Children might be at the start of their lives, but sometimes it's good for kids to know about where household income goes, and how people look after themselves in old age.
What are pensions?
Pensions are special savings that people build up over their working lives. They usually start saving around the time they get their first proper job. Then, decades later, they use the money when they’re old and less able to work. Those years lived after a working life is called ‘retirement’.
How do pensions work?
Pensions are a good way to save money, because employers and the government often help out. Workers pay into pensions, the company they work often adds some money, and the government helps out, by refunding the tax on the money. They’re good too, because people save money in pensions over long periods of time. This means they can take advantage of compound interest.
Did you know can divide pensions up into three types: state pensions, where the government takes a little bit of money out of workers wages to pay for a small pension in retirement; private pensions, where individuals invest their money with a pension from a bank or another pension provider; and workplace pensions, which are offered by employers.
Stuck for a way to discuss pensions with your kids? Try these talking points
Caesar Augustus created one of the first retirement schemes, about 2000 years ago, when he agreed to pay old soldiers a large amount of money, after they’d served in his army for about two decades. Why do you think he was especially keen to keep soldiers happy?
Though there were ancient traditions of providing for the poor and eldery, the practice of giving everyone in a country a pension at a certain age (a state pension) really began in Germany when the statesman Otto Von Bismarck gave everyone aged over 65 a pension.
In countries such as the UK, the US, Germany and Japan, people are worried about how pensions will be paid for, as there are more and more old people enjoying their pensions, and fewer young people around, in work and making money.
Pensions might mainly be for old people, but younger workers are keen to retire too. In the FIRE (Financial Independence, Retire Early) movement, younger workers save hard, invest cleverly, and cut down their living costs, in an attempt to retire well before the usual ages of 60 or so.
Playing is a great way to aid the understanding of pensions for kids. Why not try some of these learning games?
Some people help grow the amount of money in people’s pensions by investing them in things like property or the stock market. What would you put the money into, if you wanted to see a big return? Apple? Google? The next Paw Patrol film? Get creative!
With some pensions you have to stay where you're living, but with others you can move anywhere. And, in some countries, a pension goes a lot further. Where would you like to go when you’re old? Get an atlas and get planning now!
With some jobs, retiring is a good option, but with others, working late into life can be fun. Why not go through a list of jobs, and work out whether you feel you could do them when you’re older? Firefighter? Teacher? Actor? Judge? Some are suited to old age, and some aren't.
More retirees in the world means more business opportunities catering for older customers. Can you think of a good business plan? A special cab service with an extra-helpful driver? A restaurant serving traditional food? A school where old people can learn new skills? Try to come up with your own.
Children can’t open bank accounts, but they can get used to the idea of having their money with the RoosterMoney app. And they can get started for free. Here’s how.Find out more about RoosterMoney
You kids can also get a pre-paid debit card, a bit like a bank card, via RoosterMoney. It's called The Rooster Card and it's great. You can find out all about it here.Find out more about the Rooster Card
Kids can’t get their wages paid into a bank account just yet, but they can track the money they get paid for chores via the RoosterMoney app. That should teach them about money and work.Find out more about RoosterMoney and chores