# Starting a career - Pension and Share schemes



## DuncanMon (May 25, 2009)

Well, I've just this week started a permanent job, first one I've ever had really. Always worked for agencies etc beforehand.

It's with Diageo working as a Quality Auditor in their Bottling Factory at Leven. I interviewed for the job in two different shift patterns, one 40 hour night shift, the other the 19 hour back shift. Sadly I got the back shift but I'm really just glad to have got my foot in such a huge worldwide company. Was working 40 hours a week beforehand in an Amazon factory with lots of overtime possibility, but on £6.10 an hour and through an agency.

I obviously hope to move over to one of the various other shift patterns offering full time at 38-40 hours. Hopefully within my first 6months there and if not a year (been told they like employees to stay in a role for a year).

My salary is around £11200, works out at around £11.33 an hour. Depending on which shift I hopefully in time move over to it would vary at full time from £24000 to £32000 due to a large hourly premium for night shift and weekend / weekend night shift patterns.

I'm only 21, have no clue about shares or especially clueless about pensions. Now I have to decide on whether to enroll within the company pension scheme in the first three months or I'm forever out. I honestly have no idea how to start looking to see if its worth while, or If going private is the best idea. I'm never one to jump into something whether it be a detailing product or finance stuff without lots of research and advice, so I was hoping you guys could take a look for me and give me some pointers.

http://mydiageopension.com/dlp/Pages/Home.aspx - is the homepage of the plan.

I'm thinking the choice there is going to be a yes get signed up but I'd rather have some advice.

Secondly is the companys various Shares buying schemes.

Firstly is https://www.mydiageoshares.com/Pages/ShareIncentivePlan.aspx which includes both Freeshares and Share purchase with share match.

Freeshares essentially sounds like a non contractual yearly bonus based on how well the company has done, the percentage is set for the entire UK each year and you receive that percent of your salary in shares or cash. Can't really see any downsides there. It's an obvious one to jump on.

Sharepurchase is where they take money from your salary pre tax every month and buy you shares with it, essentially costing you 80p per pound used. Sharematch works along with this and for every two shares you buy they give you one free.

Next is https://www.mydiageoshares.com/Pages/UKSharesave.aspx which sounds like a saving scheme with share options.

I really like the sound of this, makes saving easier and gives you the option of what to do with it at the end. When you enter the plan the share price is set and 3/5 years down the line you can then buy shares with how much you have saved at the price originally set, or take the savings back as cash. This is taken post tax salary but share prices are discounted by 20%.

I think that's all haha. May well be the longest thread I've started on here.

Cheers for any advice, I'm sure there's stuff I've completely omitted that you would need to know to advise me but just ask away.


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## maestegman (Mar 3, 2011)

Duncan - first of all (and please take this as a sincerely complimentary remark rather than a condescending comment), well done on considering your pension options on embarking a permanent job and at 21! I mean that fella - nice one!

I am not a financial expert and I can only offer you layman's advice. I would however ask you to consider the following:

1. Do you actually need a pension? Although it's something I would recommend, pensions are not for everyone - there are other investment options.

2. Can you afford to start a pension? Do you have debts that might be better paid of with the money first?

3. Today's / Tomorrow's job market is going to be a highly fluid environment. How does your pension pot port from Diageo to another employer/pension provider?

All of the options you've listed above offer pros and cons.

I'd always go for the safest option . . .


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## Bero (Mar 9, 2008)

My dad's worked for Diageo for 30 years...

Share scheme - pretty much a no brainer if you can afford it. You spend a little and get more back

The pension should be good too - i imagine they add significantly to your contribution (dad's is final salary, not the one you're offered). Regardless of conflicting advice on pensions they are a very tax efficient use of money, if you're employer is giving you even more it should be good.

If you calculate £11,200 per year as over £11 per hour I suggest you take advice before going into any financial transaction :thumb:


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## DuncanMon (May 25, 2009)

maestegman said:


> Duncan - first of all (and please take this as a sincerely complimentary remark rather than a condescending comment), well done on considering your pension options on embarking a permanent job and at 21! I mean that fella - nice one!
> 
> I am not a financial expert and I can only offer you layman's advice. I would however ask you to consider the following:
> 
> ...


Thanks for the reply and the comments 

Well, 1, I honestly have no idea! I assume I will need a pension, any other alternatives will still involve investing / saving money in some form and doing it via a pension scheme on the whole sounds like an easy way to do so. What I'm not sure about is what sort of benefits having a pension really offers. I also cant seem to work out exactly what percentage of the pension I'm putting in and what my employer are putting in!

2, I would say I can definitely afford the 6%, only outgoings I have are car related as I stay with parents and will do for the foreseeable future. The only debt I have is student loans of around £3500 which I am not so worried about. Have no finance or overdraft, I am good at saving for what I want and largely thanks to reading on here I can never see myself getting into unnecessary debt other than a mortgage down the line.

3, This is one I am not so worried about. The company is such a huge and well respected company (hear nothing but good things about it from anyone local that has worked there for years). They have jobs in such a varied ammount of areas I can see myself being happy there for a long period of time. If I did move they appear to allow the ammount less interest to be moved over to another pension scheme or given in cash to myself (depends on length of employment).



Bero said:


> My dad's worked for Diageo for 30 years...
> 
> Share scheme - pretty much a no brainer if you can afford it. You spend a little and get more back
> 
> ...


Cheers for the reply. Nice to hear about your Dad. The amount of people in my local area that have worked there all their lives is crazy.

Yeah all the share schemes seem to be good. Especially if you realize you are in it for at least 5 years.

The tax efficient part of the pension scheme does make it seem more attractive (as well as the share scheme that's taken pre-tax). From what people say Diageo do add allot to the Pension but I just can't seem to work out exactly how much.

I didn't think my maths was that bad


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## wish wash (Aug 25, 2011)

There's a lot more easier ways making money rather than having a pension


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## Bero (Mar 9, 2008)

wish wash said:


> There's a lot more easier ways making money rather than having a pension


Ok name 7? Can they beat be: -

As tax efficient?
Locks the money away so there's no temptation to dip in when buying a house/car/lady of teh night?
Is not subject to income tax?
Is not subject to Capital Gains tax?
Has a guarantee against losing it (if the company goes bust)?
That you generally start and continue to contribute through your working life?
Can be invested in shares, bonds, guilts and cash (and commodities and property)?

For every £50-60 I contribute the government give me back £40-50 and my company contribute £100. So i get £200 for under £60 cost! In addition to that this it will (hopefully) benefit from compound interest over 40 years until it's effective tax free release!

There is of course other ways of saving/investing but few so effective in tax management and looong term planning.

The thing is a 'pension' is not so much a product, it's a tax free way to save/invest for the long term.


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## wish wash (Aug 25, 2011)

lol I said there's easier ways of making money. I didn't say they were legal


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