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New job, new pension - don't delay enrolment

01-October-2018 12:16
in General
by Admin

It might sound like something to put off for another day, but thinking about your pension, as soon as you start work, might just be one of the most important things you do. Why wouldn’t you want to plan potentially the longest holiday of your life – and it’s up to you whether you want to hitch-hike or fly.

To achieve an income of £19,000 per annum, a 25-year-old would need to pay in £190 per month – yet in reality, around two thirds of twenty-year olds aren’t accruing a non-state pension at all (Pensions Policy Institute, 2016/17).  But these figures are changing, and auto enrolment has altered the face of workplace pensions – most UK workers are now automatically enrolled into a pension scheme by their employer.  A contribution is made by the worker – before tax is deducted – and by the employer.

Five quick tips for getting to grips with your workplace pension:

1. When you join a new company, find out about the pension scheme.  Ask for some information and get yourself enrolled as soon as you can.  Be proactive.

2. It might seem like a financial burden but do it – don’t opt out.  Set yourself up to contribute a percentage of your income each month, no matter how small.  Never underestimate the power of compound growth.  The difference made by making a small regular contribution when you are first employed is huge.

3. On average a UK employee changes job every five years.  That’s a new pension each time.  You’ll need to keep track of the individual pots.  A sensible piece of advice is to use a personal email address – often employers will default to your work email.  Change it.  You’ll be glad you did if you move jobs as any contact from the pension provider will still come directly to you.   

4. If you do move around and lose track of your pensions pots the DWP offer a free tracing service.  You can find it here.

5. You will likely be given options about where your monthly contribution is invested.  Don’t be worried – just keep things simple.  Consider your investment long-term, be as broad as you can and bear in mind the costs.  There are numerous websites to help you understand your investment options.  Perhaps start with somewhere like the Money Advice Service which offers a range of free guides, tools and calculators plus phone support.  If you simply don’t want to choose, there will likely be a default fund.

It can be hard to connect with the concept of retirement planning when you’re in your early career but make the most of having an employer that must help you save for your future.  Finding out about your company pension scheme should be a priority.

Skilling Gate is a Bristol-based recruitment agency working with leading financial services firms across the region.


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