Saving for the future.
Discussion
I've just got myself settled in at work, a nice place for now that's going to set me up well I hope. The pay is average and I know that I'm going to have to be 'smart' about how I look after my money if I want to afford some luxuries. Let alone move out and live comfortably.
I also think now would be a good time to start thinking about the future with regards to how I'm going to look after myself. A good pension is going to be a must so I can relax in later life among other savings I wish to try and put into place towards a mortgage, new car and whatever else I may need.
Being only 19, I'm at a loss as to where to start with regards to where I should be asking for the advice so why not the almighty PH? I have an ISA set up at my bank, no credit cards and debt to my name. I'm tempted to get myself a credit card to provide myself with a history for when I do make the jump and apply for any big finance options such as a mortgage. I presum the more positive history I can get the better.
I'm thinking along the lines of a pension, my ISA and then another 2 savings account as a rainy day fund and something to put in savings towards expensive luxuries. I'm currently with Lloyds TSB but I'm open to hearing about anywhere giving good rates on long term saving.
Any advice on how to go about things? I guess I'm looking for a general direction on how to go about things - resources on the 'net or whatever.
Cheers.
I also think now would be a good time to start thinking about the future with regards to how I'm going to look after myself. A good pension is going to be a must so I can relax in later life among other savings I wish to try and put into place towards a mortgage, new car and whatever else I may need.
Being only 19, I'm at a loss as to where to start with regards to where I should be asking for the advice so why not the almighty PH? I have an ISA set up at my bank, no credit cards and debt to my name. I'm tempted to get myself a credit card to provide myself with a history for when I do make the jump and apply for any big finance options such as a mortgage. I presum the more positive history I can get the better.
I'm thinking along the lines of a pension, my ISA and then another 2 savings account as a rainy day fund and something to put in savings towards expensive luxuries. I'm currently with Lloyds TSB but I'm open to hearing about anywhere giving good rates on long term saving.
Any advice on how to go about things? I guess I'm looking for a general direction on how to go about things - resources on the 'net or whatever.
Cheers.
Ok, if you're 19 and want to be really clever, start a pension, even if it's just £100 a month. Norwich Union Direct is as good as any but do your own research. I started at 30 so my final annual salary will be a lot less (£10k/year less) and I don't intend dying at 66.
Secondly, put away 10% a month in a savings account.
Blow the rest on hookers and coke. (You might find that due to the lack of anything left, your quality of hookers is so low that they are probably good friends with your gran and your coke is fizzy and sweet rather than powdery and white.)
And don't borrow money. Or lend it. Live within your means (which will probably be much smaller now) but you will be grateful when you have a nice wad of cash to play with in 10 years' time. Or you decide you hate your job and your boss, and have this great business idea that you want to pursue so you can. Or you decide to get married and move to another country and can afford to do so. Or you decide to buy a house on your own. Money doesn't bring happiness but it gives you options which leads to happiness... oh, ok, money brings happiness.
At 19 your most pressing need is to get your job, car, house and activities sorted out and funded without debt (apart from a mortgage).
Pensions are not really a priority at your age. However consider the following:
The state system is unaffordable in its current form and the benefits system has means testing deeply entrenched in it. Retirement age keeps going up. A likely scenario is that you won't get a state pension before you are 70 or even 75. So if you want to retire sooner you'll have to save up a lot.
On the other hand the state pension will possibly be means tested in which case you might find that your carefull savings make you little better off than if you retired with nothing. Just look at the way old folks homes work, if you have assets these must be handed over to pay but if you have no assets the state provides the same deal for free so why save? You need to think realistically about how much you would need to save to provide significantly more than if you saved nothing and relied on the state. There is no point in foregoing a bit extra on holidays, houses, cars, etc for 60 years only to find out that you qualify for nothing due to means testing while someone who spent all their money gets only a fiver less a week.
Pensions are not really a priority at your age. However consider the following:
The state system is unaffordable in its current form and the benefits system has means testing deeply entrenched in it. Retirement age keeps going up. A likely scenario is that you won't get a state pension before you are 70 or even 75. So if you want to retire sooner you'll have to save up a lot.
On the other hand the state pension will possibly be means tested in which case you might find that your carefull savings make you little better off than if you retired with nothing. Just look at the way old folks homes work, if you have assets these must be handed over to pay but if you have no assets the state provides the same deal for free so why save? You need to think realistically about how much you would need to save to provide significantly more than if you saved nothing and relied on the state. There is no point in foregoing a bit extra on holidays, houses, cars, etc for 60 years only to find out that you qualify for nothing due to means testing while someone who spent all their money gets only a fiver less a week.
You make a very good point. It really doesn't pay to work hard in this country unless you earn an incredible amount of money.If the company you work for offers a pension and it's final salary OR they contribute into a defined contribution scheme you'd be mad not to take it.
Also max out what you can every year in ISAs
I started my first pension on my 18th... Sad maybe but always had a pension be it final salary or defined contribution ever since. I'm young 30's and I know so many at my work place similar age or a bit older and others outside of my work again similar age have no pension... I've got 15 years built up which is lovely or to put it another way 15 years ahead of the sample I've taken and I do ask that sort of question every so often. I've convinced quite a number to get into it so I've made a real difference to their futures.
Anyway best bit of all you have the sense at your age and the clear desire to plan for the future.
Sure who knows what will happen in the future tax or state pension wise. So you could either gamble and blow it all up until state pension age OR be prudent take what we know today and go from there. Christ when you do retire you may not even be living in the UK you may decide Oz etc
Also max out what you can every year in ISAs
I started my first pension on my 18th... Sad maybe but always had a pension be it final salary or defined contribution ever since. I'm young 30's and I know so many at my work place similar age or a bit older and others outside of my work again similar age have no pension... I've got 15 years built up which is lovely or to put it another way 15 years ahead of the sample I've taken and I do ask that sort of question every so often. I've convinced quite a number to get into it so I've made a real difference to their futures.
Anyway best bit of all you have the sense at your age and the clear desire to plan for the future.
Sure who knows what will happen in the future tax or state pension wise. So you could either gamble and blow it all up until state pension age OR be prudent take what we know today and go from there. Christ when you do retire you may not even be living in the UK you may decide Oz etc
Good thinking about getting a credit card to provide you with a credit history use it for fuel and pay it off monthly. Credit rating also goes by Direct Debits so set up some of those to keep up with monthly payments.
I wouldn't be too worried about the pension at the moment I started one at 21 if you need a car sort a decent one of those first.
As for savings things may improve in the future but at the moment there is no point IMO interest rates are crap.
I wouldn't be too worried about the pension at the moment I started one at 21 if you need a car sort a decent one of those first.
As for savings things may improve in the future but at the moment there is no point IMO interest rates are crap.
BoRED S2upid said:
Good thinking about getting a credit card to provide you with a credit history use it for fuel and pay it off monthly. Credit rating also goes by Direct Debits so set up some of those to keep up with monthly payments.
I wouldn't be too worried about the pension at the moment I started one at 21 if you need a car sort a decent one of those first.
As for savings things may improve in the future but at the moment there is no point IMO interest rates are crap.
Started ok, then Fail occurred. Go directly to jail, no not pass go.I wouldn't be too worried about the pension at the moment I started one at 21 if you need a car sort a decent one of those first.
As for savings things may improve in the future but at the moment there is no point IMO interest rates are crap.
everyones too bothered about getting a house. you would have lost about £1300 on your house in the past month. ok, long term they may go up but i think the next few years you are knackered.
does your employer have a pension scheme - if not an isa could be considered first and then transferred to a pension at a later date.
this isn't formal advice though
does your employer have a pension scheme - if not an isa could be considered first and then transferred to a pension at a later date.
this isn't formal advice though
If you have maxed out your ISA allowence (say you only decide to do the cash element) then you can go for Premium bonds your gambling with the potential interest.
It may pay out big but its as secure as you can get + any winnings are tax free. Max IIRC is £30k per person.
So you could be saving £10k a year into ISA's and up to £30k max into premium bonds.
Beyond that IF the company you work for offer final salary or career average pension - take it. If they offer defined contribution where they contribute its well worth taking.
It may pay out big but its as secure as you can get + any winnings are tax free. Max IIRC is £30k per person.
So you could be saving £10k a year into ISA's and up to £30k max into premium bonds.
Beyond that IF the company you work for offer final salary or career average pension - take it. If they offer defined contribution where they contribute its well worth taking.
Pension schemes are the best bet. Basically 100% tax refund on savings.
That said dont forge the rule to have 3 months salary saved for emergencies first. An ISA is good for that.
Also they are locked in till 55, so basically an age. Sort your short term emergency funds first.
You can also invest in bonds etc in an ISA and have the £10k annual limit. These can be index protected gilts should you fancy them.
That said dont forge the rule to have 3 months salary saved for emergencies first. An ISA is good for that.
Also they are locked in till 55, so basically an age. Sort your short term emergency funds first.
You can also invest in bonds etc in an ISA and have the £10k annual limit. These can be index protected gilts should you fancy them.
Two words; Compound interest.
Its easy to say I will save £3k a year and in 20 years will have £60k, with a bit of interest on top but its better than that.
I turn 30 next year and have paid into a pension since 21, but I want to start saving so I can retire at 60- a 30 year plan. Looking at the compound interest you can acrue over such a period makes saving look far more appealing, although I have ignored the effect of inflation!
Its easy to say I will save £3k a year and in 20 years will have £60k, with a bit of interest on top but its better than that.
I turn 30 next year and have paid into a pension since 21, but I want to start saving so I can retire at 60- a 30 year plan. Looking at the compound interest you can acrue over such a period makes saving look far more appealing, although I have ignored the effect of inflation!
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