When Should I Start a Pension?

Happy Monday! I love a Monday morning, the possibilities for the week are unparalled and anything could happen! But mostly the week usually zooms away and before I know it we’re back to Friday. Life passes quickly when you think about it. We’re almost a Christmas again!

It’s for this reason it’s all too easy to forget about the future. One conversation I heard recently was regarding pensions and that many people don’t have a pension in place when they hit 30. In the UK there are 1.2 million pensioners with no pension (other than the state pension). Currently, 12 million adults in the UK have no pension in place for their old age!

Who Needs A Pension?

So, with almost 20% of the UK adult population in a financial pickle, what does that mean for their future? The UK has an aging population so people are having to work longer. The retirement age was once 65 but this has been removed. Many adults are now working into their 70’s. When they eventually do retire they will receive the basic state pension of £110.15 per week. That’s £5,727.80 per year ($9,000).

It’s Not Too Late

While speaking to a friend in his 30’s he explained he didn’t have a pension. I asked, so what will you do when you retire? He answer startled me, “I’ll have won the lottery or something by then”.

Ah, good plan.

Back up plan? There must be a back up idea should ‘guarantee’ of the lottery fall through. Nope. Nothing. OK. We went through the process of what he could save if he just put £50 per week away from his salary each month. The new Government legislation also means the employer has to contribute too. The pension pot could be sizeable and at least provide some financial support for the lean retirement years.

Reasons People Don’t Have a Pension?

I started to look into the reasons why people don’t have a pension. There’s a number of reasons I found, such as

I’m too young, I won’t be retiring for years yet!

I may die before I retire, I should just enjoy the money now

The Government will pay for me

I don’t have the money to pay a pension

I can’t imagine living my retirement on £5,000. It’s surely impossible. I’d have to sell my house, downsize and rent. No holiday’s, no luxuries, no life.

Quick quiz:

When did you start your pension? Also, if you don’t have a pension have you read this and changed your mind?

 

Resources:

There’s a great state pension calculator here: https://www.moneyadviceservice.org.uk/en/tools/pension-calculator

Pension statistics from the Government https://www.gov.uk/state-pension/overview and poverty.com

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John The Bankruptcy Guy

As an ex-bankrupt, John has experienced the highs and lows of credit. It's with this knowledge that he writes Debt Advice Resource - to help others avoid, or navigate out of, the pitfalls of debt.

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