Pensions advice

[LittleWhiteMice]

im 26 (not that young). People keep talking about how amazing pulic sector pensions are, so how much are they a month?

Do you get an nhs pensions and a state pension? How much a month is reasonable to live on in old age?

Does your pension pot run out? does it stop paying at 80 if the moneys gone and you have nothing at all till you die?

How much are private pensions? do compnaies pay in too?

Are you all saving for pensions? If so should I start? how much do you save? where do you put it? is it a pension account or a savings? is it taxed?

would money from hb rent be deducted based on pensions payments?

Thanks all

(This should really be taught in schools)

How much are they a month? Depends on how much the employee has contributed and what their average salary has been
NHS & state ... anyone can have an occupational pension or a private pension and claim a state pension at the same time.
Does it run out ... it is for life.
Private pensions.... you can contribute as much or as little as you can afford. Some companies will pay contributions into a private pension. Some have their own scheme. Some don't contribute.
HB.... don't think housing benefit affects pensions

I have my own pension to which the company I work for contributes an agreed % of my salary. Pension is with a big insurance company and all contributions earn tax-relief. I also have various savings (ISAs) and investments rather than putting all the retirement eggs in one basket. If in doubt, talk to an independent financial adviser.

thankyou, but how do i know how much to contribute

i work as a part time temporary worker. ive been here 3 years with 3 small gaps of a month one every year. I assume this is so i dont become a proper worker after 1 year with right etc..

some times i eanr 70 a month, sometimes 700.

what would be best based on that?

It's a question of how much you can afford to invest and how much you'd like to get back. Private pension funds are invested in the stock market & their value fluctuates. Many are what they call 'money purchase' which means that , when you retire, you use the fund to buy an annuity and this gives you a regular income. A £10,000 fund will buy you an annuity which will give you £500 - £600 p.a. income at today's rates.

An occupational pension is slightly different. You may be required to contribute a set percentage of your salary and may or may not have the option to make additional contributions. Your employer may also contribute or they may not. In a money purchase scheme the fund is then used as above. In a final salary scheme (almost non-existent these days) the payout is linked to final salary. In the case of public sector workers, the value of pension is worked out with a combination of their years of service, contributions and final or average salary.

If your income is erratic then try to smooth out your contributions based on a good average. If your total income, for example is 11 months @£700 and 1 month @ £70 then your average monthly income is £647. If you put between 5% of that in a pension each month (£33) it would be topped up with tax-relief to £41. For every £80 you put in, you get another £20 in tax relief, even if your income isn't high enough to pay tax on.

Another way to save money for retirement would be to put money into a tax-free investment like Cash ISA. This makes it more easily accessible and you don't have to wait until you are retirement age to see the money again. The interest is fixed, not taxed, but you don't get any tax relief top-ups on your contributions.

There are many many ways to save for a pension and not all are invested in the stock market. I have a SElf invested personal pension which I invest and run myself within that I have selected commercial property and then I also have a WRAP which is a mixture of stocks and bonds. My point is no baffle you, but to illustrate that there is no one simple solution for everyone. Really the best person to advise you is an independent financial advisor who will look at your personal circumstances.
Finally as you no longer have to buy an annuity it would be possible for your pension to run out.