When is the best time to start saving towards retirement?

Swash

Hi everyone,

I'm 27, single, no children (but would like them one day) and I am planning on buying my first house next year. I am now in a good position, financially, where I have barely any outgoings and.p a reasonable salary.

If I asked my friends this question they would probably laugh at me because I'm not too close to retirement age yet. But when is the best time to start thinking about pensions? My workplace currently pay into one for me, which isn't a lot.

Please forgive me for my lack of pension knowledge but I really don't know where to start. If I made my own pension contribution, would that be in a savings account or is it in a specialist account for pensions. I know I sound so stupid here but I'm trying to avoid getting to retirement age and having nothing to live off, other than the state pension.

Thanks in advance x

TadleyBaggie

Doesn't your employer have a pension scheme? That would usually be the best starting point.

xylophone

Doesn't your employer have a pension scheme

The OP said

My workplace currently pay into one for me, which isn't a lot.

The OP can check whether if he made additional contributions to his employer's scheme, the employer would match the payments.

Otherwise he might consider contributing to a personal pension.

http://www.cavendishonline.co.uk/pensions/stakeholder-and-personal-pensions/ might be worth a look.

HappyMJ

Swash wrote: »

Hi everyone,

I'm 27, single, no children (but would like them one day) and I am planning on buying my first house next year. I am now in a good position, financially, where I have barely any outgoings and.p a reasonable salary.

If I asked my friends this question they would probably laugh at me because I'm not too close to retirement age yet. But when is the best time to start thinking about pensions? My workplace currently pay into one for me, which isn't a lot.

Please forgive me for my lack of pension knowledge but I really don't know where to start. If I made my own pension contribution, would that be in a savings account or is it in a specialist account for pensions. I know I sound so stupid here but I'm trying to avoid getting to retirement age and having nothing to live off, other than the state pension.

Thanks in advance x

Me personally I wouldn't save too much in a pension fund when you're that young.

I'd buy a property first and pay the mortgage off first.

I prefer to invest in my BTL property which is effectively my pension. It's not tax efficient but I can liquidate it whenever I want and do anything I want with the money at any time. I don't have to wait until I reach a certain age before I can spend it.

When I get to pension age I'll still have the rental income and also get any basic state pension on top and if I liquidate it I'll have a big chunk of money in the bank which I can live off.

Swash

Thanks for all your replies. I am in the forces so will receive a forces pension. To be honest I'm not really sure how it works, but I'm not planning on staying in the forces to be entitled to the 'full' pension.

Thanks for the link xylophone, I will have a look now.

I am planning on overpaying my mortgage anyway but though pt it might be a good idea to save some of my wages also.

Thanks again.

Goldiegirl

When is the best time to start saving towards a pension?

As soon as you start earning.

The earlier you start, the earlier you can retire.

dunstonh

When is the best time to start saving towards retirement?

from the day you are born.

If I asked my friends this question they would probably laugh at me because I'm not too close to retirement age yet. But when is the best time to start thinking about pensions? My workplace currently pay into one for me, which isn't a lot.

twenty years ago, it is was normal to get people to pay into pensions from 18 or as close to that as possible. Getting into your 20s was considered late. Attitudes have changed because there is less personal responsibility nowadays.

If I made my own pension contribution, would that be in a savings account or is it in a specialist account for pensions.

A pension is a pension. A savings account is a savings account. Pensions are a product type. So, if you make a pension contribution then that means it is going into a pension. Not a savings account. Your goal may be "retirement planning" it is not "pension planning".

Savings are great for short term but awful for long term.

I paid extra in during my 20s and I am now very thankful that I did. The longer you leave it, the harder is it. You need to be wary of those saying not to put aside more as anything you put aside in your early years is going to be greater than putting nothing aside. Plus, leaving it until later is going to cost you a heck of a lot more due the shortened timescale.

I am in the forces so will receive a forces pension.

its a good pension. Why do you think it is not a lot?

Swash

The forces pension changes almost yearly, usually for the worse. I'm under the impression that to receive what people think is the 'good' pension, I would have to serve 22 years. I don't plan on doing this, so I am looking at other options. I will ask about the facts in work though. It changes so much that nobody seems to know the facts.

I think I am going to start paying into one now. Thank you all for your replies, and for bearing with my lack of pension knowledge.

Swash

dunstonh

I'm under the impression that to receive what people think is the 'good' pension, I would have to serve 22 years.

For the years you serve, the forces pension will be the best option. When you leave service, you will look at what you need to do with those future years. It doesnt mean that the forces pension is no good if you dont do 22 years. Each year in there is valuable.

justme111

As someone who were in your shoes not so far ago I understand how daunting it is , if you don't fancy doing legwork you will not go far wrong with contributing maximum matched to work pension. PS. Don't be so sure your mates know nothing about it either , it's just not cool topic to discuss ,you may be surprised.

justme111

What dunstonh said. I think u do not realise how much more you would need to pay to get the same "not that good " amount if you were contributing privately.