First job…what’s recommended

Triumph13

hugheskevi has pretty well nailed it.  So much depends on their situation and personality.  And on yours - eg are you charging room and board, or requiring them to save an equivalent amount to room and board, at one end of the scale, to are you already planning to hand them a healthy house deposit at the other end?  If they are on a career path that will see a rapidly rising income, then any savings now might be immaterial.  If they expect only small increases then the sooner they start saving the better.  Do they need to build a big emergency fund, or is the bank of Mum & Dad doing that job?

squirrelpie

"Working through this financial tool would be a useful exercise" looks like it could be useful, but it looks rather amateurish because the text overflows beyond the boxes etc. Maybe it makes too many assumptions about font sizes or something?

I do agree with everything else said.

hugheskevi

squirrelpie said:

"Working through this financial tool would be a useful exercise" looks like it could be useful, but it looks rather amateurish because the text overflows beyond the boxes etc. Maybe it makes too many assumptions about font sizes or something?

It displays fine on my devices, so probably not optimised for your particular display.

Marcon

allystar said:

Hi there, my daughter will start her first job in a month, with a salary of around £25k.

She will turn 18 around the same time…while Zi’m aware she’d need to opt in to the Company scheme (which matches up to 10%) I’m not sure d what the right advice is at that age.

Hubby says get her to put 5% in, employer matches…

My thought would be this and get her to take an ISA.

Any advice??

She doesn't have to opt in; the whole point about auto enrolment is that employees are enrolled automatically with no need for any action on their part. If she wants to contribute more than the minimum required as a condition of membership, then she needs to 'do something'. Edit - currently auto-enrolment starts from age 22 so she would have to opt in. Apologies!

Grumpy_chap said:

Her future self will be grateful if she pays the maximum she can into the pension - at least sufficient to secure the maximum employer contribution.
She might be constrained by NNW rules.

Only if she's making her contributions by salary sacrifice, otherwise there are no NMW considerations. She does in any case have considerable headroom to use salary sacrifice, if her employer offers it, given that she's earning well above NMW.

BlackKnightMonty said:

Let’s be realistic. £25k is the NMW. If your daughter can save and contribute to a pension from that then she is doing brilliantly well. But with the COL she may find it hard to do so; and projecting unrealistic expectations that she should save a third of her salary need moderating.

Not for an 18 year old - NMW is £10 an hour, so working full time salary would be around £18,200.

Paying a bit extra to her pension to get the employer match is worthwhile, but other than that she should be enjoying her teenage years and spending her salary. 

Dazed_and_C0nfused said:

JoeCrystal said:

Dazed_and_C0nfused said:

Robin9 said:

How much is she to give you for her Bed and Board ?

As above the earlier she saved for pension/property purchase the better but she needs to enjoy life / holiday etc

The op is referring to his own daughter, not a lodger!

It is a fair question! Contributing to the cost. I think you mean her rather than his. 🙂

Oops, yes, her daughter.

Just don't really get the whole your own children paying bed & board, rent, keep whatever people choose to call it.

Not such a hard concept to grasp. Teaching children the value of money is never a bad idea, and that includes recognition of the fact that she's a cost centre for her parents!  It's fine for indulgent parents to subsidise their offspring if they can afford to do so (not all can), but there's going to be one heck of a financial shock when a little darling moves out and comes face to face with the realities of paying their own way (and discovering that washing doesn't do itself, meals don't appear out of thin air and so on).  Maybe giving parents something for board and lodging, if only so they can squirrel it away in a savings account to hand over later when said little darling wants to move out and needs a deposit to rent their first home...

itsthelittlethings

I think she may have to opt in as I thought you weren’t auto enrolled until you’re 21, or am I wrong about that?

seacaitch

Can choose to opt-in when aged 16-21, auto-enrollment from 22.

Dazed_and_C0nfused

Marcon said:

allystar said:

Hi there, my daughter will start her first job in a month, with a salary of around £25k.

She will turn 18 around the same time…while Zi’m aware she’d need to opt in to the Company scheme (which matches up to 10%) I’m not sure d what the right advice is at that age.

Hubby says get her to put 5% in, employer matches…

My thought would be this and get her to take an ISA.

Any advice??

She doesn't have to opt in; the whole point about auto enrolment is that employees are enrolled automatically with no need for any action on their part. If she wants to contribute more than the minimum required as a condition of membership, then she needs to 'do something'.

Grumpy_chap said:

Her future self will be grateful if she pays the maximum she can into the pension - at least sufficient to secure the maximum employer contribution.
She might be constrained by NNW rules.

Only if she's making her contributions by salary sacrifice, otherwise there are no NMW considerations. She does in any case have considerable headroom to use salary sacrifice, if her employer offers it, given that she's earning well above NMW.

BlackKnightMonty said:

Let’s be realistic. £25k is the NMW. If your daughter can save and contribute to a pension from that then she is doing brilliantly well. But with the COL she may find it hard to do so; and projecting unrealistic expectations that she should save a third of her salary need moderating.

Not for an 18 year old - NMW is £10 an hour, so working full time salary would be around £18,200.

Paying a bit extra to her pension to get the employer match is worthwhile, but other than that she should be enjoying her teenage years and spending her salary. 

Dazed_and_C0nfused said:

JoeCrystal said:

Dazed_and_C0nfused said:

Robin9 said:

How much is she to give you for her Bed and Board ?

As above the earlier she saved for pension/property purchase the better but she needs to enjoy life / holiday etc

The op is referring to his own daughter, not a lodger!

It is a fair question! Contributing to the cost. I think you mean her rather than his. 🙂

Oops, yes, her daughter.

Just don't really get the whole your own children paying bed & board, rent, keep whatever people choose to call it.

Not such a hard concept to grasp. Teaching children the value of money is never a bad idea, and that includes recognition of the fact that she's a cost centre for her parents!  It's fine for indulgent parents to subsidise their offspring if they can afford to do so (not all can), but there's going to be one heck of a financial shock when a little darling moves out and comes face to face with the realities of paying their own way (and discovering that washing doesn't do itself, meals don't appear out of thin air and so on).  Maybe giving parents something for board and lodging, if only so they can squirrel it away in a savings account to hand over later when said little darling wants to move out and needs a deposit to rent their first home...

That might apply in the future but at the moment an 18 year old would have to actively opt in.

Marcon

Apologies - at her age she would indeed have to actively opt in. Thanks to those who spotted my mistake - have corrected my previous post.

R_P_W

She should opt in and pay the % to achieve the highest match from her employer.  It's literally free money!  If after a few months it's a struggle then you can always reduce it down, but if they can condition themselves into paying in the % now it will set them up well for later life.

I 43 now, I started working as an apprentice in 2001 when I was 19 earning about £12k a year, I was living at home with parents.  I paid in 6% and my employer paid in 12%.  I didn't want to, I was 19.  My manager encouraged me to pay in more than the minimum 4%.  This approach has stayed with me throughout my career, I'm now on a salary of £70k+ where it's even more important to take advantage of tax relief.  I currently pay 15% and my employer pays the same  ,I'll be dropping down to 7.5% next month as that still maintains my 15% employer contribution, I'm doing this because even if I don't contribute any more money in 15 years with an average 6% return I'll have a million £ pension pot.

Get in the habit on paying into pension from day 1.

allystar

Thank you all for the input!

we are going to encourage her to opt in and put the full 10%…added bonus is she should be able to do it via salary sacrifice.

Also going to get her to open a S&S Isa…she has a child one just now that she will get the content from when 18.

I’ve no intention of taking any payments for board…she’s a good kid, with a sensible head for money, so I know she won’t fritter it away!

I think, having £400+ a month going in to a pension at such a young age is a great start for her future!