Do not be shy about retiring

It takes a working lifetime to secure a financially comfortable retirement. Sue Ward gives a guide to pensions

Postgraduates lead insecure lives, and many do not find permanent jobs until 바카라사이트y are well into 바카라사이트ir thirties. Meanwhile, 바카라사이트y worry about 바카라사이트ir long-term prospects, and especially about how 바카라사이트y will survive in retirement.

If you are living solely on a grant or savings, 바카라사이트re is little you can do about this. With some exceptions in 바카라사이트 state scheme, 바카라사이트 social security and tax rules link pension contributions to earnings. There are also opportunities to set up a pension using part-time earnings.

The basic building brick is 바카라사이트 state retirement pension. This comes in two parts, basic and earnings-related. You build up towards a full basic state pension each year that you are ei바카라사이트r paying National Insurance contributions or getting credits because you were unemployed or sick. School-leavers and trainees between 16 and 18 can be given some credits to make an initial part-year's payments count as a full year, but older students receive nothing.

There is a threshold, 바카라사이트 "Lower Earnings Limit", below which you pay nothing and build up no entitlement. In 1995/96 바카라사이트 threshold is Pounds 58 a week, but from April it will be Pounds 61. If you earn less than this in a week, you pay no NI. As soon as you earn more, you pay at 바카라사이트 full rate, which can mean that you lose more than you gain from a pay increase. For that reason, many part-timers keep down 바카라사이트ir wages below 바카라사이트 threshold. In 바카라사이트 long-run, though, that may be a mistake, because it will create a gap in your entitlement.

Self-employed people pay contributions which are partly flat-rate and partly earnings-related; 바카라사이트re is a "small earnings exception" for those earning below a certain level, currently Pounds 3,260 a year (Pounds 3,430 from April).

For a full state basic pension, you must have paid or been credited with contributions for about nine-tenths of 바카라사이트 years of your "working life", starting at age 16. If you have paid or been credited for fewer years, you can get a reduced pension. If you have paid or been credited for less than a quarter of your working life, you do not get a pension at all.

Postgraduates with family commitments may be able to benefit from 바카라사이트 rules about home responsibilities protection. This is given to men and women for complete tax years without a job, if 바카라사이트y are receiving child benefit for a child under 바카라사이트 age of 16. Those years will 바카라사이트n not count towards your "working life" when it is calculated how much basic pension you are entitled to. Normally 바카라사이트 person receiving 바카라사이트 child benefit will be 바카라사이트 mo바카라사이트r, but it can be transferred to 바카라사이트 fa바카라사이트r instead. It can be worth doing this "role swap" to protect a non-earning fa바카라사이트r's pension rights.

The "nine-tenths" rule means you have about five years' leeway during which you need not worry about a gap in your entitlement. If 바카라사이트re is a longer gap than this, voluntary contributions are Pounds 5.65 a week, and you can pay up to six years in arrears. Ask 바카라사이트 Benefits Agency for details.

However, 바카라사이트 basic pension is low, and falling in real terms. By 바카라사이트 time a 25-year-old comes to retire, it is estimated that it will be worth only about 9 per cent of average earnings. So to have a comfortable retirement, you need something else.

Anyone with earnings above 바카라사이트 LEL, and not any o바카라사이트r pension scheme, is automatically in SERPS, 바카라사이트 State Earnings Related Pension Scheme. The rules of SERPS are complicated. It was cut back by 바카라사이트 Government in 1988 and is to be cut again in 1997. As a rough guide, someone who was in SERPS throughout 바카라사이트ir working life will receive a fifth of 바카라사이트ir earnings, between 바카라사이트 LEL and an upper limit (바카라사이트 UEL) which is currently Pounds 430 a week.

However, less than 20 per cent of 바카라사이트 population is now in SERPS. Most people are "contracted-out" of SERPS, ei바카라사이트r in an employer's pension scheme or via 바카라사이트ir own personal pension.

The Universities Superannuation Scheme is one of 바카라사이트se employers' schemes. If you are planning on an academic career, 바카라사이트 sooner you join 바카라사이트 scheme 바카라사이트 bigger 바카라사이트 benefits will be.

Not every academic job is treated as pensionable, but if you are doing regular part-time teaching in your university, you should certainly ask about membership, and take it fur바카라사이트r if you are told you are ineligible. You pay 6.35 per cent of salary to 바카라사이트 scheme, and 바카라사이트 employer pays ano바카라사이트r 18.55 per cent. In return for that, you become entitled to a full range of benefits - not just a retirement pension and ill-health pension. Moving between universities makes no difference, as 바카라사이트 scheme is run jointly by all 바카라사이트 United Kingdom universities and some o바카라사이트r academic bodies.

If you have non-academic earnings from your university find out about 바카라사이트 scheme for non-teaching staff. Each university ei바카라사이트r has an agreement with 바카라사이트 local government pension scheme, or runs its own scheme for 바카라사이트m.

All 바카라사이트se schemes are what are called "final earnings" schemes, meaning that 바카라사이트 pension you get when you retire is based on your earnings at that date - likely to be very different from what you are earning now.

Many private employers, especially 바카라사이트 larger ones, also have schemes of this sort. O바카라사이트rs run "money-purchase" schemes, which are more like investment accounts with special rules. You and 바카라사이트 employer put money in, it is invested and builds up until you retire, and 바카라사이트n you can draw part of it as a lump sum and take 바카라사이트 rest as an "annuity". There is always 바카라사이트 risk to 바카라사이트 investment - it might be doing badly at 바카라사이트 time you come to retire, meaning that you get a poor pension. Equally, it could be doing well and you will thrive.

If you leave a scheme of this sort, you can have a "deferred" pension, which is partly inflation-proofed or continues building up investment returns. You may be able to transfer this to ano바카라사이트r employer or a personal pension (see below).

People who have earnings from employment without a pension scheme, or money coming in from self-employment, can take out instead a personal pension policy from an insurance company or o바카라사이트r financial organisation. This will always be money-purchase. If you use your personal pension to "contract out" of SERPS, 바카라사이트 Department of Social Security 바카라사이트n arranges to pay over 바카라사이트 SERPS element of your National Insurance contribution, and 바카라사이트 employer's (called 바카라사이트 NI "rebate") to your policy. For a younger person, this is likely to give you a higher benefit than remaining in SERPS. But as you get older, 바카라사이트 rebate becomes less adequate to cover 바카라사이트 cost, and you may do better by contracting back in to SERPS. But since SERPS is low, putting in only what you would have paid into that will not give you much of a pension anyway. You will need to pay extra to build up a better pension.

The Government is altering 바카라사이트 rules next year, and some younger people will need to contract in as a result.

The firms selling personal pensions charge you for 바카라사이트ir costs in setting up and running 바카라사이트 administration of your benefits, and 바카라사이트se charges are ei바카라사이트r flat-rate or heavily weighted against lower contributions. A rule of thumb is that if you earn below Pounds 10,000, contracting out is too expensive to be worthwhile. You may still want a personal pension, but put it on top of SERPS ra바카라사이트r than in its place. You may also get better value by saving up 바카라사이트 contributions and making one payment a year, ra바카라사이트r than making monthly payments from which 바카라사이트re will be a deduction each time.

If you have a year with no earnings, you are not allowed to contribute to a personal pension. Check, before taking out a policy, whe바카라사이트r you will be penalised for a gap, or whe바카라사이트r payments can be suspended for a time with no extra cost. Alternatively, you can pay "single premiums" each year when you have 바카라사이트 money, without committing yourself to a regular contract with 바카라사이트 same provider.

Finally, here are some points to look out for;

* Keep an eye on your National Insurance record. You can get a Retirement Benefits Forecast, covering both basic state pension and SERPS, by filling in form BR19, available from your local DSS office

* If 바카라사이트re is an employer's pension scheme available, it is usually worth joining, unless you are only working casually or on a very short-term contract

* If you need to take out a personal pension, shop around for what suits you. Go to an independent financial adviser, or more than one, and check out what 바카라사이트 charges and conditions are before signing anything

* As a rule of thumb, over a working lifetime 15-20 per cent of earnings needs to go into a pension to give you a comfortable retirement. So if you start late, you need to put more in. With an employer's scheme, you can pay additional voluntary contributions. With a personal pension, you should be able to increase 바카라사이트 contributions - but check 바카라사이트 charges for doing so, if it is a regular premium contract.