only 10 months to 2 and a half years?

Yes it is. Two reasons. It is an excellent scheme and you should be encouraging an 18 year old to make sensible financial decisions and get into a habit of saving for short term, medium term and long term.

Spirit_2

My DD took a casual job when she was 17 with an employer who had an excellent pension scheme which she joined when eligible as we explained why the employers contribution was 'free money', and she accepted this advice although she had other spending priorities at 18.

Quite unforseen was that she continued to work for them during her gap years (she had one pre and one post her undergrad degree!) and is now there 30 hrs a week whilst doing an MA part time. As she has has had a sizeable promotion her pension pot has had a healthy jump.

As she is enjoying what she is doing, she may stay on post grad if that is what she chooses.

opinions4u

The worst scenario is that she leaves the company sooner rather than later. And gets her contributions refunded.

The best scenario is she gets a final salary pension scheme and retains rights to it even if it's closed to new staff at some point in the future.

While there are numerous possible outcomes between these extremes, the decision today is a no brainer.

Sign up.

mania112

as you've seen, there are no downsides to taking up their pension.

xylophone

And she might end up wanting a graduate traineeship with JL?

Cavemanu

...or in later life.... maybe take up with them again!

With final salary pensions the employer is often contributing 15-26% on top of what the employee is paying in (or if non-contributory even better!)

Go for it, probably one of the best pensions you can still get!

[Deleted User]

Thanks for so many helpful responses, my own feeling was that she should go for this, but now I am in no doubt!

This was my first post on the forum. Thank you everyone for the great advice.

jayship

JL pension use to be non contributory from the start and they automatically enrolled you when you joined. It has moved on and now the first 3 years are defined contributions. It is an excellent scheme with excess reserve and goes up annually.