Pensions

The Biggest Pension Mistakes That Can Really Cost You

There are lots of mistakes that you can make when it comes to your pension that you should know about. These mistakes can seem quite small but end up costing you a lot in the long term. The more you know about these things, the easier it will be to protect yourself. If you want to have enough to live comfortably in your golden years, it is imperative that you read through this article.

Not Putting Enough Aside

If you ask yourself if you could be putting more money aside for your pension, the answer is probably a resounding “yes”. One of the biggest mistakes that people make regarding their pensions is to not save enough money. Making some sacrifices in the short-term can lead to huge long-term gains that you will enjoy later on in life.

Waiting too Long

Many younger people put off contributing to their pension for as long as possible, but this only hurts them in the end. You should make a point of starting early on so that you won’t have to worry about not having enough when you are older. When you do the math and figure out how much you will have to save to live comfortably by the time you are 60 years old, you’ll be more likely to start sooner rather than later.

Not Looking at the Pension Pot

A vast majority of people don’t bother to review their pension pots, and it’s something that only ends up hurting them in the long run. You should make a point of doing this at least once each year. Check to see how your investments are paying off so you know how your pension is doing. You don’t have to check it obsessively, but it is a good idea to monitor its progress.

Not Trying to get the Best Possible Value

All of the charges you have to pay with regards to your pension go to the fund manager and all of the services they provide. It is crucial that you know exactly how much you are paying and whether or not you’re getting a good overall deal. You want to know what you are getting for your money, because it might not be worth it. Do you have online access to your pension? Is the customer service at least decent? If not, you should consider going a different route and getting a better deal. There are numerous pension options to choose from, and you don’t want to stick with a raw deal.

Depending on Your Property Alone

As proud as you may be of your home, you don’t want to rely on it as your sole source of funding in retirement. It is important that you spread your money around with different types of investments. The more diversified your portfolio is, the better your chances will be of having enough to live comfortably when you are older. You shouldn’t rely on any one asset to get you through your golden years, because that is just foolish.

Relying on Your Inheritance

While you may expect to inherit a decent amount of money from your parents or other loved ones, you should have other assets that you can use to get through retirement. Unless you are going to inherit millions of pounds, it is a good idea to keep this in mind. Your inheritance along will most likely not last as long as you think it will.

Not Utilizing Workplace Contributions

Everyone should at least think about utilizing their employer’s pension contributions, because it can make saving up enough for retirement much easier. Many people who work in the private sector are not taking full advantage of their workplace pension, which is a big mistake. You should start looking into this immediately, as it can be of great help. Your employer will match your pension contributions up to a certain point. Take some time to do your research so you know all of the details before making a final decision.

Failing to Shop Around

If you decide to get an annuity from an insurance provider, you will need to make a point of doing some research. Because the rates vary so much, it is very important that you know what your options are like. There are tons of medical conditions that can help you boost your income, so you will need to look into this as well. Those who gloss over these things are likely to severely limit their own income.

Student Loans

Student Loan Myths You Need to Be Aware of

There are plenty of myths and misconceptions about student loans that many young people should be aware of. Learning the truth about these loans can put you in a better financial situation and even help you earn a degree. The more you learn about these things, the easier it will be for you to get an education without any unnecessary frustration.

Cost of College vs. The Price Tag

It can be very intimidating for people who haven’t went to college about people being fifty thousand pounds in debt after finishing school. The truth is that the total cost of college and the amount you have to repay are often very different numbers. The amount that you will be required to pay back depends on how much you make after graduating.

You won’t be required to start making payments on your student loans until you are making a certain amount. If you don’t earn much as a result of going to college, you won’t have to pay very much. This is a great system, because it means that you don’t have to repay the full amount of your loan if you end up making a low amount.

If You Don’t have the Money You Can’t Attend University

Some people also believe that they need to have the cash to go to school to pursue a higher education. You can actually get everything taken care of by the Student Loans Company, but you’ll eventually have to start paying back what you borrow. And while these loans can be very helpful to those who are struggling financially, you still certainly have the option of paying for your tuition directly.

You have to Keep Paying Forever

The fact is that if you haven’t taken care of all your student debt 30 years after you have graduated, all of it will be completely wiped out. While most people do manage to pay off their loans by then, it is still something to consider. If you don’t end up getting very much out of your degree, it is a comforting thought. Most people who just make 25k per year don’t end up repaying their student loans in full but may also end up in debt via different types of loans if they’re struggling to make ends meet and could even end up with a bad credit score.

Debt Collectors will Start Hassling You

Unlike the United States, there are no debt collectors for unpaid student loans in the UK. This means that if you aren’t currently paying towards your student loans, you won’t have to worry about being harassed by constant phone calls or emails. You pay back your loans through the payroll, so this is simply not a thing.

Part-Time Students Can’t get Loans

If you are thinking about going to school part-time, you can in fact get loans that will help with tuition. This also applies to those who are going for post-graduate degrees. There are actually a lot of part-time students in university. This is often a good option for those who are working while going to school. If you want to earn your degree as an older adult, you should consider going part-time in the evenings.

Borrowing for Living Expenses is Difficult

While you can borrow money to cover your everyday living expenses while in college, it can be a little tricky for some people. It will all depend on how much money your parents make. Those who have parents that make a lot of money probably won’t be able to get a loan for these expenses. You should still make a point of applying for these funds though, as they can really help you with getting through college as comfortably as possible.

Your Student Loans Will go on Your Credit File

While some people believe that their student loans will appear on their credit file, the truth is that they do not. This means that they won’t be able to count against you in any way (or for you depending on how you look at it.) This can be comforting to some people who take a while to pay back their loans.

Student Debt Will Keep you from Buying a House

Most people who are saddled with student debt can still get a home, but not always. When the lender runs an affordability check on you, they look to see if you are going to have enough disposable income to make your mortgage payments each month. If you are already struggling to pay back your student loans, it’s probably not a good idea to buy a home.

Final Thoughts

Student loans have helped many people of all ages earn their degrees without paying anything upfront. If you want to go back to school, it is important that you have a full understanding of these myths. Don’t let outright lies about these loans keep you from applying, because they could make your life a whole lot better.