Growing Daughter's Pension

Alexland

Although 5% compound investment gains sound great it's the return after fees and inflation that counts. This might be as low as 2%. She should check her investments to understand the fees and likely growth (remember we have just had an unusually good period).

If she wants a comfortable retirement my advice is to increase her contributions by trying to get promoted or doing more hours to grow her salary, increasing her percentage contribution and maybe asking her employer to invest any bonuses into the scheme.

Check if the scheme uses salary sacrifice as this will also save national insurance.

It's not easy, it might involve lifestyle sacrifices, but does work.

atush

The money in her pension is invested in funds. That she chose when she started the pension (or the default fund if she count be bothered.

Step 1, have her call the pension firm and ask, or get out her latest statement and see. If she doesnt like the fund, then she can usually change it.

To grow her fund, your daughter should increase her contributions each year when her salary increases.

Do read the monevator site, esp the articles on compounding returns.

GSP

Belated thank you for your replies.
In the outset, she needs a conversation with those who look after her workplace pension.
Personally, my working life was a db pension and things were taken care of automatically, so I cannot pass on any experience there.
What I can drum in though is how important the pension is.
Probably like many starting out something like a pension was too far away in the future, 30-40 years to think about.
But for those with dc pensions, the planning starts immediately.