'Don't join company pension schemes without advice'

BAD DEALS: In her desire to move on and up in the world of advertising, Marcella Speller made all the right moves. Except when planning her pension

Marcella Speller is marketing director of Internet Holiday Rentals, the first company in the UK to specialise in using the Information Superhighway to promote private homes available for self-catering holidays around the world.

After 10 years in advertising Speller took an MBA and has since held senior and board level marketing appointments with blue-chip companies.

She says that her worst mistake has been the cumulative neglect of her pension plans.

"After graduating at the University of East Anglia in 1971 my first job was with British Rail. During your twenties, of course, you don't even think about pensions, and when I left to join an advertising agency in 1974 it was still the last thing on my mind.

"In my twenties and thirties, while working my way up the career ladder, I had a series of jobs, most of which I left within two years as I was headhunted for the next one. There was no such thing as a personal pension in those days. The whole pensions industry was designed for people who started work at 16 and weren't expected to leave the company until they were 65.

"When my generation came along, and moving jobs became a way of life, we discovered that you couldn't take your pension with you. Even worse, if you left the company within two years, you didn't get the benefit of employer's contributions. You were simply refunded for payments you had made during the period of your employment."

Over the years Ms Spellar worked her way up in a variety of different companies, then in 1981 took a year off to do an MBA, before joining Heineken as senior manager of European projects, based in Amsterdam and Ireland.

"In 1984 1 returned to Britain and set up my own business offering consultancy, venture capital and marketing for hi-tech companies. By then I was 34. I took out a self-employed pension, but I had only paid pounds 1800 into it when I was offered a job as senior marketing manager with Avis. The regulations in those days meant I couldn't have continued with my personal pension even if I had wanted to because I wasn't self-employed any more.

"Instead, my contributions were frozen until I reach 60. I don't know whether I can free them under the new legislation because it's all so complicated. There are so many reams of paper, it's as if they don't want you to understand it"

Between 1985 and 1989 Ms Spellar worked for three different companies in senior marketing roles, but each time she was made redundant because of restructuring.

"I wasn't in any of the jobs for as long as two years, so each time they just handed my pension contributions back, mostly without interest and always without employer's contributions. Even so, it wasn't until I was approaching 40 that I thought: 'Hang on a minute, I'm half-way through my career and what pension have I got to show for it?'

"My next job was as sales and marketing director for a company in the travel industry, and once again I was forced to contribute to its pension scheme. This time I resigned due to an intolerable boss. A week later, while I was still working out the notice on my 12-month contract, he fired me for gross misconduct so that he wouldn't have to pay me.

"I took legal action, won my case and got my pension handed back, but still with no employer's contribution, no interest, no nothing. By now I was 42 and I felt really cheated. Pension contributions are meant to be a tax-efficient investment, yet my employers had been taking that money, using it and getting the interest on it themselves.

"I've been working now from 1971 to 1996, and - allowing for a year off to study - that's 24 years during which I should have built up a sizeable pension. After all, I was earning up to pounds 70,000 a year.

"Instead, I lost a lot of money. The rate of inflation between 1976 and 1981 alone was fluctuating between 12 and 18 per cent, so even a return of 5 per cent would have been dishonest. It was daylight robbery and I was furious.

"The trouble is, when you're starting a new job you've got so many things to think about, like the salary, and whether you'll get on with your new boss. It's very difficult to ask what will happen to your contributions if you leave within two years because it wouldn't go down very well.

"Fortunately, one of the first reforms of the Thatcher era was the introduction of portable pensions. It was in recognition of the fact that times have changed: people do get made redundant, companies do get downsized, and if you haven't been there for two years you are in a vulnerable position. lt was 1993 before I finally took out a private pension scheme, and now that I have, no company in the future will be able to force me to contribute to theirs.

"I've never been very good at investing money. I like earning it and spending it on things like houses, but I don't like the uncertainty of putting it where I can't see it. And I don't think I'm alone: even now that so many women are financially independent, we still don't give enough thought to our future security."

Other people, she says, should learn from her mistakes: "The fact is, you have to look after yourself, because nobody else is going to do it. If you are likely to move in less than two years, don't join a company pension scheme without seeing an independent financial adviser first.

"Make sure you take out a pension plan that suits your personal needs, and if you're still in your twenties, don't put it off. Do it now."