Meeting new people is fun and naturally when people ask what I do, I often start talking about Magical Penny.
Because of this revelation earlier on in the week, the conversation in the pub the other day turned to pensions (Yes I know how cool we are!).
Some of my friends have no pensions (the horror!), but two friends mentioned they had final salary pension schemes, whilst others had stakeholder pensions, or private pensions.
Confused?
Thought so.
Pensions are one the most confusing financial product out there!
According to a recent study by the University of Bristol and Confused.com, pensions are the most confusing product, with 83.9% of people finding them confusing.
In fact 33.8% of people said they were ‘very’ or ‘totally’ confused by pensions. That’s over a 3rd of the 6000 respondents in the survey!
I enjoy learning about financial products and even I struggle to get my head around all the different options sometimes.
Confusion on pensions is not surprising though.
There is so much choice of pension products and within each pension product there are thousands of funds and investments to choose from. Most people are either crippled by too much choice, don’t think they need to save just yet or are saving in a pension but are likely to be getting a poor deal.
Introducing the Magical Penny Pension Series
Magical Penny‘s primary aim is to help you understand how you can grow your pennies and get started on saving for your future.
Starting only a few years earlier than you might have otherwise can mean the difference of tens of thousands of pounds over the course of your lifetime so it’s important to learn about the differences between different pension products and if you even need to have a pension at all (hint: it’s not always the best way to save your your future!).
Before the series starts I would love to hear your questions or suggestions on what pension information you are most interested in. Leave a comment on this post or send me an email at adam AT magicalpenny.com.
Have a great week and keep saving. 🙂
Source: Confused Nation study:
The study revealed that:
- 71.9% of people suffer from confusion over how to make money and use it wisely;
- Pensions are the most confusing product, with 83.9% of people finding them confusing;
- 33.8% of people said they were ‘very’ or ‘totally’ confused by pensions;
- 79.1% of people said they found mortgages confusing;
- Credit cards were the least confusing product – 40% of people said they were not at all confused by credit cards.
The study was developed by the University of Bristol and Confused.com, which covers a cross section of 6,000 UK residents. It explores how people feel about modern life and how they cope with its demands. The findings have been used to create a new website http://www.confusednation.co.uk which helps baffled Brits by providing clarity on confusing issues.
{ 3 comments… read them below or add one }
Yes! Onto the good stuff.
I have a ‘group personal pension scheme’. Whatever that means. But I can access it through t’internet and meddle with where my money goes.
This is like a man with a tree phobia getting lost in a forest.
I can channel my cash into any one of over 240 funds, or any endless combination thereof. At the minute, the whole thing has me so bamboozled that I just plump for the Ethical fund to try and avoid the arms dealers, but even that has several oil companies in the portfolio, and I’d rather be throwing money at BAE Systems than BP.
The only thing I know to avoid is the ones that skim an extra management charge.
But where next? Among the funds I can consider:
Global Emerging Markets Equity Select Portfolio
SE Absolute Insight UK Equity Market Neutral
SE AEGON Enhanced Long Corporate Bond
SE BGI over 5 years UK Index-Linked Gilt Index
UK Fixed Interest and Global Equity Tracker Lifestyle
What the hell does all this nonsense mean? Do these economist types really believe their own BS? No wonder the world economy went down the pan with this much jargon floating around.
Anyway, rant over. Look forward to reading more.
As I’ve already told you, my company won’t offer me a pension til I’m 24! And you’ve already said I’m probably better channelling my “pension money” into an ISA until then. But on bbc news yesterday or whatever, they had this bloke on saying you need to a certain percentage away based on half your age when you started saving or something. IE if i start saving at 22, I should be putting away 11% of my earnings. So thats incentive enough to start saving as if i leave it til i’m 24, he recommended 12%!!!
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