Question: I'm 41 with a husband and two children, and was contemplating starting a pension. My employer will facilitate this, but not contribute. Now I've read about the upcoming auto-enrolment, so I might just wait for that, but my friend says that I'm an idiot to do so. Can you advise me? My husband has a pension through his work but it not that big.
Answer: The fact that you are considering taking out a pension at all means that you're definitely not an idiot. But your friend is probably right about not waiting. The Government wants to ensure a greater number of people have a better income in retirement by introducing the auto-enrolment scheme.
But such large initiatives can take years to put in place with its introduction currently planned for 2022.
CEO of the Irish Association of Pension Funds (IAPF) Jerry Moriarty says his sense would be that you really cannot afford to wait for it. It is often the case that only one spouse in a household has a pension fund.
In many cases, both parties may be under the misguided belief that this one pension will be enough to provide for them both in retirement.
But more often than not these pension pots are simply too small to sustain two people once they are no longer working.
Mr Moriarty says you should take steps to start a pension now. Take the assistance offered by your employer, and depending what level of advice you can get, there you might also engage an independent financial adviser for their expertise.
Time is as important as money when it comes to pensions. With the compounding effect of growth, the money you put in now could double or treble by the time you retire. Couple that with the tax relief, and it's the best investment you can make.
Read the full article here.