Here’s a little known fact for you – I have a first class Economics degree and when I graduated I trained as an actuary. Yeah I know, I didn’t know what an actuary was either until I got the job, (it’s a lot of maths around pensions and insurance and risk), although I remember at the time reading somewhere that it was a job for ‘people who found accountancy too exciting’.
As you might well guess, it wasn’t really my dream job. What it does mean though is that I’m meant to know a bit about pensions.
What is it exactly about pensions that so many people find scary? Why do we bury our heads in the sand when it comes to long term finance? This attitude is particularly frustrating in the case of pensions as by the time you feel grown up enough to think about it, it’s TOO LATE. Okay, so it’s never too late exactly, but the younger you can start investing in a pension the better – money saved in your twenties is worth SO much more than in your forties. The state pension is currently only worth about £8,000 a year, so if you’re relying on this when you retire then you’re screwed. Sort out your pension NOW, however old you are.
Fortunately I did kind of twig this early on, (it would be a bit embarrassing if I hadn’t with the whole ‘working in pensions’ background), and I started paying into my first work pension scheme when I was 21. When I left that job to have Belle at 24 I took it upon myself to set up a stakeholder pension. I only paid in £60 a month initially, because I was on maternity leave and poor, but it has always been there, pottering along. Last year, when all the documents for my pensions could no longer fit into a lever arch file, I decided it was time to take action. I went through everything and it turned out, due to my flighty nature, that I had a total of seven pension pots from various jobs over the years.
Seven pensions is just a bit greedy isn’t it?
I went to an independent advisor, and they helped me streamline everything and transfer all seven into one pension pot. Just to reinforce the point about the earlier the better, that first pension that I paid into between the ages of 21 and 24? That’s now worth over £40,000. (Yeah, I know, I was surprised too.)
Is this making you think ‘Damn, I really should track down all my pensions and DO something with them?’
By the end of this post you are going to be digging that pretty little head of yours out of the sand and feeling excited about dealing with your pension situation. Well maybe not excited, unless you are a pension geek like me, but reassuringly positive at least. View Post