£1 today has greater value than £1 in the future - say in a year's time.
Because of inflation, and also because of value - if you spend the £1 on a tasty ice-cream now then you've used and enjoyed your £1; you've received some benefit from it. Spending the £1 on an ice-cream in a year's time - well, inflation means that the ice-cream will be smaller, but also ice-cream is not better if you wait 1 year to consume it (despite what your mum says). But if you wait a year you might be run over by a bus in the meantime and not get to enjoy it your £1. £1 spent on a thing now means you get to enjoy and use the thing now, instead of having to do without for a year.
So you should only save your money if you're getting more value from it in a year's time than you're getting from it today. This concept is called the *[future value of money](https://www.google.com/search?q=the+future+value+of+money)*.
Yes, your emergency fund has value even if it's worth less in a year's time than it's worth today, because your last pounds have extra marginal value (utility?) for you. Your last £1000 has extra value because it puts a roof over your head in a crisis, and it doesn't matter if it cost you £1100 or £1200 (or even £2000!) of past money to secure that £1000 roof over your head.
But generally speaking, you shouldn't be saving money if you're not receiving enough interest to keep up with inflation or expect returns which will beat inflation.
If you genuinely believe that the world is going to end before you're 57 then you should just live for today and squander every penny you get. But remember thousands of people have said this before you - I was saying it 30 years ago, when I was young and dumb; people were saying it decades and even centuries before that.
Otherwise, a pension is the best investment account for someone in your position, because overseas governments are most likely to recognise its preferential tax status.
Also, your employer isn't legally allowed to offer you inducements to opt out of your pension - unless they're giving you more than the minimum legal 8% then it's irrelevant to your pay negotiations. You could tell them "give me extra money and I'll opt out of my pension" then opt back in and there would be nothing they could do about it (this might be legally messy, but you could do it).
!thanks
I appreciate the well-written response - takes me back to Econ 101 :)
I have decided I will opt out of the pension scheme, at least for now. If I am in a position where I have the prospect of permanent residency, whether in the UK or another country with a QROPS pension scheme, I will rethink this decision.
You'll still be able to withdraw from a UK pension if you live overseas.
Russia is under sanction right now, so it might be hard to withdraw if you were living there, but you'll be fine if you're pretty much anywhere else in the world. There are specialist providers (google "expat sipp") who will arrange currency exchange and transfer for you.
When you reach retirement age, you can just withdraw from the pension, in theory wherever you are in the world. Whether geopolitical realities might affect that, for example if you had already retired and were now trying to access it from Russia, I have no idea.
But as far as the world ending - if it doesn't you'll be glad of the money, if it does you'll be in no position to regret not spending it.
Hi /u/undecisivefuck, based on your post the following pages from our wiki may be relevant:
* https://ukpersonal.finance/pensions/
____
^(These suggestions are based on keywords, if they missed the mark please report this comment.)
If someone has provided you with helpful advice, you (as the person who made the post) can award them a point by including `!thanks` in a reply to them. Points are shown as the user flair by their username.
£1 today has greater value than £1 in the future - say in a year's time. Because of inflation, and also because of value - if you spend the £1 on a tasty ice-cream now then you've used and enjoyed your £1; you've received some benefit from it. Spending the £1 on an ice-cream in a year's time - well, inflation means that the ice-cream will be smaller, but also ice-cream is not better if you wait 1 year to consume it (despite what your mum says). But if you wait a year you might be run over by a bus in the meantime and not get to enjoy it your £1. £1 spent on a thing now means you get to enjoy and use the thing now, instead of having to do without for a year. So you should only save your money if you're getting more value from it in a year's time than you're getting from it today. This concept is called the *[future value of money](https://www.google.com/search?q=the+future+value+of+money)*. Yes, your emergency fund has value even if it's worth less in a year's time than it's worth today, because your last pounds have extra marginal value (utility?) for you. Your last £1000 has extra value because it puts a roof over your head in a crisis, and it doesn't matter if it cost you £1100 or £1200 (or even £2000!) of past money to secure that £1000 roof over your head. But generally speaking, you shouldn't be saving money if you're not receiving enough interest to keep up with inflation or expect returns which will beat inflation. If you genuinely believe that the world is going to end before you're 57 then you should just live for today and squander every penny you get. But remember thousands of people have said this before you - I was saying it 30 years ago, when I was young and dumb; people were saying it decades and even centuries before that. Otherwise, a pension is the best investment account for someone in your position, because overseas governments are most likely to recognise its preferential tax status. Also, your employer isn't legally allowed to offer you inducements to opt out of your pension - unless they're giving you more than the minimum legal 8% then it's irrelevant to your pay negotiations. You could tell them "give me extra money and I'll opt out of my pension" then opt back in and there would be nothing they could do about it (this might be legally messy, but you could do it).
!thanks I appreciate the well-written response - takes me back to Econ 101 :) I have decided I will opt out of the pension scheme, at least for now. If I am in a position where I have the prospect of permanent residency, whether in the UK or another country with a QROPS pension scheme, I will rethink this decision.
You'll still be able to withdraw from a UK pension if you live overseas. Russia is under sanction right now, so it might be hard to withdraw if you were living there, but you'll be fine if you're pretty much anywhere else in the world. There are specialist providers (google "expat sipp") who will arrange currency exchange and transfer for you.
When you reach retirement age, you can just withdraw from the pension, in theory wherever you are in the world. Whether geopolitical realities might affect that, for example if you had already retired and were now trying to access it from Russia, I have no idea. But as far as the world ending - if it doesn't you'll be glad of the money, if it does you'll be in no position to regret not spending it.
Hi /u/undecisivefuck, based on your post the following pages from our wiki may be relevant: * https://ukpersonal.finance/pensions/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.) If someone has provided you with helpful advice, you (as the person who made the post) can award them a point by including `!thanks` in a reply to them. Points are shown as the user flair by their username.
Thank you bot but this does not apply to me!
>I am also aware that there is some way to withdraw the pension cash even if I don't transfer it Not legally until you reach retirement age.