How soon is now?
At the risk of betraying his age, Brian Hill of Jones Hill Ltd turns to the pop charts of the past to offer you some pension tips for the future – so that you can still have opportunities well into your eighties – and beyond.
If you remember ‘This Ol’ House’ released by Shakin’ Stevens, you’ll probably also remember life not just before iPhones, but a nostalgic time when long curly cables connected handsets to phones you’ll now find in the ‘retro’ category on eBay.
Pensions in those days were a given; pretty much everyone had one. And when you came to take your pension after working for one company for 30 years or more, the order of the day was a handshake, a carriage clock, and a relatively short life expectancy.
Fast forward to the present day, and carriage clocks are confined to the chintzy glass display cabinet in your local jewellers, people switch jobs at the drop of a hat, working 9 to 5 is a quaint old notion, and we’ve never lived as long as we do now (except maybe in Noah’s time, but then again they had talking donkeys back then too).
A recent report by NOW:Pensions showed that 18-35 year olds are split into two tribes: almost 6 in 10 of them aren’t saving toward retirement, but the remaining forty per cent are starting to take this issue seriously. Part of this, I’m sure, is that our ideas about retirement have fundamentally changed. Younger people are seeing this first hand: many people are no longer really retiring, but instead are just changing their work pattern. If people do stop work completely, it’s often much later in life than their nominal retirement age.
But then if NOW:Pensions’ survey is right, young people are now starting to give retirement (or perhaps we should call it ‘financial independence’) a proper look. One big reason it’s on their radar is undoubtedly the introduction of the new pension freedom. However, it’s also clear from the survey that these youngsters can’t plough huge amounts into their pensions – they have house deposits to save for, they need to bring up families and they still need a social life on top of all those other commitments.
If you’re one of those who are thinking about starting to save for later life, here are 7 tips to help you decide on a course of action.
- Don’t put all your eggs in one basket
- Learn how the key savings tools (ISAs and pensions) work
- Avoid credit cards like the plague
- If your employer contributes to a pension for you, it’s probably a good idea
- If your employer doesn’t offer a sick pay scheme, don’t forget that you can arrange your own
- Build an emergency fund first; you’ll be glad you did.
And number 7? Well, this is especially for you, and it’s something I learned on my first day in the Army, back in September 1988: ‘Proper prior planning and preparation prevents a poor performance’. Remember that it wasn’t raining when Noah built the Ark, so it’s never too early to start working on your own financial plan. Or to quote another blast from the past, The Smiths, ‘How soon is now?’ When you do start to plan, always plan with the end in mind.
Hope you spotted the seven top hits from the 80s!