At 24, should I worry about a pension?

stclair

meer53 wrote: »

At 24, yes, you should worry about a pension. If you don't, when you get to retirement age you will worry even more.

Start a pension now, pay as much as you can afford into it.

I have my own little theory pensions are questionable.

Personally I'm 38 and think by the time I get to retirement age if their is one by then I'll just be expected to work until I die at my desk.

cupofjava

Damn, you're a condescending bunch!

Considering the auto enrollment age is 22 and I know people reaching 30 who have no pension yet, I would say I've got plenty of time. You also don't know my personal circumstances.

Anyway. My worry was what would happen to multiple pension schemes over multiple jobs. But since everyone's just focused on telling me to just shut up and join without understanding the ins and outs, I guess I'll just go back to the independent advice sites.

Linton

stclair wrote: »

I have my own little theory pensions are questionable.

Personally I'm 38 and think by the time I get to retirement age if their is one by then I'll just just expected to work until I die at my desk.

Your retirement age is the age at which you can afford to retire, not some number decreed by government. If you want to work until you drop not paying into a pension is a good way of achieving that aim.

cupofjava

PuzzledDave wrote: »

No, the time to start worrying about a pension is the day you start work as an adult. However, lets not get too hung up on the idea you are already a little late to the party but that you are considering showing up at all.

Look at it this way, assuming you have been employed for the 3 years since leaving university you could have put away just £50 per month and probably gotten your employer to match that. Total missing from you pension pot today:

£50 (yours) + £10 tax relief + £50 from employer = £110 x 36 months: £3,940

If you could have gone to £100, that would be: £7,920

And that's ignoring the hefty gains almost all funds have enjoyed over the last three years. If your employer has a final salary pension or similar -- the loss you have made is even larger.

I read elsewhere that you are concerned about moving/changing jobs... Well, sad as it is a job for life has long gone the way of the Dodo. No matter what your job is you cannot be sure that in 6 months you are not looking at redundancy/injury/company closure/other.
What will happen to your pension depends on the scheme but most likely it will be gaining slowly thanks to the investments your money is put into, best to think of it as a savings account -- it'll sit in the pension company until you retire.

I appreciate the point you're trying to make. My first job was minimum wage and offered no pension. With this job I'm just finishing my probation which gives me access to the company scheme.

I did ask specifically about changing jobs, because I don't see a job as being a job for life. I was questioning what would happen over to all the different schemes from the different jobs

PeacefulWaters

cupofjava wrote: »

So what does happen when I change jobs? You've all said that it's possible but surely having many different small pots becomes time consuming and costly to manage?

Many employer schemes will allow you to transfer a pension from a previous employer. A piece of paper shorter than a job application form and it's done.

Alternatively you can transfer funds into a private pension. So you could progress through life with numerous different employers and just one or two pension pots.

Costs are usually a percentage of the fund. No additional cost for having multiple funds, although the percentage charged can carry from one to the other.

Not to mention many advice sites suggest the possibility of fees involved with doing so. Who has actually done this?

You don't heed an adviser to move a fund from one provider to another.

I will be moving on within the next year. Aside from getting fired I'm not sure what I need to understand about how long being at a company for may not be my choice? If I move across the country I obviously won't carry on working for the same company.

Just maximise the employee benefits you can get, whoever you work for.

mgdavid

cupofjava wrote: »

....... I was questioning what would happen over to all the different schemes from the different jobs

that was answered in post #2; I think Atush is having a good Christmas so I'll repeat it here without the typos ;-)
As for moving pensons, it tends to be fairly easy.
Easiest is to move ALL of the fund (not just your part but ALL) in to your new pension.
Or leave the money in the old pension if allowed.
Or move it to a personal pension.

MoneySavingUser

cupofjava wrote: »

Anyway. My worry was what would happen to multiple pension schemes over multiple jobs.

You are getting too hung up on this point - as mgdavid says you can either transfer it to another pension or leave it in the old pension - as you don't want multiple pots you would transfer it to another pension (either your new employers or a standalone one).

There are sometimes charges for admin when doing this but they will be a lot less than the free money that you are losing out on at the moment (tax relief and employer conts)

kinger101

cupofjava wrote: »

Damn, you're a condescending bunch!

Considering the auto enrollment age is 22 and I know people reaching 30 who have no pension yet, I would say I've got plenty of time. You also don't know my personal circumstances.

Anyway. My worry was what would happen to multiple pension schemes over multiple jobs. But since everyone's just focused on telling me to just shut up and join without understanding the ins and outs, I guess I'll just go back to the independent advice sites.

Shooting the messenger.......

suse*

The question all comes down to when do you want to retire really. The sooner you start even small contributions the more options it will give you later on. If you're happy to work till your 68 or more, and think you won't get sick or need career breaks for kids or anything (I can't see if your male or female) then maybe you don't need to hurry.

There are lots of calculators you can play with though to see how big a fund you need to save up in the next 40 years, and you may be shocked just how much you need. If you want to retire earlier you need even more money as you'll have less time to save it as well as that money needing to last you a lot longer. Have a read though "the number" thread for what people think they might need to live on then try that in some of the calculators and you'll no doubt be as shocked as I was.

I started late and regret it deeply, I didn't work anywhere that offered a pension before here but now I understand just how behind I am I wish I'd started much earlier.

As for moving pensions and merging them until you have a few I wouldn't worry about that just yet. You can see when you're in that situtation which has the lowest fee's etc then decide what to do. If you have any way of getting into a db pension as well grab it with both hands else you need to start saving up your 600k+ now like the rest of us.

The other benefit of a pension is you can't be tempted the same way as you would with an isa, if you can you probably want an s&s nisa as well to help with retiring early as you want as many options as possible really. Also pensions aren't mean tested for benefits etc, so if something happened and you couldn't work, you at least would be glad of the money you had paid in while you were working later on.

jamesd

cupofjava wrote: »

I was questioning what would happen over to all the different schemes from the different jobs

There are three relevant types of pension for this:

1. defined benefit pensions, like final salary. For these you'll usually be refunded your personal payment into the pension if you're there for less than a year. Unless you work in government or other public areas you probably won't have one of these available.

2. NEST. This one can't be moved or combined so you're stuck with it as one extra pension pot to track. This will probably change sometime but that's how it is now.

3. the rest: group personal pensions or any other defined benefit pension. These are most of what you will see outside the public sector. Combining them is as simple as filling in a transfer request form. You'll probably be able to transfer in the pension from an old job into the pension scheme at a new job. Or you can set up your own personal pension and transfer the pension pots from each job into that.

To make this easier the current government has announced that if it is still in power it'll probably implement a "pot follows member" scheme so that pots by default get moved when people move jobs, so this all becomes automatic.