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Pensions- are they worth it?
Pensions - Are they worth it?
This is a question that is being asked more frequently as time goes on. The UK is allegedly heading toward a pension crisis, so the need to save for the future is more pressing than ever. But, with many people struggling to pay high mortgage and utility costs, finding money for a pension may be simply too much.
Company pensions
I don’t know if any of you saw the programme on “Where’s My Pension Gone?” (ITV1, 25th January 21:00-22:00), but it examined some interesting issues relating to company pensions. At least two thirds of large companies (Sainsbury’s is one example, Thomas Cook another) have now closed their final salary scheme. The money which these companies are paying out is decreasing, and many people are now not bothering with a pension at all.
What if I’m self-employed?
If you’re self-employed you won’t get additional contributions from your employer or qualify for SERPS. You have to be responsible for any extra income. To some this may seem a huge burden as running a business is hard enough in itself. It also raises the question of how to keep up the investment if you fall on hard times.
It’s all up to us
The pension situation seems very depressing when examined closely, but ultimately it’s up to us to secure our future. We can’t rely solely on company schemes or the state pension, so it’s essential that we put aside extra cash. It doesn’t have to be a huge amount to start with, just enough to avoid sleepless nights.
Investing in a pension scheme is worth it - you just need to take time to find the right scheme for to suit you.
Fiona Seymour-Jesse
SJ Copy
Useful Links
BBC Pension Site
http://news.bbc.co.uk/1/hi/in_depth/business/2005/turner_report/default.stm
Help for the self employed - Finance and Grants section
http://www.businesslink.gov.uk/
Articles
The independent pensioner
http://www.fool.co.uk/news/retirement-pensions/2007/01/18/the-independent-pensioner.aspx?source=ioowfeml0040012
Are pensions too risky?
http://www.fool.co.uk/news/retirement-pensions/2006/11/30/are-pensions-too-risky.aspx
The finance pages of Business in Berkshire are for general guidance only and advice should always be sought before acting on any of the suggestions made
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