Pension, work / state?

Debt_Free_Chick

How many people are in the company you work for? At some point "soon" your employer will have to set up a workplace pension scheme; put you in the scheme and also pay in to that scheme for you. When this happens depends on the total number of employees in the company, but you could ask now.

That said, the minimum contribution to these workplace pension schemes is very modest and you will almost certainly have to pay in more. But it would at least offer you easy access to a decent pension scheme, with employer contributions thrown in too.

atush

In post 6 the OP says there is a pension with a modest 2-3% employers contribution.


I agree the OP should pay in more than 3%, but if finances are tight, they could increase contribs in future each time there is a pay rise.

SantaKlaus

R_P_W wrote: »

You still have 30 plus years of work to go! Where have you read it's too late? Surely something is better than nothing?

Yes but the "something" would not be as much as it would if i were to save it myself i think, think of it like this:

1) I save into a pension for 30+ years, at the end i will only get a tiny amount paid to me per month (due to not saving at a earlier age), by the time i die i will not get back ANYTHING near what i paid in. Even if i take out the 25% lump sum that i think pensions give you, although if i take out the 25% the monthly payment would obviously be even less.

2) If i save into a saving account i will be able to take it all at once, a lump sum, whenever i want. Although i will not get any contribution from my work.

Bearing in mind that my life expectancy is 20 year less then other person (I'm Diabetic type 1) according to diabetes UK estimates. They say that people born after 1965 have a life expectancy of 69 years, my retirement age is 68! Therefore which would you do? Pension or own savings?

SantaKlaus

atush wrote: »

How do you know if people don't like Thai? You have a pub?



You do not need a financial advisor just yet. What you need to do is two things (on Monday !!!!)


Join your work pension, and make sure your wife has the CB in her name.

I have already asked about the work pension scheme, i have to wait until february as the work pension scheme can only be joined at one short period during the year, after that period passes i have to wait another year.

SantaKlaus

Debt_Free_Chick wrote: »

How many people are in the company you work for? At some point "soon" your employer will have to set up a workplace pension scheme; put you in the scheme and also pay in to that scheme for you. When this happens depends on the total number of employees in the company, but you could ask now.

That said, the minimum contribution to these workplace pension schemes is very modest and you will almost certainly have to pay in more. But it would at least offer you easy access to a decent pension scheme, with employer contributions thrown in too.

But how "very modest" would a pension be on only say £80 - £100 paid in every month (that total includes the work contribution paid in too). I cant see the monthly pay out being much at all, i need to speak to someone about it really as it would probably be more benificial for me to save it myself in a savings account then i'd get it all back, with a pension i'd probaly die before i even got a tiny bit back lol.

xylophone

I work in the wood industry (I'm a wood machinist), yes they have a pension scheme but i've said no every year when asked if i want to join because i cant afford it. I'll have to join it now, atleast they will add some to it, i cant remember how much think, i think it's 2% or 3%.

Oh dear! I knew somebody who "could not afford" to join his employer's excellent FS pension and did not do so for many years.

At some point, he was required to join and did so - the money was found.

Come the day he died suddenly several years before Scheme Pension Age (although his widow had just retired on a tiny pension and state pension) you may imagine how grateful she was to receive a widow's pension from his scheme and the lump sum death benefit.....

In your position, I would join your employer's scheme.

atush

SantaKlaus wrote: »

Yes but the "something" would not be as much as it would if i were to save it myself i think, think of it like this:

1) I save into a pension for 30+ years, at the end i will only get a tiny amount paid to me per month (due to not saving at a earlier age), by the time i die i will not get back ANYTHING near what i paid in. Even if i take out the 25% lump sum that i think pensions give you, although if i take out the 25% the monthly payment would obviously be even less.

2) If i save into a saving account i will be able to take it all at once, a lump sum, whenever i want. Although i will not get any contribution from my work.

Bearing in mind that my life expectancy is 20 year less then other person (I'm Diabetic type 1) according to diabetes UK estimates. They say that people born after 1965 have a life expectancy of 69 years, my retirement age is 68! Therefore which would you do? Pension or own savings?

The SOMETHING saved in a pension will Always be more than you can save yourself as there is both free money from your employer, and also tax relief. Say you put in 40, your employer puts in 40, then the govt gives you tax relief on 80- that makes 100 into you pension. That is 100 that cost you only 40 (even less if they have salary sacrifice and you save NICS too). If you put 40 into a savings acct, you have just- 40. 40 0r 100- which is better?


So your point 1 is clearly wrong, yes you get 25% tax free as a lump sum and an income from the rest. But this income will soon pay you more than you put in (as you will have investment growth for 30 years and each 100 could be 300 or even more)


Point 2- you could take your cash saving and spend it anytime. But this is bad too, as if you spend it you wont' have it when you retire. Everyone needs cash savings as well as a pension., Ideally you will do both eventually.


AS far as your LE, you have those figures wrong too. Normal LE for a male born in 1965 is much higher than 69.

atush

SantaKlaus wrote: »

But how "very modest" would a pension be on only say £80 - £100 paid in every month (that total includes the work contribution paid in too). I cant see the monthly pay out being much at all, i need to speak to someone about it really as it would probably be more benificial for me to save it myself in a savings account then i'd get it all back, with a pension i'd probaly die before i even got a tiny bit back lol.

AS I explained before, save into a savings acct instead of pension, and you are throwing money away. And also if you die before retirement, your wife and child would get your pension money. Which will be more than your savings so they would be better off.


100 paid in a month, will provide an income (even if small) that will be far better than just trying to live on the State pension.

SantaKlaus

atush wrote: »

AS far as your LE, you have those figures wrong too. Normal LE for a male born in 1965 is much higher than 69.

Did you miss out the important part about the medical condition? I'm not a normal person in terms of being "healthy". I'm diabetic. LE for someone who ISN'T diabetic is higher then 69 yes, but NOT for a diabetic, this has had many years of study.

SantaKlaus

I shall be joing the work pension anyway, but i'm not keen on the part i read online that if i die the pension can have 55% inheritence deduction taken from it! lol