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Pensions - John C. Kirk — LiveJournal
Oct. 16th, 2004
12:10 am -
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October 15th, 2004 05:13 pm (UTC)
Almost all employers will match your pension contributions, up to about 5% of your salary. Plus you don't pay income tax on them. For those reasons, paying money into pension schemes is a far better way of saving than paying back loans early. Do the maths - once you've accounted for compound interest, you end up two or three times better off saving 5% of your salary each month than paying your mortgage off even ten years before you retire and then paying the same amount into a savings account. And a factor of two or three in your retirement income is the difference between eating cardboard and being able to enjoy all the free time you suddenly have, regardless of whether you own a house or not. :-)
FWIW I'm on the BBC's in-house pension scheme, currently contributing about £100 a month.