Don’t say no to free money!

Don’t say no to free money!

How many of us are saying ‘No to free money’? A lot of us are doing this on a daily basis, especially young people.  Here’s why you’re never too young to start thinking about your pension.  Sister Rosalind has been a Pension Advisor for decades.  This is her advice.

If someone offered you extra money, would you say ‘no thanks’? No, well why are you saying no to free money daily?  If you are currently working full or part-time, and your employer has a pension scheme, join!

The law currently says all employers are legally obliged to offer their staff a pension scheme.  When an individual joins a pension scheme, the employers (as well as the employee) pays into the scheme.

Contributions are generally deducted from your pay and attract Tax Relief.  I know when you’re young, the last thing you think about is pension, the days of reaping pension benefits feels like a lifetime away but, when you reach that amazing milestone, you’ll be thankful and grateful that you did join the company’s pension scheme.

The terminologies being used may be confusing, and this is off putting for some people. The reality is, once you know what some of these terminologies mean, making your decision will become much easier.

Most employer’s pension arrangements are known as Defined Contributions (DC) scheme. This means that the contributions you and your employers pay in are added to a Pension Pot.  The Pension Pot will go up or down with the value of the investment choices that you have made.

If you don’t want to make investment choices, your employer will arrange for your contributions to be paid into what is called “A Default Lifestyle Strategy”. This means that your employer is making investment choices on your behalf.

At your retirement age, this will vary by scheme or could be age 65 for State Pension, the value of your pension pot will be used to purchase a pension (known as an Annuity).

This annuity will be payable for the rest of your life and, depending on the choices you make at retirement, may provide a dependant’s pension on your death.

In summary

If you join your employer’s scheme, both you and your employer pay in.

Most schemes have a legal minimum contribution (Employees and Employer’s combined) of 8%.  Out of the 8%, your employer pays 3% and you pay the remaining 5%.  Many employers pay more than 3% depending on the arrangement you have.


For more information:

  1.  about your employer’s scheme, please contact your HR dept.
  2. about pension more generally, please contact:

“The Money and Pension Service”

on line  at and pensions or by phone 0800 011 3797

  1. For anyone who have paid into a scheme, but have lost contact with their Pension Provider, please contact:

“The Pension Tracing Service on contact details.

Ok, having read the above information, why would you say ‘No to free money?’ I hope these information are enough to convince you to join your company’s pension scheme ASAP.