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MONEY COMMENT
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One way that I test whether something is a financial 'hot topic' is to drop it into conversation in my local pub. Mention house prices and the response goes off the scale, with everyone willing to chip in their opinion on the future direction of the property market. However, bring up pensions and very few people are willing to join in. That's a real worry because, after buying a home, saving for retirement is one of the most crucial financial choices that we make in life. Sadly, the Association of British Insurers (ABI) recently warned that around ten million workers (more than one in three) are either not saving anything for retirement or are failing to save enough. What's more, according to new research from the ABI, we're willing to spend everyone's money except our own to fund our 'grey years'. The ABI has revealed that almost three-quarters of working adults (73%) believe that compulsory pension contributions for workers, employers or both are a good idea. Then again, only around a quarter of the 2,479 workers questioned (26%) would support compulsory pensions if they ended up with lower take-home pay! When asked whether compulsory pensions should be funded by workers or employers, people naturally agreed that their employers should pay. However, many respondents were turned off by the idea that these employer contributions could be funded by lower pay rises. I've recently started contributing to my company Stakeholder pension scheme, after the Motley Fool generously increased its contribution. Thanks to a combination of tax relief from the government, plus extra contributions from the company, every pound I contribute turns into almost £2.30 on day one. So, if I invest £200 a month into the Fool scheme, I get almost £460 a month invested, which is instant growth of 130%. This extra £260 comes to a tasty £3,120 a year, which I think of as a bonus, because I see pensions simply as 'deferred pay'. My contributions go into a low-cost index-tracking fund, which passively tracks the FTSE 100 index. What's more, the annual charge is a mere 0.7%, with no other charges, making it one of the cheapest pension plans around. I now regret waiting fifteen months before joining the Fool company pension plan, as my dithering means that I've missed out on a juicy slice of tax relief, plus extra contributions! However, I waited until this April before jumping in, when my pay rise lessened the blow of starting to pay into a pension. If you're worried about how to fund your pension, check out these articles on ways to boost your pay and cut your expenses: With any luck, these tips could help your pension to pay for itself! More: Visit our Pensions centre.