Personal Pension Question

[nutey]

I've got a couple of deferred final salary pensions (one with a bout 3 yrs of contributions and another with 5) and my current defined contribution pension that I've been paying into for about 9 years. I'm getting the maximum employer contributions on my current pension but am aware that I really need to be putting more away each month.

So, my question is whether I can just start up a new pension with Nutmeg for example and make my own contributions or do I need to make additional contributions to my existing pension? Sorry if it's a daft question...

[otherman]

You can, but why would you when you can just pay more into your company one. Simpler for tax, plus if they use salary sacrifice you'll avoid the NI as well.

[55palfers]

Probably no management fee to pay either.

[nutey]

otherman said:

You can, but why would you when you can just pay more into your company one. Simpler for tax, plus if they use salary sacrifice you'll avoid the NI as well.

It wouldn't go through salary sacrifice unfortunately so no benefit there. Was just thinking of a different fund/profile to spread the risk. Not sure if additional payments to the company one would have to go into the same fund or not.

[Dr Mike Oxgreen]

All the employer defined-contribution schemes I’ve seen offer a range of funds that you can choose from, and select the percentage spread for both employer and employee contributions.

The default fund is probably a fairly conservative equity one, but are you sure you don’t have the option to self-select your funds?

[Testaburger]

otherman said:

You can, but why would you when you can just pay more into your company one. Simpler for tax, plus if they use salary sacrifice you'll avoid the NI as well.

Clueless question; If you contribute to a SIPP, would that not reduce your taxable income and thus save on NI also?

[JulianPH]

Hi OP - You can technically have (and contribute to) as many pension schemes as you like. You will only receive tax relief on taxable relevant earnings (capped at £40k a year unless you earn more than £150k).

So you can open a different pension for these contributions or have them put into your workplace scheme.

Charges are import and and your workplace scheme will be auto enrolment qualifying and therefore capped a 0.75% a year. If who ever you chose for your additional contributions charges more than this (and assuming your workplace scheme had a good choice of investment options) you may be better putting the extra money there.

If not, you are free to put it anywhere else you like.

[Testaburger]

JulianPH said:

Hi OP - You can technically have (and contribute to) as many pension schemes as you like. You will only receive tax relief on taxable relevant earnings (capped at £40k a year unless you earn more than £150k).

So you can open a different pension for these contributions or have them put into your workplace scheme.

Charges are import and and your workplace scheme will be auto enrolment qualifying and therefore capped a 0.75% a year. If who ever you chose for your additional contributions charges more than this (and assuming your workplace scheme had a good choice of investment options) you may be better putting the extra money there.

If not, you are free to put it anywhere else you like.

JPH enjoys a twice-baked soufflé, so on that basis alone, I'd be inclined to listen...

[CaptainSlow]

Testaburger said:

otherman said:

You can, but why would you when you can just pay more into your company one. Simpler for tax, plus if they use salary sacrifice you'll avoid the NI as well.

Clueless question; If you contribute to a SIPP, would that not reduce your taxable income and thus save on NI also?

Depends on how they get in there. If you're PAYE and you're paying in from taxed income the NI has already been deducted.

[Testaburger]

CaptainSlow said:

Depends on how they get in there. If you're PAYE and you're paying in from taxed income the NI has already been deducted.

Fair enough, thanks. Just curious, but I don't work in the UK.

So there's no mechanism to claw that NI back, I take it?

[JulianPH]

Testaburger said:

JPH enjoys a twice-baked soufflé, so on that basis alone, I'd be inclined to listen...

That is true

[red_slr]

One thing to consider is what is the company doing with the money. There have been cases over the years of pension funds being in real trouble. I would not want all my eggs in one basket unless there was a very good reason to do so.

[anonymous-user]

red_slr said:

One thing to consider is what is the company doing with the money. There have been cases over the years of pension funds being in real trouble. I would not want all my eggs in one basket unless there was a very good reason to do so.

Steady on! IMO that's not a well-founded comment, particularly in the context of OP's situation.

[JulianPH]

rockin said:

red_slr said:

One thing to consider is what is the company doing with the money. There have been cases over the years of pension funds being in real trouble. I would not want all my eggs in one basket unless there was a very good reason to do so.

Steady on! IMO that's not a well-founded comment, particularly in the context of OP's situation.

I'm with rockin on this. It was defined benefit pension funds that got into trouble when they couldn't meet their commitments. Money purchase pensions of the like the OP is now paying into are completely different and are not run by the company with the company providing no income guarantees.

Chalk and cheese.

[red_slr]

rockin said:

red_slr said:

One thing to consider is what is the company doing with the money. There have been cases over the years of pension funds being in real trouble. I would not want all my eggs in one basket unless there was a very good reason to do so.

Steady on! IMO that's not a well-founded comment, particularly in the context of OP's situation.

Why? How are they investing the money?

[sidicks]

red_slr said:

One thing to consider is what is the company doing with the money. There have been cases over the years of pension funds being in real trouble. I would not want all my eggs in one basket unless there was a very good reason to do so.

That’s nonsense in the OP’s scenario. If you don’t understand DC pensions, why are you offering advice?

Edited by sidicks on Sunday 13th May 13:03

[red_slr]

sidicks said:

red_slr said:

One thing to consider is what is the company doing with the money. There have been cases over the years of pension funds being in real trouble. I would not want all my eggs in one basket unless there was a very good reason to do so.

That’s nonsense in the OP’s scenario. If you don’t understand DC pensions, why are you offering advice?

Edited by sidicks on Sunday 13th May 13:03

So is the OP in full control? Am I missing something?

[CaptainSlow]

red_slr said:

sidicks said:

red_slr said:

One thing to consider is what is the company doing with the money. There have been cases over the years of pension funds being in real trouble. I would not want all my eggs in one basket unless there was a very good reason to do so.

That’s nonsense in the OP’s scenario. If you don’t understand DC pensions, why are you offering advice?

Edited by sidicks on Sunday 13th May 13:03

So is the OP in full control? Am I missing something?

Yes, an understanding of how DC schemes operate.

The funds are handed over to a third party Pension provider...Aegon, Scottish Widows etc. They in turn operate various investment funds. You are able to choose which funds your money is invested in. Mine are currently in a 50/50 UK/Global equity fund.

[red_slr]

Oh right I see.

So, OP what funds have you chosen?

This would probably define your SIPP choices.