pension advice ( please help! )

kayester

Hi I am 27 years old and I have never thought of having a pension before.
I work in a call centre part time currently £8k a year.

(hoping to raise my hours in next few months)

A few people at work today were talking about pensions so I have looked into work pension and I would like some advice please

How much should I be putting into a pension and what should I be looking out for.
I have never been educated on pensions so I would appreciate any advice given, thanks.

xylophone

Is your employer offering a pension scheme?

kayester

Yes not sure what though I am just wanting advice on what I should be looking for and how much

kidmugsy

If you feel you can afford it, it's probably best to contribute enough to the pension to ensure that your employer makes his maximum contribution.

Mind you, even that should take second place to your building up an emergency cash reserve.

xylophone

Yes not sure what though I am just wanting advice on what I should be looking for and how much

Ask and come back with the details.

Linton

Normally if you want to put enough into a pension to make a significant difference when you retire you need to be thinking 10%+ rather than 1-2%. However it will all depend on your circumstances and the Ts and Cs of the pension scheme.

In your case with an £8K income presumably you dont pay any tax and so the advantages of an employer's pension are probably much reduced - if the employer pension is paid gross, as most are, the tax relief to which you are entitled doesnt do you any good. And then you run the danger of having to pay tax when you take the pension.

As Kidmugsy said, an emergency fund should take priority if you dont have one. Then pay in sufficient to get the maximum employer's contribution.

xylophone

if the employer pension is paid gross, as most are, the tax relief to which you are entitled doesnt do you any good.

It is most often the case that employer schemes are "net pay" rather than Relief at Source, but should the employer's scheme be NOW see

http://www.nowpensions.com/press-release/now-pensions-to-top-up-non-taxpayers-pension-pot-to-offset-net-pay-income-tax-relief-shortfall/

And NEST uses RAS.

https://www.nestpensions.org.uk/schemeweb/NestWeb/public/helpcentre/contents/how-should-i-calculate-tax-relief-with-my-earnings-basis.html

kayester

I chose 2% when I tried and it says they pay £1.79 lol ...
I havnt got emergency fund I live day to day but I'm trying to think of the future.
I have read terms and it doesn't say if they pay more and there is no1 to ask it is a big company and a call centre

kayester

And when I chose 2% ithe doesn't go on normal salary is this normal?? I genuinely know nothing about a pension

xylophone

Which Pension Scheme is being used?

NEST? NOW? Something else? Have you been given a booklet, an internet link..?

kayester

I have no idea at all.
I genuinely just want to know how much I should be paying