I turn 25 this year. That’s a quarter of a century. The average woman in the UK lives to 81, so I am nearly a third of the way through my life. Isn’t that a scary thought?! And not only that, the retirement age currently sits at 67 (and is forever rising) so I know I am likely to spend the next 40 years working. That means I have pretty much working years left of my life. Again, isn’t that a scary thought? And so with this dim outlook, I am constantly being told to plan ahead, start saving, and get a pension. Nothing screams ”hey you’re an adult now” that having a meeting with a financial planner and discussing pension options.
And that is exactly what I have been doing since I joined Avios last year. Every month, a small pension contribution is taken from our wages per month, and the company match that with a contribution of their own. There is no choice in paying or forgoing it, the only choice is how much you pay and how you pay it. So, as soon as I joined, I began to receive advice on pension payments and plans.
It’s a lot of information for someone who has barely ever had to pay tax, and wasn’t yet paying any of her student loan back. One piece of advice I took from everyone was to start paying as much as I could as early as I could so that I never noticed it going out and the amount I would later have would allow me to live a better life and (hopefully) retire early.
Aside from that, I was clueless. The offer of pension advice and financial meetings was offered when I joined the company, so I decided to take up the offer. Within a couple of months I entered a plan to reduce my wage and increase my pension. It apparently allows me to save more whilst ensuring I don’t lose out too much in my day to day life. I still have absolutely no idea if it was a good idea to join, I just know that I make the same and have been told it is better.
After meeting with the advisor, he confirmed this was a good decision. He then asked if I could contribute more into my plan as a percentage of my wage, as it would pay out significantly when I was older and I would barely notice it now. What is a few treats less now for a better life later? So of course, I agreed again.
So now, I pay a considerable amount of my not overly large wage into a pension. I have no idea if this is a smart move, What if I don’t live to see retirement? My generation is apparently the first that will die before their parents. What if I never reach retirement age? They are increasing retirement age year on year. What if, even with the higher amount, I can never afford to retire? Tuition fees are higher than ever, and it is harder to get onto the property ladder than ever before?
And so this all leaves me with the feeling that adulting is both hard work, and that it is all about fighting a series of losing battles. For an inherently optimistic person, this is a scarily pessimistic outlook on life. Part of me thinks I should keep on the path I am, as it may pay off one day, and part of me thinks that I should scale back the rainy day old person fund I am setting myself up with and live in the moment.