Pensions are very risky?

mgdavid

Pensions may well bring an element of risk, but not nearly so risky as trying to survive in old age with no money

DonM

Pensions are not investments and neither are ISAs. Both are tax efficient savings vehicles. Pensions are more tax efficient but also more inflexible than ISAs.

What makes a pension good or bad is how it is invested. This can either be done on your behalf, by your company for example, or by yourself through a self invested personal pension scheme. However the money is invested it will perform better than if it wasn't in the tax wrapper.

For a decent pension pot save a lot and start early. As a rough guide...
saving 10% of your salary each month will give you 36% of your final salary if you start at 30, 20% if you start at 40 and 10% if you start at 50. This is a rough figure only using a few assumptions.

Owlman45

mgdavid wrote: »

Pensions may well bring an element of risk, but not nearly so risky as trying to survive in old age with no money

Good point and this is why it will pay you to understand as much of the jargon that the Key Facts brochures for your CM pension policy give as early as possible.

dunstonh

No one seems to have mentioned the fact that to get your retirement money to live on you have to either buy an annuity or go the income drawdown route for which you will be charged a pecentage.

The alternatives have the same charges as drawdown. So, its not really an issue.

I have been trying to make sense of personal pensions since the 1980's all I can say for certain is that the government will change the rules and will probably make an already complicated system yet more complex.

Yep. Pension simplification in 2006 being the biggest joke

TrustyOven

Thanks everyone!

I'll be re-reading everything you all wrote, in the next few days.

I've got my work pension application form today.
It will take a couple of weeks to get things set up, so won't get it done before next pay-day (which is tomorrow).

At least I started the ball rolling.
I have a pension transfer form as well - I will need to read all the literature and also phone CM to double-check transfers, but seems there wouldn't be a problem transferring.

atush

Good to hear you got the ball rolling then, now dont' you wish you'd asked us a few weeks previous and now you'd be in lol