Company Pension

[Gem123]

Everyone keeps telling me i should start a pension im 20 years old and have been with my company for nearly two years. Their company pension contribution is 6% and mine would be 4%.

The company is in the process of being sold and im not completely happy here and looking to change jobs in the near future is it worth me signing up?

P.s: im pretty clueless when it comes to pensions so please no jargon!

[WoWo]

Personally I think the best thing to do is set up a private pension and pay in as much as you can. Many employers will pay into a private pension for you but it will be at a much reduced rate compared with their contribution if it were a company scheme. The downside to a company pension as you have pointed out is that it's difficult to transfer if you leave and more than likely you would only be able to transfer a small percentage of the money you put into it. But I'd get some advice from a pensions advisor.

[Oneeyedvic]

Personally, at 20 years old, I wouldn't bother yet. If you are thinking of leaving there is no / little point in joining your compnay scheme. Get settled in a job you like then look at what that company's scheme is. Unless you are a 40% tax earner, i wouldn't bother. Instead, put the money into a savings account, and start saving up towards a house deposit.

 

But as with all this, this is my personal opinion and would suggest you go to an IFA

[Gem123]

thanks guys.

How do i know if im a 40% tax payer?

[Miss Zippy]

If you're earning over �36k you're likely to be a 40% tax payer (I say 'likely' because adjustments made an individual's tax allowance can mean some people earn a little more or less than �36k but are within the 40% bracket). I agree with Oneeyedvic that you should wait until you're settled in a job before worrying about pensions and put your spare money towards more immediate needs, like saving for a property perhaps.

[Gem123]

im not earning anywhere near that!

 

think ill take your advice and get a good savings account going for me and me boyf to put towards a house!

[mash]

I wouldn't bother because your 20...........sorry wrong way round and total rubbish. You should start saving precisely because you are 20! Saving for retirement is ALL about starting as soon as you can. Second is then to find the best place to save. Making up lost time when you are older is VERY costly. My advice is to either take out a company scheme; if its a good one (good contributions and solid, large company). Alternatively invest in a growth ISA and don't ever feel tempted to touch it. ISA's have greater appeal now pensions are loosing their status and have several key advantages as well.

Go for it get saving, anything is better than nothing and believe me you will be glad you did later on! 

[Oneeyedvic]

Mash - carry on reading the tabloids and keep your opinions to yourself. If you think a 20 year old should save for a pension instead of save for a deposit on a house you have obviously got no clue!

AS I stated, if you are a 40% earner and have surplus income, it is of course a good idea, but if you are not and are looking at changing jobs as stated in the question, why would anyone advise you to join a company scheme?

[mash]

Should I really keep opinions to myself on a question site like this? Would that make sense? Is it not allowable for Gem to have all opinions and make his/her mind up? Huumm, not got a clue eh.....tell me then over the last 40 years what has done better, UK property or the UK stock exchange? Think you will find the stock market has out performed all other 'usual' investments. Then add to this a sky high property market. I will stick to investment in the markets just now, but thats just me, we all make our own choices!