Alternative to Auro-Enrollment Pension
Discussion
My girlfriend, at age 27, has just moved to an employer that only contributes the minimum to a pension under auto-enrollment. She's within her first month, so could opt out. Based on her current £39k salary, they'd only be putting in 1%, so £32/month as I understand it.
In this situation, what's the general view - put in a more typical 5% and suck it up that there's minimal employer contribution, or do something else? Obviously if she puts (say c.6-7%) into a savings account it will be coming out of her net income, so she'll lose 20-odd%.
In this situation, what's the general view - put in a more typical 5% and suck it up that there's minimal employer contribution, or do something else? Obviously if she puts (say c.6-7%) into a savings account it will be coming out of her net income, so she'll lose 20-odd%.
I'm in a very similar situation, I'm 30 on 37k, worked for my employer for 5 years, they only started the pension scheme July last year (new startup) with a 1% contribution, this goes up 1% each year.
I would like to retire / travel / go part time when I'm 48 (when my youngest son turns 18).
My plan has been to save heavily into a S/S ISA ,using Vanguards Life Strategy at the moment and Cash, whilst overpaying the mortgage so it's paid off when I turn 48 allowing me to either reduce costs, sell or rent out; depending on what I want to do.
But this decision is based mostly on the fact I do no want to wait till I'm nearly 70 or later to get my money.
I would like to retire / travel / go part time when I'm 48 (when my youngest son turns 18).
My plan has been to save heavily into a S/S ISA ,using Vanguards Life Strategy at the moment and Cash, whilst overpaying the mortgage so it's paid off when I turn 48 allowing me to either reduce costs, sell or rent out; depending on what I want to do.
But this decision is based mostly on the fact I do no want to wait till I'm nearly 70 or later to get my money.
Take the auto-enrollment - it's free money, and the size of the compulsory contribution will rise soon anyway.
After that, as she's under 40, look hard at a S&S LISA to get the 25% bonus, which effectively matches the tax rebate on a pension if you're a basic rate taxpayer. If she's a higher rate payer, or want to save more then a SIPP is the obvious approach.
If she's looking to retire before ~60, then put enough into an ISA that she can bridge the gap between retirement and LISA/Pension access.
After that, as she's under 40, look hard at a S&S LISA to get the 25% bonus, which effectively matches the tax rebate on a pension if you're a basic rate taxpayer. If she's a higher rate payer, or want to save more then a SIPP is the obvious approach.
If she's looking to retire before ~60, then put enough into an ISA that she can bridge the gap between retirement and LISA/Pension access.
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