Pensions; what is your take?

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Last week I touched on writing wills and this week it only seems right to focus on pensions. I am on a roll here, humour me!

Here in the UK, state pensions are provided to people from the age of 66 – source came from http://www.gov.uk website. The amount, brace yourself is a paltry £119.30 per week. Those living in the UK are well aware of the rising cost of household utility bills such as electricity, gas and water rates. Let us not forget the cost of food and everyday essentials. Not everyone who reaches retirement age would have paid off their mortgage or indeed have had one to start with. How will they continue to fund their lifestyle when there is no longer a regular salary? Outgoings do not suddenly disappear because we no longer have the means to fund them.

Struggling financially as a more mature person is not desirable in the least.  You are less agile, more prone to illness and therefore need to keep warm, eat well and enjoy life. Also after decades of working, surely one would want to “live a little” and pick up hobbies and a lifestyle you could not commit to when you were working. A state pension alone does not allow for comfortable living. 

This is where company pensions come into play. Most organisations will contribute a percentage towards an employee personal pension. This is a great incentive for employees to join pension schemes.  I took out a pension (reluctantly) at the age of 25. I did miss the reduction at first but saw the benefits which I knew I would receive much later in life. At the age of 25 holidays were definitely my priority and I would have happily poured my salary into travelling if given half the chance!

For those who are self employed or whose company does not offer a pension scheme, consider saving or investing a percentage of your income each month. Carry out thorough research before making a commitment to identify which investment scheme works best for you.  It would be ideal if your money cannot be easily accessed – no dipping in and out for holidays and other purchases!

Do you have a pension/investment plan in place? If yes, what influenced your decision; starting a family, advice from a friend or family member?
If no, have you given it some thought?

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24 thoughts on “Pensions; what is your take?”

  1. This is a good work, when the economy is good, but can really hurt during when it tanks. So sometimes, even planning is not enough for long term its may affect our routine.

    Thanks for sharing this with us.

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    1. You are welcome Dhaval. You are correct that even with planning, our finances can take a turn depending on the economy. However, I would rather take this risk and save anyway.

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  2. Investing and working out your future by planning on pensions and retirement is very necessary.
    My dad recently retired at the age of 58 from his job yet he is still working on investments as he has the interest in it and managing his expenses by his pension.

    So I would like to have such planning to, mine would be different me being self-employed, though.

    Thanks for sharing dear, will definitely share it ahead.

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      1. Yeah he is, he’s now going ahead with his interests like gardening and investments and a relaxed life ☺

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  3. I will have a government pension too. I am now spending some of my savings on a program where they match my funds to go into buying stocks.
    This is a good program, when the economy is good, but can really hurt during when it tanks. So sometimes, even planning is not enough.
    Thanks for sharing this with us.

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  4. As noted above, no U.S. companies have what are called Defined Benefit plans anymore. tTat is, the employer contributes to an employee’s pension. Now, we have what are called 401K plans (named after the section in the law) that requires employees to contribute to their retirement fund (and usually the employer does some kind of match). Unfortunately not everyone joins a plan or they contribute and then need to withdraw the money before retirement for their children’s education or some health emergency. We do have a more generous government pension — Social Security — than the UK, but it is not enough to live on in retirement without some other source of income.

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  5. Ah, touchy subject, but I’ll share in the hope it will help others who may find themselves facing divorce. My ex-husband’s company matched contributions to retirement accounts – very generous and not something many companies do anymore. But my “ex” talked me into focusing all our efforts toward building up his retirement account because of the potential gain – assuming of course that we would be together forever. Of course, that didn’t happen and when I nudged my husband out the door my retirement funds went right along with him.

    Worse yet, I worked 3 jobs to cover the mortgage payment on “our” home until I could sell it. Imagine my shock when I discovered the woman he’d fathered a child with before I discovered the affair had filed suit for child support and that had to come out of the proceeds because his name was also on the deed. I ended up walking away with a whopping $300, and the conviction that I will never again allow anyone else to control my financial future. Painful lesson to be sure.

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  6. I live on a couple of pensions. Totally worth paying into and I was lucky to have had an employer who paid a big chunk! I went for tit because, “simply, it makes good sense.

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  7. I will have a pension payout from the time I spent in the classroom, but now that I am self-employed, I need to start getting my ducks in a row in a more orderly fashion. Thankfully, my retirement expenses will be on the more affordable side compared to some.

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  8. Hi Phoenicia. I worked for the government for 18 years, so our pension contributions were compulsory. I left the job long ago, and although the pension funds are locked in, I am able to withdraw a small amount annually to augment my freelance income. I am most grateful for that. And gratefully, our government pensions (available to all citizens) in Canada, are more generous than yours in the UK.

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  9. This is very different in the USA. It is the rare company these days that has a “pension” plan. These have been replaced with 401(k) savings plans that many employers will offer, but not all of them will match the money and employee puts into the plan. There will most likely be other USA readers who can write more eloquently about this.

    I am lucky to have been raised by parents who stressed frugal living and maintaining savings. I have had investments on my own for decades. Thank goodness!

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  10. Phoenicia, you are absolutely right that state pensions just don’t cut it. You need a company pension and if that is not available, your advise to save/invest a portion of your income is right on. And, believe you me, retirement age comes faster than you think.

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  11. Pensions is an area where people have been ripped off both by private companies and even by the state. The latter is mainly because neoliberal principles have been applied and private companies take pensioners to the cleaners. Remember thinking that it was a disgrace how the system worked in the UK when I lived there. How many companies in Britain have just stolen the money people have contributed to a private pension plan? It’s high time some legal protection is applied that prevents people from being ripped off by their employers.

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  12. Hello Phoenica,
    You are right! We should start investing wisely in order to live a less-troubled life in the later stages of life. Keeping in mind the rising cost of living, it makes sense to start saving wisely

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