Auto-Enrollment Work Pension or Saving for House or pay off smallish credit cards?

[LornaGoon]

DP has got the paperwork from his employer offering the auto-enrolment pension scheme and is not sure if to take it up or not.

Basically we've not earned much (though worked really bloody hard ) but have been almost living within our means, with a little credit card debt. I have a miniscule pension with a previous council job but all my savings have gone on getting DP out of debt (left from previous relationship), buying a car to get to work etc. I have done everything to save us money (energy tariffs, reduced rent, food bills etc).

So how do we proceed?

1. DP doesn't enter into work pension and we pay off our collective credit card bills (him approx. £3500; me only about £800), through scrimping and 0% balance transfers.

2. DP doesn't do work pension and he sets aside some money each month in eg an ISA or mortgage saving scheme. (NB we're currently council tenants (very lucky) and might get chance to buy in a few years.)

3. DP starts work pension and we don't really think about mortgage saving until I go back to work after extended maternity leave. I'll be looking for a new job but feel very dubious about my earning potential given economy, the area we live in and childcare etc.

Any input would be great; I just keep going round in circles at the moment. I'm just very concerned we've got nothing for the future!

Clear debts
fill ISAs
THEN go for those bloody pensions

they have to reinvite you every three years so he can always join later if your circumstances change (and the pension offer improves)

If it were me I would definately pay off debts then start thinking about saving for a house. Pensions you can always add to later in life to bump them up. Above all get some proper financial advice from a financial adviser.

Same as Talkinpeace:

1. clear debts
2. save up for a deposit using your two ISA allowances
3. think about pensions later.

If you decide not to buy, then your saved up ISAs become the start of your long term pension saving.

Pensions don't have to be in a "pension fund" - often the charges are lower outside and you can't be affected by the government moving the pension goalposts , which it does every few years :(

The thing to remember is that a pension scheme is just one form of providing for your old age

• another is to plan to work part time
• another is to have other forms of savings / investments

pension schemes were only really invented 100 years ago.
DB schemes have bitten the dust
DC schemes will start to follow when people realise how little they get back out of them
(at current rates you have to be retired for 38 years just to get back the money you paid in)

Thanks for the replies. Think we'll be definitely concentrating on clearing debts first and foremost. We'll think about ISAs after that, then pensions! Thanks for helping get my thoughts in order.

The employer has to contribute 3% of your partners salary anyway. You are just choosing to opt out of your contribution. So money will be going in regardless.
But do not leave the pension to long. It might be the only thing you have at retirement.

Biggit
If he opts out, the employer will not be paying in to a scheme as there is no scheme.