Saving for a Pension when Young and Changing Jobs

Smedders11

Hi all,

I'm normally pretty savvy with understanding finances, but there's something about pensions that I've never quite understood.

My wife and I are 24, and my wife is about to start back at work this month after coming off maternity. Nine months ago I managed to get into a graduate job and we're doing quite comfortably and are looking far ahead into the future. My wife will be going back as a care worker, and for some reason she wasn't automatically included in a pension plan with her employer (need to look into this). She knows she needs to start contributing to a scheme as soon as she starts, but looking into the near-ish future shes's unlikely to stay with them, or other employers, for a couple of years. She wants a career now, not just a job, the two major options being to train as a nurse through university, or find a role in which she has plenty of room to climb and progress a career.

Dependng on what the future holds, she's likely to be changing jobs a few times in the next coupe of years. How do we plan a pension around that? Does she just contribute to whatever scheme each employer has, or will she get the contributions refunded frequently and we'll need to put them to perhaps an independent pension company? Or will there be an option to transfer whatever pot she's accumulated to her new employer's scheme? Or finally, do we just end up with several tiny pots with different people, each contributing to a final pension?

As you can probably tell, this is mostly help understanding the basics of how pensions and funds operate. Currently I'm with the NHS pension so I'm quite stable, but should I decide to leave such information will be useful to me, too.

Thanks

HappyMJ

Depending on if you need the money or not I'd consider saving for times when she's not working in accounts where you can access the money rather than locking the money away for 40 years.

You could pay off high interest debt which can save more money in the long run than saving into pensions even though pensions are tax efficient.

I should say I'm anti-pension saving as I don't like how the rules keep changing amongst many other things.

I do have money stashed away in a pension but I no longer contribute.

d70cw6

Smedders11 wrote: »

Dependng on what the future holds, she's likely to be changing jobs a few times in the next coupe of years. How do we plan a pension around that? Does she just contribute to whatever scheme each employer has, or will she get the contributions refunded frequently and we'll need to put them to perhaps an independent pension company? Or will there be an option to transfer whatever pot she's accumulated to her new employer's scheme? Or finally, do we just end up with several tiny pots with different people, each contributing to a final pension?
Thanks

I'd imagine she'll essentially build up a pension pot in the er's scheme she's currently in. When she leaves that employer the pension pot will still be there, but no longer contributed into (unless you choose to). You can transfer the pension pot into a private pension scheme or the new employers scheme if you wish.

kidmugsy

If her employer will contribute too, she should join otherwise she'll be throwing away free money. Once she's moved jobs she can just transfer as d70 said.

cheesetoast

Each time she changes jobs, she'll be able to either transfer that pot to the new employer's scheme, or if the plan has "vested" (i.e. she's held it for more than a determined minimum period), it can become "paid up", where she stops contributing, and it just sits there (hopefully growing with good investments). She then opens a new plan with the new employer from scratch.