Pension for 20 yr old ??

ipri

My daughter has started a job at M & S...they have offered her a pension scheme.She may only be there a short time as its only for pocket money...is it worth taking up?....I normally would be keen for her to start asap...but in recent years bad publicity worries me..any help ian

sorry if this has been posted twice!

dunstonh

.is it worth taking up?

Yes. Free money from employer.

but in recent years bad publicity worries me

What bad publicity?

ipri

I'm thinking about stories of poor return after long term contributions/schemes folding etc....what about if/when she leaves..can money be transfered to new scheme? ian

Idiophreak

Depends on the scheme really.

If the employer's gonna pay 5% into the pension without any contribution from the employee, it's free money - what do you have to lose from taking it.

If, on the other hand, it's just the employee that pays in, it's probably not worth the effort if it's short term.

And if it's a "you pay 5% and we'll match it" type scheme, it's somewhere between the two - work out how much the employers contrbution will be worth over her time there and see if that's worth losing the income short-term and having to transfer the fund (if you can) when she starts her next pension.

PasturesNew

I always thought it wouldn't be worth it as you'd just end up with a few quid here and there in many schemes over the years. Which you'd forget or would get gobbled up in admin charges.

Is that not the case?

If she's just there a few months.

ipri

Not sure really....when she finishes Uni. may opt for something different...thats why i'm concerned ian

dunstonh

I'm thinking about stories of poor return after long term contributions/schemes folding etc

You are reading the wrong newspapers if you have got that impression. There is a very small minority (vocal minority) who have suffered losses from collapses in occ schemes. About 150,000 to 200,000 people is the estimate. These are a certain type of scheme and since then protection has come in.

Investment returns are variable and whilst some old fashioned investments havent done as well as expected (typically performed in line with savings account rates) that only accounts for some. Like any investment wrapper, the returns are based on the quality of your investments and pensions have virtually the same investment options as any other tax wrapper.

I always thought it wouldn't be worth it as you'd just end up with a few quid here and there in many schemes over the years. Which you'd forget or would get gobbled up in admin charges.

The country is full of people who only intended to be with that employer for a short time but go on for much longer. Also, admin charges are usually a percentage of the value only nowadays so you cant have the charges gobbling up the fund. Depending on the type of scheme, it can be transferred so its not a big problem.

If there is free money from the employer you take it.