Pension Advice - Where to go?

DB_XIII

Hi all,

I am currently 21 years old and want to start planning for the future and my retirement.

I currently work in the public sector and was automatically enrolled on the company pension scheme upon employment. This was paid 4% by myself and 8% by the company however I opted out as I wanted to see and have access to all of my earnings.

I am a good saver and planned to put 15% of my salary into a savings account and look for a private pension as I was told they should be more secure. People at work were worried if the company went under they/the government would take back their input into the pension, so many employees opted out when I did.

However, I am wondering was this foolish of me? Are public pensions secure, if not what should I be looking to do in terms of putting money away for retirement?

I hope someone can help as I must admit I know very little on pensions and how they work, I am just worried I won't be able to opt back in now if I made a bad choice.

Thanks.

CLAPTON

DB_XIII wrote: »

Hi all,

I am currently 21 years old and want to start planning for the future and my retirement.

I currently work in the public sector and was automatically enrolled on the company pension scheme upon employment. This was paid 4% by myself and 8% by the company however I opted out as I wanted to see and have access to all of my earnings.

I am a good saver and planned to put 15% of my salary into a savings account and look for a private pension as I was told they should be more secure. People at work were worried if the company went under they/the government would take back their input into the pension, so many employees opted out when I did.

However, I am wondering was this foolish of me? Are public pensions secure, if not what should I be looking to do in terms of putting money away for retirement?

I hope someone can help as I must admit I know very little on pensions and how they work, I am just worried I won't be able to opt back in now if I made a bad choice.

Thanks.

What sort of public sector company can go bankrupt?

what sort of pension was it ? Final Salary scheme?

but basically you are throwing away 8% of your salary

opt back in asap

dunstonh

This was paid 4% by myself and 8% by the company however I opted out as I wanted to see and have access to all of my earnings.

dreadful decision and such a poor reason given the tiny amount involved.

I am a good saver and planned to put 15% of my salary into a savings account and look for a private pension as I was told they should be more secure.

I take issue with you saying you are a good saver. The pension is worth around 30% of your income but for around 2% of the cost. So, your net position is actually worse off. what you were told is wrong.

People at work were worried if the company went under they/the government would take back their input into the pension, so many employees opted out when I did.

They cant. Workplace myths are frequently wrong. Especially in the public sector.

However, I am wondering was this foolish of me?

Possibly the worse financial decision of your life. The pension will be the biggest purchase you make in life and so far, its the wrong decision you have made. it really is a bad one.

bigadaj

OP, who do you work for?

atush

I really want to say Stupid, Stupid, Stupid.

But I am gonna say instead Foolish, Foolish Foolish!!!! Unwise in the extreme. Worst decision EVER!

If this is truly a Public service FS pension ( you keep saying company but that would not be Public Service) you have made a HUGE mistake but you can opt back in.

Even if this isn't a PS pension, you are throwing away 8% of your salary in Free Money, so should opt back in. and nothing is stopping you in adding 15% instead of 4% of your own if it is a MP plan.


You can have control of your money in a pension, you just can't spend it until you are older.

You can save outside the pension (with the 11% of the 15% you want to save) and this money will fully be in your control ( to spend, to lose, to have seized, to be spent instead of getting means tested benefits).

mania112

Don't know why all the dramatics.

Well done for realising the need to save for retirement at such a young age. Unfortunately, due to many reasons - many people will miss out on a comfortable retirement because they don't take action in their 20's.

And yes, there's no downside to free money from your company! Opt back in ASAP.

After which maximise your ISA allowance every year, and you're good to go.

redbuzzard

The good news is, you're 21.

Free money, as mentioned above, take it.

Your 4% will cost you 3.2% net, and 12% goes into YOUR fund. Not the employer's, YOURS. Every £3.75 in your fund costs you £1, an instant 275% profit on your investment if it's a money purchase scheme. If it's a defined benefit scheme it's probably even better value for you because what you are saving for is guaranteed. Need I go on?

No real damage done - just opt back in. I know people of 50+ who wouldn't join a pension scheme because they think it somehow amounts to the company conning their wages back out of them. They are the real tragedy.

paul5046

I think you get the message, opt back in. I'd love to have a pension where my employer contributed ANYTHING.

JoeCrystal

paul5046 wrote: »

I think you get the message, opt back in. I'd love to have a pension where my employer contributed ANYTHING.

I agreed. Even worse! My employer does not contribute anything but only provide Group Pension with a choice of five funds!

So I got my own instead... Looking forward to autoenrollment just to see how my employer would do (Most likely opt for NEST)

I agreed with redbuzzard, you are still young which mean you can fix with no problem! Which is a great relief!

Thanks,
Joe