Clueless about pensions.?

Question

Hi I have started a new job and I am joining the pension scheme, I am contributing a percentage of my salary and my employers are matching it. I am being asked to decide what percentage of this contribution i want to go on; balanced fund and growth fund? eg 30% on one and 70% on the other. Any Advice anyone? Our pension department are not keen on telling me which way to spilt it. I am 25 by the way so a long way off retirement yet.

Answer 1

Not knowing the funds or you, I can't advise on which is more suitable for you - and nor can your employer.  A general rule with investments is that the more volatile they are, the greater the risk of short term loss, but the better the chances of long term gain.  The growth fund is likely to be more volatile than the balanced fund.  You've got 40 years to go, but you need to decide how much of a risk taker you are - and whether you can cope with the stress of seeing the stockmarket fall down a hole every few years.

Answer 2

Personally I would advise you NOT to join your company pension scheme, and pay regularly into a seperate bank account.

A few years ago I joined the pension scheme of one of the companies I worked for.  As it turned out I stayed there less than two years, and paid into the scheme nearly £1000.  When I left I got just £5 BACK.