17.Nov.2017 About Us | Contact Us | Terms & Conditions
Search Articles

Home











The boring subject of pension

 

By Shola Adenekan

 

Helen Naylor, 25, works for a London-based political campaign group as a research assistant.

 

With conflicting priorities of around £6,000 of student debt, a desire to buy a flat and a wish to enjoy life, she says that having a pension is not something she neither has the cash for nor spends much time thinking about.

 

Although, she knows she’ll have to start saving for her retirement at some point.

 

Fewer young people – particularly young Blacks – today are in pension schemes. Recent government figures in Britain show that less than half of those under 30 are currently saving for a pension, yet 62% of those born in the 1950s and 73% of those born in the 1960s started a pension before they were 30.

 

As today’s young Black men and women are likely to live longer than our forebears, pension experts advise that we should start to save earlier if we are to retire at a reasonable age with adequate pension  and in order for us to realise that dream of spending our twilight years basking in the warm weather of the Caribbean or Africa.

 

According to the Trade Union Congress (TUC) – Britain’s umbrella workers’ organisation - someone who starts to save £100 or US $200 a month at the age of 20 can look forward to a total pension of just over £142 per week if they retire at 65, but if they wait until they are 35, then it falls to £71. These figures exclude state pension.

 

Experts say that we now have a pension time-bomb in the Black communities and that unless young Blacks take out pensions, a generation faces poverty in old age and will be dependent on the generosity of whatever government is in power.

 

Experts warn that a group of professionals like this should be talking to one another about their retirement plans in order to avoid a pension time bomb in the Black community

 

Pension professionals say young people are failing to plan for their retirement for a number of reasons:

 

The most important has been the retreat of employers from contributing to a decent occupational pension. Studies suggest that when employers make no contribution to work-based pensions, just over a tenth of staff save but when employers make a contribution of more than 5%, 7 in ten of employees join a scheme.

 

But many young people also face great pressure on their finances. More and more of them are leaving university with big debts, property prices are going through the roof and many young blacks are in low-paid jobs.

 

Pension scandals and mis-selling have also made many young people suspicious of companies and many find the subject of pension boring and complex!

 

However, whether you are a young graduate professional or a mechanic, the sooner you start saving towards your retirement the better. The good thing about pension is that you also get a tax relief on your savings. The longer you have it, the more profitable it becomes.

 

So, ask your employers or a financial expert for advice about pension if you have not already done so as this may affect the kind of lifestyle you will lead at old age.

 

Here is what you should know about pension

 

Stakeholder Pension Scheme:

Experts say this is the most suitable option for young people because of its low cost-saving plan and flexibility. It will allow you to save when you are able to and your employers can contribute as well. If you change job, you can also ask your new employer to make contributions towards your Stakeholder pension plan.

 

You can buy this plan from your bank, insurance and financial service companies.

 

Occupational Pension Scheme:

This is gained as a result of salaried employment and is governed by a regulatory body. You benefit from tax incentives and your contributions are calculated as a percentage of a member’s basic salary with the minimum contribution being 15%.

 

If your employer offers this plan, you should join as soon as possible. If not ask, if they could start one.

 

The most important thing about pensions is to seek financial advice on what is suitable for you.

 

Shola Adenekan publishes The New Black Magazine. He also writes about education and careers for the Guardian, the BBC and the Christian Science Monitor.

 

Please e-mail comments about this piece to comments@thenewblackmagazine.com

 

 

 

 

  Send to a friend  |   View/Hide Comments (0)   |     Print

2017 All Rights Reserved: The New Black Magazine | Terms & Conditions
Back to Home Page nb: People and Politics Books & Literature nb: Arts & Media nb: Business & Careers Education