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im only 23 so don't know why im worrying so much about this but i dont want to end up one of those old people who can't afford to do anything.

first question - are you entitled to state pension on top of a private pension or are you only entitled to one of the other? even if you have a private pension, surely if you've made all of your national insurance contributions, you should get it on top?

second question - when dealing with private/company pensions, what age should you start saving?

the reason i ask is because i started a new job today and i have been informed that automatically, i have been put into the pension scheme so a deduction will be made each month. i can opt of this very easily but i dont know if i should.

i dont plan on staying at this firm forever. its just something that pays better until i find something that i actually want to do but im thinking that i should start a pension somewhere. my boyfriend pays about £250 a month into his pension thing (and has done for about 2 years) and he's only 2 years older than me. this scares me! i haven't even thought about it!

thing is, i can see myself changing jobs alot in life as i get bored easily so i can't really get a company pension as i can't see myself being at one firm my entire life. is there some sort of private pension thing i can do that has the benefits that a company one does (ie, if you put 'x' amount in, they put in double).

i realise that the earlier you start saving, the bigger your pension will be but would someone be ok starting to save at say 24/25? i can't really afford to have deductions made out of my age at the minute. i'd prefer the money to go towards clearing off my debts.

also, i dont get pensions,how do they work? i probably sound really thick here but how can they work them out when you don't know how long you are going to live? if you save say £300 a month (this is including both the persons and company's contribution) over 40 years...thats only £144k. its not much really if you live for another 30 years (and alot of people live into their late 90's now)! do you get given it in a lump sum or is it divided by 'x' amount of years? can it run out?

haha, proper thick. sorry, im just completely clueless.

just wanna know whether i should start one up somewhere =/
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    I can answer a few questions..

    Yes, you get both. The reason people have personal pensions is that the state pension is barely enough to live on, and in fact might not even be around in 40-50 years when you come to retire.

    I joined my first pension scheme with my employer aged 20. I think we put in 3% and they put in 7% each month. When I moved to my current employer, I joined their scheme - here we put in 4% and they put in 6.3%. I'm now 25.

    Both were what is known as a Group Personal Pension which means you have your own personal pot of money which when you leave a job you can take with you and transfer into your new scheme - you can keep them seperate but most people where I am seem to combine the two (I deal with the paperwork) for ease.

    Very doubtful that you'd find a private personal pension where anyone else would make a contribution. Sometimes employers pay into their employees private pensions if they haven't got their own scheme set up (very small companies) or in the case of senior managers as an extra perk / benefit (happened where I used to work).

    If you start now, you won't miss the money out of your wages cos you never had it in the first place. If you wait, you'll always find something "better" (as in more immediate) to spend the money on and you'll never get round to it. Same as you probably think you ought to start a savings account but you always have something else to spend the money on, yes? (I know I do!). Also, if you join now, you're also getting free money from your employer too!
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    thanks for answering those :)

    ha, i will notice the money because i know what i should be getting without it being taken out. nevermind though. i suppose its something i can't really avoid. ive got to get a pension one day. is it taken out before tax?

    yeah, it is actually free money. i have to put in 4% and my employer puts in 6% i think. i think thats what they said yesterday. i can't really remember right now :blush:

    can anyone answer my last questions about how pensions actually work? it all confuses me.

    eta: if i have lots of employers throughout my lifetime then, can i transfer ALL money that has been saved (from both the company and me) into my new pension? i'd prefer to have one than lots of little ones! i will probably only be in this job a year maximum as me and my boyfriend are planning on moving out of the area. is it even worth setting this one up????
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    I first got a pension with my first proper job as it were and i've had one at each job ever since i now have 4 or 5, the smallest only has around £250 in it. All of the pension advisors i've ever seen seem to be of the opinion that its better to keep them all in separate funds whilst your young to spread the risk incase one of them goes bust and looses all your money or doesn't perform s well as another. Then as you get closer to retirement time you can consolodate them putting them all togeather into larger funds and changing the profile of your portfolio.

    You should definately start paying in as soon as you can - after a few months you will get used to having slightly less a month and you will get 6% more money from your employer which goes into your pension fund and which you wouldn't have. Is definately worth doing this especially as a women as statistically you earn less over your lifetime than a man and you also will statistically live longer this means that when you come to retire you will get less each month than a man who has the same ammount in his pension fund as you as he is more likely to die sooner - its great.......
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    i dont currently pay into a pension, stupid some people would say but hey ho.

    certainly i think its a better idea to pay any outstanding debts you have before you start plowing money into a pension...but thats just personal opinion.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    I would say it is unless your getting a pension contribution from your company which is conditional on you paying in a set ammount as well - otherwise your effectively electing to take a pay cut in the long term for short term gain which is just silly if you as ask me.
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    Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    I'm paying into a mini cash ISA.
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