Are the young losing all faith in pensions?

lippy1923

I don't think it's just the young. It's people who don't care enough to bother to learn what they need to have for the future.

I have not had any pension advice from anyone (not even my parents) but I still took out my work pension when I was 18 as soon as I started and have been paying in ever since (23yrs old now)

I just figured that common sense tells me I need something if I want to stop working at some point in my life.

Although my colleague did make me laugh a while ago. He is 21 and I mentioned he should start the work pension as it's very good. He said he'd rather save up £600 for his holiday in Ibiza :rotfl:

richbeth

geelamch wrote: »

Just lurking around various posts on pensions only.(forget property,investments and isas etc) the vast majority of posters here are in final stages of pension so to speak.do you think this is pretty representative of the pension position of most people these days?
I was pretty lucky to have received some guidance from a co worker in the earlier years .whether he was financially savvy or not isn't clear but he knew that doing something was better than nothing.
Maybe it's time to have a more concerted / education to the younger generation or I fear big problems in the future.

I'm 46 and have been saving into a pension sine I was 21.

I personally think the problems are related to a number of factors including education, the portrayal of pensions in the media and the complexity of the pension market. At best articlaes covering pensions describe them as are 'boring' at worst the headlines are scare stories about how someones £50k pension pot ended up being £15k, how people have lost pension pots, why you'd be better off with an ISA, how the charges are so high etc etc (all the above obtained in 5 mins looking at some newspaper websites). Anyone just doing some cursory investigation would surely think that it was a minefield and turn their attention elsewhere.

If you get through all that and do want to open a pension it can be quite confusing over where to start, which company, what charges, where to invest so another barriers.

I'd be interested to know how many people first had an occupational scheme and then moved to AVCs (or whatever). I have a feeling that you're more likely to start AVCs once you get used to the idea of a pension and see the fund size starting to grow but I have no empirical evidence to back this up !

R

AlwaysLearnin

I got lucky, joining a firm with a non contributory DB pension from 21. I paid no attention to it (and therefore had no real appreciation of it...) until they started to ask for contributions - now 10%.

When I was initially reading up I remember how it was a bit of a nightmare to understand - having to tie your money up for so long (apparently at the mercy of changes by the govt and/or company, with no 'take the money and run' facility in the mean time), and rules that didn't seem to make sense (e.g. our scheme rules allow for two people on the same end salary to get the same pension, despite the potential of one being in/paying in to the scheme up to 10 years less - still confuses me now, let alone when I was starting out!) etc

I persevered though, and now I have a plan to get out of the rat race early - pensions (including AVC's) play a big part of those plans.

Although I acknowledge that you can't help some people, I also understand why people may find it difficult to get their heads around, which may lead to them not doing so.

atush

Possibly some valid points in there, but might be lost like yesterday's as I think you are on the sauce again ;-)

And try hitting return twice now and again. Capitals and an extra space between sentences doesn't go amiss either if you want to make it easier to read.

Edit: To reflect the post was removed I was referring to, and was not aimed at Always!!!

stinktankcynic

JoeCrystal wrote: »

That is a problem. I recalled that roughly half of employees aged 18-30 do not save into pension schemes. Which is depressing but what I also find is the fact that most pension schemes are unpredictable in their nature and I believe that is a trouble. Surely more people would be willing to save in pension scheme as long there is a real certainty on minimum income. Something like guarantee of minimum percent payable as part of index-linked cost of contribution. That is my take on it anyway.

As a young person (27 years old here, I like to think so!), I actually do not have that much faith in my own pension scheme despite contributing considerable percent of my basic wage into it but I am also painfully aware that doing nothing is still much worse than do something and if I was to do something then I will make best effort of it!

Cheers,
Joe

A lot of firms don't offer them to employees. If firms paid 5%-10% in for employees on total wages, and the employee could pay in what they want, then there would be people who would jump at the chance. Instead we have the new two tier system of auto-enr a low amount on part of the wages for us, and they get final salary schemes or bigger employer cons. The current state pension was good, they have screwed it up now, many don't realise.

atush

A lot of firms don't offer them to employees.

Again I will mention this is no longer the case, although asking for 5-10% is not going to happen in most cases. Employers will shortly have to pay into a pension for employees by law.

mark55man

hugheskevi wrote: »

... Then along come children and childcare costs/loss of earnings. I understand those costs lessen as kids get older and go to secondary school but that is still the best part of a decade....

Great post hugheskevi, but as a 50 year old with 4 teenage children I can assure you that the costs don't get less - a baby or toddler or even primary school kid need very little (although I confess we spent way too much), but teenagers have lots more needs and pressures and opportunities (eg school trips)

There are three schools of pension planning IMHO
- those who don't bother and get what they get
- those who have accepted that they will work through till State retirement and are trying to maximise the return and hope the provision will be OK
- those who use the pension as an opportunity to work out their priorities and balance their pension investments to maximise chance of achieving it

Whilst in my private sector FS scheme I was in class 2 (maybe even class 1). When my FS scheme was stopped and I became a DC contributor I wasn't happy but it definitely moved into type 3.

I am now actively planning and balancing to be able to retire early and whilst this may only be at 60. I wouldn't have taken the time to inform myself and learn about the whole range of investment topics. Funnily enough since I did start all that reading my investment performance (in all investments) has improved