Should I pay into a pension at all?

Triumph13

He's talking about risks such as changes in regulation, changes in personal circumstances, etc rather than investment risk

PensionTech

He's talking about risks such as changes in regulation, changes in personal circumstances, etc rather than investment risk

If that's the case doesn't it make it rather difficult to find someone who can comment on the difference between the two, as they suggest?

Option 1: "I didn't save into a pension and instead put all my money into ISAs and liquid assets. I didn't need to dip into it. When I got to retirement I had far less than if I had saved into a pension with my employer doubling my contributions."

Option 2: "I didn't save into a pension and instead put all my money into ISAs and liquid assets. I lost my job and was at risk of losing my home but could use my savings to pay off my mortgage. I do however now have little to no money left for retirement."

I don't think either testimonial could provide any helpful advice on what is best for the OP.

As for regulation... I'm even less sure how someone could provide a view on that.

Triumph13

If I was being mean, I'd say he's hoping against hope to get someone to come on and say that they took what he considers to be a 'low risk' route and found it to be the right decision. He can then ignore everyone who disagreed ads they're clearly biased and feel vindicated because someone agrees with him.

I suspect he will have a long wait as a large proportion of those following his route and sticking with it to the bitter end won't be able to afford an internet connection as they're spending all their money on petfood to eat.

jbmadd

One thing I find with these forums is that you tend to get very different opinions on different parts of the forum. The problem is, if you post in the pensions area, you end up with a bit of a one-sided view.

For example, there's a thread on the savings and investments board where several people were advising that someone was too young to be putting money into his pension. Again, the average poster there may be a bit biased because maybe they've tended to put more into savings and investments outside of a pension. I think once you go down a particular route, you can't help but be a little biased towards it.

@Triumph13 - it's not mean, I can see why you would think that.

I have just signed up to the maximum matched contributions with my employer. I'm convinced! Although I won't be putting in anything above the matched contributions for a long time!

Dunnit

I know my priorities

http://www.telegraph.co.uk/finance/personalfinance/investing/10742396/When-saving-for-10-years-pays-more-than-saving-for-40.html

Thrugelmir

jbmadd wrote: »

One thing I find with these forums is that you tend to get very different opinions on different parts of the forum. The problem is, if you post in the pensions area, you end up with a bit of a one-sided view.

You'll actually find that the wisest owls have a range of investments to suit different needs. There's no one asset class or type of savings plan that I adhere too rigidly personally.

At the end of the days its money that makes money.

atush

For example, there's a thread on the savings and investments board where several people were advising that someone was too young to be putting money into his pension. Again, the average poster there may be a bit biased because maybe they've tended to put more into savings and investments outside of a pension. I think once you go down a particular route, you can't help but be a little biased towards it.

Pretty sure I was over there swimming against the tide saying the early years are the BEST years for paying into a pension.

In any case we worked abroad and couldn't have a pension when young. When we could, we did, but I was in my 30's by then, OH was wrong side of 40. So we have been saving hard in one. Yes, money we built up enabled to buy (or in our case build) a house. which was larger than needed and which we could not have afforded to buy on the open market so made money for us.

BUT, if I had to do it over again, I'd have put even more into a pension.

atush

Thrugelmir wrote: »

You'll actually find that the wisest owls have a range of investments to suit different needs. There's no one asset class or type of savings plan that I adhere too rigidly personally.

At the end of the days its money that makes money.

Well said. A good retirement is based on 4 things financially- we wont comment on the health, happiness stuff.

One is savings for short term needs, one is a home that is paid for so that you do not rely on the mercy of landlords nor do you have to pay the cost of renting. Yes, there are costs many of which you'd pay as a renter, and less as an owner than rent. Another is long term savings- these would be investments. the last is a pension fund built up over the years taking advantage of tax relief, and employers contributions.

These 4 things will help you to retire either early or at all. As no one I know (certainly not me) can live on the state pension.

Saying the money is better off in my wallet to be spent or even saved in cash, is not going to help you to retire.

Triumph13

jbmadd wrote: »

I have just signed up to the maximum matched contributions with my employer. I'm convinced! Although I won't be putting in anything above the matched contributions for a long time!

Congratulations!

And to give some balance I think you are absolutely right not to put anything above the matched contributions. Just to be perfectly clear it is ONLY the availability of the employer contributions which has led to everyone shouting from the rooftops that you needed to pay into your pension.

If they hadn't been available I for one would have had pensions a fair way down your list. Saving for retirement yes, pensions no. With no 'free money' in the equation I lean strongly towards using an ISA when young and then shifting it to a pension when older to maximise flexibility and in the hope of a contributing when in a higher tax bracket. Matched contributions are such good value though that they can't be missed whatever your age.

Best of luck on your savings journey.

worried_jim

OP- I started pension saving when I was 20, I am 40 now and have had during the last 20 years two work place pensions and a private pension scheme which I no longer pay into.

For a number of years I never really gave it much thought and shared the same outlook as you did.

For my current employee scheme I pay 5% and my employer pays an additional 13% so I save 18% per month and it costs me a third of that.

My pension statements come out every August and over the past few years it has started to get quite interesting/exciting as after 20 years of investing they really are starting to grow and this year I expect my total pension savings to increase by more than my total annual salary.

I used to help look after an elderly neigbour and he told me the best bit of advice he ever received from has Father was to save in a pension for the future and he did. He retired in 1984 and only passed away 18 months ago- he claimed his work place pension for nearly 30 years and wanted for nothing. Everytime he met a young person he would ask them about their pension plans!

Pension saving is not fun or sexy (to begin with) but I can assure you every August when I review my savings and look at some of the excellent online pension calculator tools I am satisfied with the projected income I may receive in retirement and it is certainly one of life's aspects that I don't worry about. As every pensioner will tell you- get a pension and you will be surprised how quickly the years fly by. Good luck- get saving.