Our financial columnist lays down some pension home truths

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Whether or not you’ve gotten round to starting that pension, Money Muse Lorraine Donegan offers some sound advice on where to go from here.


I have an aunt in Canada that is my financial inspiration. When her family was young, she spent her money wisely, buying every bargain she could and saving into her own retirement fund. Don’t think for a second that she lived a frugal life full of denial, not Auntie Alice! Being smart with her money has meant that, even at 85, she still lives life to the full. She dines out three or four times per week, takes holidays, keeps active, and is a fantastic example of the glory of pension planning. The problem is, she is in the minority.

As a financial advisor, I chat to women all the time that say things like “I don’t need a pension, my husband has one”; “I’m too young to start thinking about a pension – I’ll sort it out some other time”; “I’ll just live off the State Pension – it’ll be enough”; or “I’ve got a pension through work, so I don’t need an independent one”. It’s time we collectively copped ourselves on.

What happens if your relationship breaks down in five, ten or 20 years? Or, what if your partner’s pension choices don’t reap the financial reward you both expected? What will you live off in retirement then?

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If you keep putting a pension on the long finger, be aware that the longer you wait, the more tax breaks you are missing out on, and the more you will have to save in later years. As for presuming that you’ll be able to live off the State Pension, think again! We don’t even know that the State Pension will exist in 20 years’ time, never mind presume that it will cover all our bills and leave us enough to enjoy life.

Thankfully, however, if you’re in full-time employment, then your employer probably offers some sort of pension scheme. If you aren’t currently paying into the scheme, then find out about it and choose to either opt in or set up your own pension independently. If you’d like to get some immediate details, then check out The Pensions Authority website. Next month, I’ll go into more detail on pension options.

Until then, Lorraine

Related: Make 2019 the year you get your finances in order

Lorraine Donegan, aka the “Money Muse”, is CEO and founder at Donegan Financial Services. If you’d like to ask any specific questions about any finance-related topic, email [email protected]

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