Advice for uni leavers

[futureplanner]

As my eldest dc is one year away from starting work I want to help advise them on the best options with money once they start working.

Is it best to encourage setting up a private pension straight away these days? I have always had a workplace pension but I'm not sure unless you are nhs/police/teacher/forces etc if that's such a great option anymore as people don't tend to have lifetime jobs anymore.

I was looking at the LISAs which looks good but obviously there is restrictions around the use of this.

Plus they obviously have uni debts to repay.

No idea on first salary but due to COL I'm wondering how much spare they will have and if it's best just to stick it in a savings account rather than the above?

Assuming they come home after uni we would rather they saved money than gave us any money for board etc.

Workplace pension first - not a private pension. They have to contribute at least 3% of salary on top of your DC's contributions. There's also a saving in tax and (depending how it's set up) probably NI on the amount paid in. With a private pension you save the tax but not the NI.

If it's not a public sector pension then a change of job gives the option of leaving the existing pension to grow quietly in the background and starting a new one with the new employer, or merging the old pension into the new employer's one. So multiple jobs over a career don't diminish the benefits over a separate private pension with no NI saving and no employer contribition.

Workplace pensions would usually be best, as you get employers contribution. A Lifetime ISA might be a good option, to use for a property deposit when they get to that stage. And honestly, they’re an adult, so let them research and make their own decisions.

Workplace pensions definitely. That way you get the employer's contribution AND the tax relief from the government, both of which are paid into it.

Student debt is only payable once their income edges over something like ££27k.

Otherwise, let them work it out for themselves.

Definitely encourage pension contributions to maximise any employer contributions - I told my DS(20) that it's free future money and it's a no brainer. He actually listened, agreed and now pays 8% and his employer pays 15%! For context, he has started his relatively well paid industrial placement year away from home. He has also opened a LISA off his own bat. Proud Mama here - obviously, some of my financial parenting has sunk in.

Otherwise, let them work it out for themselves
I don't agree. Teaching financial awareness is an important life skill like learning to cook, clean, find a job, drive etc. We brought our DC up as financially aware as possible. You don't know what you don't know and it's very easy for young people to start off on the wrong foot.
Student loan repayments don't start until the April after graduation assuming they earn over the threshold.
All good advice about pensions.
If there's not much spare cash at first a monthly saver is a good start. Build up as their salary increases.
My DC set up LISAs, Stocks and shares ISAs for long term, regular savers and a SIPP. The sooner they do all these things the better, it doesn't have to be huge sums, a pension has 40 years to grow.
Get a credit card to build up credit rating, spend only a little on it and always pay it off each month in full.

Pension immediately and change from the default funds which are often rubbish. Also see what the employer match is. They will be giving away free money if they don’t maximise the match. If they start paying into a pension from the first pay check they’ll never miss that money and it has 40 odd years to compound. Those early contributions could well be the ones that worst the hardest. £2k invested at 8% a year for 40 years would be worth £48.5k. £2k for 10 years at the same rate would be £4.5k and £2.5k for 3. Compounding is amazing.

At the point at which I started my graduate job I was at -£2k in my overdraft so paying that back has to be my first priority before it started hitting the interest point. I was very grateful my parents gave me money to get a work wardrobe as I’d run out before then. Starting a new job often incurs costs.

Leaving people to work it out for themelves is exactly why so many people in this country are completely clueless when it comes to pensions and long term investments. Any help that a parent can give in the form of guidance and information can only be a plus surely. Just because they are adult dc does not mean that a parent can't guide and set them on the right path.
I have recently helped my 18 and 22 year olds do exactly this and it was obvious from the conversations we had that they wouldn't have thought of half of it. They are very appreciative and delighted to see a free £1000 land in their LISA within weeks of setting it up and and paying in the years maximum.
The idea that once a child is 18 parents should never help or advise is a very strange one that I only really see on here. If we don't advise and guide the younger generation how does knowledge get passed on?