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  • FIRST POST
    • Pete Hyk
    • By Pete Hyk 29th Jun 18, 10:47 AM
    • 3Posts
    • 5Thanks
    Pete Hyk
    How to get young people engaged in Pensions
    • #1
    • 29th Jun 18, 10:47 AM
    How to get young people engaged in Pensions 29th Jun 18 at 10:47 AM
    Hi everyone,

    I am looking to get some insights and thoughts from the experts on why young people aren't engaged with pensions. I recently set up auto-enrolment at my last company, and the opt out rate from staff was huge.

    My theory is that its purely about understanding, and that if young people did understand the benefits (employer contributions, tax benefits, compound interest etc), they would be far more likely to engage & contribute. But I'd really be interested in hearing other peoples perceptions both on whats causing it and what would fix it?

    We have an idea that technology & education might be the golden equation to solve this and so put a chatbot online (chat.getpenfold.com) - but am keen not to oversell & want to get the right messages.

    Be great to start a discussion about this

    Pete
Page 3
    • spadoosh
    • By spadoosh 2nd Jul 18, 10:27 AM
    • 5,534 Posts
    • 7,539 Thanks
    spadoosh
    People dont need educating on pensions.
    Its pretty simple. Its (in essence) a savings account for when you get older.

    People dont need educating on compund interest. Again its simple, the interest you earn gets added to your savings thus earning you more interest.

    There you go ive just solved any problems about pensions apparently.


    Most products you can buy need to sell themselves. Pensions dont do that. They have to have incentives, by forcing your employers to give you money and by forcing the taxpayer to offset some of the cost. It proves theyre not sustainable and they need to be offset for people to do it.

    The very fact you have so many people in this forum saying its riddiculous not paying in to a pension, its free money shows the real nature of the problem. Its the magic money tree. Firstly the money comes from somewhere, its usually your wages. So you pay tax which then allows you to get a tax free pension. Your company maintains your pay rate so they can afford to pay the auto enrollment pension.

    Anyone thats got a decent pension now, more than likely, only has a decent pension because theyve been riding the coattails of the FIAT economy.

    You want to know where the money comes from for your free pension.... Its in here.

    http://www.nationaldebtclock.co.uk/


    Like i said its easy to save when you only have to save 1 and get given 100. Its much less of an incentive when they give you 2.

    If pensions wouldve been sustainable (ie self funded) from the start, i doubt most people would have one.

    Out of curiousity, how many people have paid more in to their pension than they are expecting to take out? Anyone? What was that about educating people?
    Last edited by spadoosh; 02-07-2018 at 10:30 AM.
    Don't be angry!
    • RuleTheWorld
    • By RuleTheWorld 5th Jul 18, 4:53 PM
    • 140 Posts
    • 35 Thanks
    RuleTheWorld
    Good topic!

    I am another that can't believe the amount of people you come across who are not fully engaged with their pension plans.

    As a 40% tax payer in Scotland (+1%) with the benefit of a salary sacrifice scheme (Tax+NI) I can benefit from sacrificing 57p now to have 1 in my pension pot.

    It's an absolute no brainer obviously to be balanced (only to an extent) with house plans, life plans etc.

    The amount of people that would rather not take the opportunity really baffles me. FWIW I don't think things are such a no brainer for low income workers to pay extra but everyone should always pay the minimum to harvest the employer contribution. Not doing that is short sighted in the extreme.

    No desire to work for myself (happy to work for wife or kids) longer than I need to and that is what drives my pension motivation.
    • michaels
    • By michaels 5th Jul 18, 6:40 PM
    • 21,279 Posts
    • 98,497 Thanks
    michaels
    People dont need educating on pensions.
    Its pretty simple. Its (in essence) a savings account for when you get older.

    People dont need educating on compund interest. Again its simple, the interest you earn gets added to your savings thus earning you more interest.

    There you go ive just solved any problems about pensions apparently.


    Most products you can buy need to sell themselves. Pensions dont do that. They have to have incentives, by forcing your employers to give you money and by forcing the taxpayer to offset some of the cost. It proves theyre not sustainable and they need to be offset for people to do it.

    The very fact you have so many people in this forum saying its riddiculous not paying in to a pension, its free money shows the real nature of the problem. Its the magic money tree. Firstly the money comes from somewhere, its usually your wages. So you pay tax which then allows you to get a tax free pension. Your company maintains your pay rate so they can afford to pay the auto enrollment pension.

    Anyone thats got a decent pension now, more than likely, only has a decent pension because theyve been riding the coattails of the FIAT economy.

    You want to know where the money comes from for your free pension.... Its in here.

    http://www.nationaldebtclock.co.uk/


    Like i said its easy to save when you only have to save 1 and get given 100. Its much less of an incentive when they give you 2.

    If pensions wouldve been sustainable (ie self funded) from the start, i doubt most people would have one.

    Out of curiousity, how many people have paid more in to their pension than they are expecting to take out? Anyone? What was that about educating people?
    Originally posted by spadoosh
    Except that many would try and balance out their lifetime income even if there is a cost to do so. I would rather live on 20k for 35 years of work and 35 of retirement than 40k for 35 and 10k for the next 35.
    Last edited by michaels; 08-07-2018 at 10:02 AM.
    Cool heads and compromise
    • AnotherJoe
    • By AnotherJoe 8th Jul 18, 8:50 AM
    • 10,611 Posts
    • 12,145 Thanks
    AnotherJoe
    People dont need educating on pensions.
    Its pretty simple. Its (in essence) a savings account for when you get older.

    You'd be surprised how many people don't understand that.

    People dont need educating on compund interest. Again its simple, the interest you earn gets added to your savings thus earning you more interest.
    Oh, people certainly do need educating on compound interest.
    There you go ive just solved any problems about pensions apparently.

    Only by the naive belief that with those two simple statements people will understand.


    Most products you can buy need to sell themselves. Pensions dont do that. They have to have incentives, by forcing your employers to give you money and by forcing the taxpayer to offset some of the cost. It proves theyre not sustainable and they need to be offset for people to do it.

    LOL. You say most products need to sell themselves. And then Say pensions don't do that and then go on to explain how pensions need to sell themselves through incentives !

    The very fact you have so many people in this forum saying its riddiculous not paying in to a pension, its free money shows the real nature of the problem. Its the magic money tree. Firstly the money comes from somewhere, its usually your wages. So you pay tax which then allows you to get a tax free pension. Your company maintains your pay rate so they can afford to pay the auto enrollment pension.

    How is it a magic money tree if it's your money or your employers ? Its the direct opposite if that.

    Anyone thats got a decent pension now, more than likely, only has a decent pension because theyve been riding the coattails of the FIAT economy.

    Or because they've been saving their money and their employers money for years.

    You want to know where the money comes from for your free pension.... Its in here.

    It's not free, you have to make "sacrifices" even if Its at the level of sacrificing 1 to make 100. And you'd perhaps be surprised how many would rather have 1 now than 100 in 30 years time.

    http://www.nationaldebtclock.co.uk/

    Like i said its easy to save when you only have to save 1 and get given 100. Its much less of an incentive when they give you 2.

    If pensions wouldve been sustainable (ie self funded) from the start, i doubt most people would have one.

    Yes, because many people would rather have 1 now than 2 next week let alone in 30 years time.. that's basic psychology even aside the lack of understanding of saving, maths and compound interest. Heck, just say "compound interest" and half the population will acquire a blank look.

    Out of curiousity, how many people have paid more in to their pension than they are expecting to take out? Anyone? What was that about educating people?
    Originally posted by spadoosh
    As with most your statements, that one also makes no sense.
    • Angry_kittens
    • By Angry_kittens 9th Jul 18, 10:32 AM
    • 17 Posts
    • 35 Thanks
    Angry_kittens
    I'm 26, I am actively planning for my early retirement, pay more than minimum contributions, already have 50% equity in my house etc. I would mainly attribute my attitude to my parents, but I consider my colleagues of a similar age as fools for not doing the same. One even asked me why I wanted to retire early "what's the point you'll just be bored". Well, if he needs to be working in his 60's to not be bored...

    Everyone at my company of my age bracket all seem to be "jam today" types, that want the flash cars, holidays, expensive Saturday nights etc. They all consider me boring and don't seem to get the concept of the tax efficient savings into a pension now.

    I gave up trying to convince them, I guess not everyone can be like me or the consumerist economy would fall apart. There is a certain piece of me that thanks them for having that attitude, if everyone aimed to stop working at 55 I imagine that would have severe consequences? Some must be foolish for the enlightened to benefit? I do realize how horrible that sounds though.
    • spadoosh
    • By spadoosh 9th Jul 18, 12:09 PM
    • 5,534 Posts
    • 7,539 Thanks
    spadoosh
    As with most your statements, that one also makes no sense.
    Originally posted by AnotherJoe
    Its pretty simple really. I know a lot of people that have pension pots. From that pension pot they will receive more money than the total of all contributions in to it. It works like this... 1 + 1 = 3.

    My auto enrollment pensions work likes this. 1 + 1 = 2.

    Can you see how there might be less incentive?

    Now which do you think is the sustainable option and which do you think is the unsustainable option?

    Which would you rather be paying in to?

    Which do you think the government, by introducing the 1 + 1 = 2 pension, is in favour of?

    Why would they introduce something that isnt as good?

    Why is it harder to get DB pensions?


    Im not arguing that planning for later life isnt sensible. Im pointing out there is less incentive than there used to be, the reason for this is because the incentive that used to be there was unsustainable. Thats surely not too difficult to comprehend?
    Don't be angry!
    • Prism
    • By Prism 9th Jul 18, 1:20 PM
    • 472 Posts
    • 386 Thanks
    Prism
    Its pretty simple really. I know a lot of people that have pension pots. From that pension pot they will receive more money than the total of all contributions in to it. It works like this... 1 + 1 = 3.

    My auto enrollment pensions work likes this. 1 + 1 = 2.

    Can you see how there might be less incentive?
    Originally posted by spadoosh
    What sort of pension are you contributing to that only gives you back what you put in?

    How about my pension (DC) which is 1 + 0 = 2.5 using your simplified maths
    • LHW99
    • By LHW99 9th Jul 18, 1:27 PM
    • 1,444 Posts
    • 1,321 Thanks
    LHW99
    My auto enrollment pensions work likes this. 1 + 1 = 2
    What are you invested in? The aim of using investments over the timescale of a pension is that as companies across the world invest in making things to make life easier or more enjoyable thay produce a growing income, making them more valuable so that their shares, and hence the funds invested in them increase in value.
    Your arguments are a little like those against companies making a profit "because it only benefits shareholders"IMO.
    Provided taxes are paid at the correct level, making a profit is a benefit to most people, because anyone with a pension can benefit.


    Why is it harder to get DB pensions
    A lot of reasons. Partly from regulation change that insisted on a higher level of "safe" investments, meaning fewer equities, so less capabilities to improve funding after the financial crash. Partly from increased life expectancy compared to when the schemes were founded, putting a higher payout demand on the funds. Companies being forced to take payment holidays when the Government of the day thought the schemes were overfunded. And others.
    • k6chris
    • By k6chris 9th Jul 18, 3:25 PM
    • 259 Posts
    • 458 Thanks
    k6chris
    Your '1' + your company's '1' plus the taxman's '1' plus the long term growth '1' = more than you put in. Of course it's not 1+1+1+1, but you get the idea.
    EatingSoup
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