You’ve got the job you’ve been looking for. Is now the right time to start thinking about pensions?
Here’s what YEUK Youth Ambassador Michael Tran, had to share about pensions, why he started thinking about it and what he found when he looked at the landscape:
Your pension is just as important as your wages
When I was in full-time education, all I could think about was how my academia would help get me my first job. After overcoming the hurdles of becoming employed, my thought turned to how I could progress in my career.
What did I have to do? Did I need to return to university?
What I then realised, after being employed for almost 6 years, I never factored my pension into any of my decisions, mostly because it was too lengthy to understand. It’s great to hear then; that as part of the pensions reform, the Government is currently in the process of providing schools with new resources and information, allowing them to educate pupils about how the pension system works.
Pensions Minister Steve Webb said young people glaze over when you ask them about pensions, “but when you tell a teenager that this is going to affect them from the age of 22, you get quite a different response”.
Speaking at a school rated by Ofsted as outstanding in Herfordshire, the Pensions Minister explained he identified a large difference between student expectations. One student optimistically suggested that the State Pension hands out £800 a week, whilst another answered that it was just £9 a week. The correct sum is actually £113.10 a week.
In the statement, the Minister also stated that the Department for Work and Pensions will be coordinating with financial education charity Personal Finance Education Group, to provide the facilities, resources and means needed, to support teachers in schools to deliver a high standard of teaching within Key Stages 3 and 4.
Key stage 3 pupils will learn about the importance of budgeting, money management, and an overview of the different financial products and services available on the market. Key stage 4 pupils will be taught about the system of taxes, credit, and the financial risks that come with it.
The introduction of teaching the importance of pensions has never been so important for young people, now that new legislation means you are automatically enrolled onto a workplace pension from the age of 22. This action should encourage young people to think further ahead in their careers, and provide the foundation for long-term financial plans – so will almost certainly play a part in lifestyle, careers choices and pathways.