Do you teach your kids about pensions?

LV_426

I've always contributed to an employer pension fund. Mainly because my parents always encouraged me to do so. But it's only in the last couple of years that I've really started to get a much better insight, and become familiar with the terminology. I feel like I've had my head in the sand for many years, when I should have been better informed.
I really think that's the wrong way around. It's only by sheer luck that I've ended up with a pretty good mix of pension assets, but this was not really down to any kind of planning.

I know it's a subject that is not in the least bit interesting to many young people, but I think that financial planning should be taught in schools. I mean if you play your cards right, it's possible to retire very early. And the earlier you start contributing, the better. I wish now I'd put more into my AVC fund, because although that's one of my oldest, it's now my most valuable. It could have been so much more though.

I know I'm preaching to the converted here, but I do think it's a good idea to get young people engaged with this. No chance with my own kids, because of course they never listen to parental advice! 

Dazed_and_C0nfused

Do you teach your kids about pensions?

Yes.  But they never hand in their homework 🙁

MEM62

I promote pensions to anyone that will listen - young or not so young.  

cloud_dog

LV_426 said:

I know it's a subject that is not in the least bit interesting to many young people, but I think that financial planning should be taught in schools. 

I believe it is in the curriculum, although not extensively.  The challenge is what other lessons do you leave out to ensure you have sufficiently covered the breadth of 'finance', and there is always the challenge of 'you can lead a horse to water...'

Workerdrone

Yes, probably because I also bang on about pensions with the Mrs so much. We set them each up a SIPP about 3 years ago. Iregularly talk about how it has round 50 years to grow and the importance of starting to contribute to their own pension as soon as they start working. They are currently 11 and 13.

Andy_L

Although consider parents teaching their kids anything - the parents can easily be teaching something wrong (eg the bad habits they've picked up in ~20 years of driving)

diystarter7

To "teach" them would be going far as I've never understood pensions but we did say as soon as they started work join the pension scheme.
Thankfully all of are children are massivley more educated than me as I still dont understand pensions though I'm getting income from two of them and the third one will come later just before my retirement age is several years time

Two of our children are relatively high earners 40% tax and in excess of 100k salary and at least one of them has been pumping the max ito pensions since the ago of about 25.

Albermarle

 but we did say as soon as they started work join the pension scheme.

I think this is the main priority- make sure they join their employers pensions scheme and not opt out as it is 'too expensive' or a mate told them pensions were a waste of time.

Also from a young age try and make them into savers rather than borrowers.

The rest can wait until they are a bit older .

dunstonh

I wish now I'd put more into my AVC fund, because although that's one of my oldest, it's now my most valuable. It could have been so much more though.

AVCs are largely a niche option nowadays and most AVCs are obsolete.  Most people do not have access to an AVC.   So, how in-depth do you want to teach children and risk they retain information that is decades obsolete?   Generic information is obviously best rather than specific but in all likelihood, the school already teaches that in gen ed but students don't pay much attention.

 No chance with my own kids, because of course they never listen to parental advice!  

Joking aside, this is part of the issue.   As recent as the early 90s, parents would get the insurance rep in when their child first got a job and get them to pay into a pension or a savings plan     Forget that products of that era were poor quality compared to today.  What it did do is get a savings mentality into the young person.  Back in the 90s we had some of the best retirement provision in the world.    Then the Government decided that pensions didn't need to be sold to people but they would voluntarily buy them.  They introduced the stakeholder pension whcih was instrumental in bringing costs down but it resulted in the closure of nearly every single home service insurer.    And people didn't buy the pension voluntarily or where they did, they only paid in peanuts as they didn't have anyone telling them what they should pay in.    That, coupled with the decline in DB schemes resulted in our enviable position on retirement provision being eroded away to a much poorer level that eventually forced auto-enrollment. 

Nowadays, parents generally push more of the learning and life skills onto schools and third parties rather than themselves.

LV_426

dunstonh said:

I wish now I'd put more into my AVC fund, because although that's one of my oldest, it's now my most valuable. It could have been so much more though.

AVCs are largely a niche option nowadays and most AVCs are obsolete.  Most people do not have access to an AVC.   So, how in-depth do you want to teach children and risk they retain information that is decades obsolete?   Generic information is obviously best rather than specific but in all likelihood, the school already teaches that in gen ed but students don't pay much attention.

Well of course you can only teach the current processes and products available at any given time. But some principles don't change. Even just knowing the terminology helps. I bet you most people aren't aware what's meant by 'DC' and 'DB'.

But as our kids are home ed anyway, I think it's time for me to build some financial advice into the curriculum.

Gubs113

My parents did - well general finance talks rather than pension specific.  While I don't have any kids I have at times discussed the importance of pensions with my nieces and nephews