In the article last month I looked at a young person starting work. However, as we know our work pattern is flexible and the plan has to be able to stand up to “moving on”

First, we will look at the question of saving into a pension plan. Every job you join now will offer you auto enrolment into a scheme. You must accept this and join because by doing so you will be accepting an employer contribution to your scheme of up to 3% of part of your pay (the definition of exactly how much will change depending on the type of scheme)

When you move from job to job, the financial adviser to one of the schemes may suggest that you transfer your fund from a previous scheme to the new one. This may be a good idea if the charges are no greater and the fund choice comparable. However, I would suggest that you look at an alternative idea

Your own Pension Fund

Inevitably you will have many jobs and be member of many pension schemes. I recommend that early on in your career you set up your own scheme with a Provider of your choosing. Then each time you get a new job you join the offered pension scheme and each time you leave the job you transfer the pension benefits to your own scheme. After a while the largest part of your pension funding will be under your control and if you want to make extra contributions you make them to this scheme. You may even get someone else to pay into the scheme – see later article on “The lean years – getting help”

Your financial plan has two other elements, you will still be paying 3.33% of your pay into your emergency fund and 3.33% into an ISA as your medium term savings. In my experience it is these savings which are “dumped” if you meet a crisis and then frequently do not get reinstated. You must not allow yourself to dump them you must consider them to be mandatory.  If you run into problems certainly remove money from them but keep saving into them. This is not as mad as it sounds. At all times put in 10% to the three savings plans but it can be 10% of whatever is the current income, so if you take a period off to study, it will be 10% of the income you receive for working part time in a bar, or if you decide to take two years off to go travelling, you work out the cost of the trip, add on 10% and deposit this amount in your savings plan before you go – there are no excuses on this plan!

I would just like to have a final word about the type of schemes to use in your plan – you never expected to hear this from a financial adviser – but it does not really matter – the emergency plan is a Building society Account – just check rates occasionally to see they are competitive but do not angst about earning the last percentage point – it will only be pennies, the gain in the scheme is the regular savings. The same comment applies to the cash ISA and if you are making any investments just use tracker funds