Workplace Pension
Discussion
Evening, just looking for a sanity check more than anything, now over 40 I've become interested in future financial planning, my dad said to me the first day of work to try and get in the pension scheme, I took his advice and have been in one since I was 16.
I've only had a handful of jobs so a frozen pension form 1 that got froze circa 2002 and one since with a small gap of around 5 years when I needed the money, in my current pot that is a workplace pension I have circa 60K, not a lot I know but have recently increased my contribution to 4% and they put in 8%, is this ok as a workplace pension? not moved jobs for 15 years I'm wandering if that's bad and should be putting that money somewhere else. Its worth noting I get 4x salary life cover with the pension. I'm a 40% tax payer.
Appreciate any thoughts
I've only had a handful of jobs so a frozen pension form 1 that got froze circa 2002 and one since with a small gap of around 5 years when I needed the money, in my current pot that is a workplace pension I have circa 60K, not a lot I know but have recently increased my contribution to 4% and they put in 8%, is this ok as a workplace pension? not moved jobs for 15 years I'm wandering if that's bad and should be putting that money somewhere else. Its worth noting I get 4x salary life cover with the pension. I'm a 40% tax payer.
Appreciate any thoughts
Good that you've made a start there.
As a "rule of thumb", MSE Martin Lewis recommends putting in half your age in % terms, so I'd recommend you up your contributions a bit (if you can, of course!) - I think your future self would thank you.
As a high rate tax payer, you're getting more going in which is good, & your company may use "salary sacrifice" which makes it easier to administer. The fact it is a pension just makes it a tax efficient wrapper - the best place for long term investments!
You can always put some into ISAs - they can help bridge the gap if you get a desire to retire 'early', but you are paying tax on the income you pay in first...
Again, like the pension, the ISA is a tax efficient wrapper - question is - where is it invested?
Some company schemes have a choice of funds, perhaps worth looking at that a bit.
You can always post on the sponsored IM sticky thread too - they have some decent fund options and can give you guidance with zero obligation!
As a "rule of thumb", MSE Martin Lewis recommends putting in half your age in % terms, so I'd recommend you up your contributions a bit (if you can, of course!) - I think your future self would thank you.
As a high rate tax payer, you're getting more going in which is good, & your company may use "salary sacrifice" which makes it easier to administer. The fact it is a pension just makes it a tax efficient wrapper - the best place for long term investments!
You can always put some into ISAs - they can help bridge the gap if you get a desire to retire 'early', but you are paying tax on the income you pay in first...
Again, like the pension, the ISA is a tax efficient wrapper - question is - where is it invested?
Some company schemes have a choice of funds, perhaps worth looking at that a bit.
You can always post on the sponsored IM sticky thread too - they have some decent fund options and can give you guidance with zero obligation!
mikeiow said:
As a "rule of thumb", MSE Martin Lewis recommends putting in half your age in % terms, so I'd recommend you up your contributions a bit (if you can, of course!) - I think your future self would thank you.
Not quite... the actual advice is - Take the age you start your pension and halve it. Then put this % of your pre-tax salary into your pension each year until you retire.The key point is start.... clearly more is better, but the earlier you start, the greater the benefit.
Carbon Sasquatch said:
mikeiow said:
As a "rule of thumb", MSE Martin Lewis recommends putting in half your age in % terms, so I'd recommend you up your contributions a bit (if you can, of course!) - I think your future self would thank you.
Not quite... the actual advice is - Take the age you start your pension and halve it. Then put this % of your pre-tax salary into your pension each year until you retire.The key point is start.... clearly more is better, but the earlier you start, the greater the benefit.
Source for OP: https://www.moneysavingexpert.com/savings/discount...
mikeiow said:
Blimey....think I’ve read that wrong for a long time: thanks!
Source for OP: https://www.moneysavingexpert.com/savings/discount...
You've done yourself a huge favour if you've kept up !Source for OP: https://www.moneysavingexpert.com/savings/discount...
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