Planning for Retirement

[Sharkhouse]

That does seem foolish as you're missing the employers contributions.

I pay into my work one, and then transfer a balance out to my SIPP when it reaches a certain level as like you i prefer to keep a closer eye on it.

I'm so new to this but no-one's been able to explain what I should do instead as a better option. Reading through different websites seems to help but not as much as I'd like.

Would it then be wise to contribute to the pension monthly, receive the employers contribution and then next month take it back out into the SIPP?

 

[dlockers]

I'm so new to this but no-one's been able to explain what I should do instead as a better option. Reading through different websites seems to help but not as much as I'd like.

Would it then be wise to contribute to the pension monthly, receive the employers contribution and then next month take it back out into the SIPP?

How savvy do you think employers pension management firm is?

What are your employers contribution?

 

[Martynt74]

I'm so new to this but no-one's been able to explain what I should do instead as a better option. Reading through different websites seems to help but not as much as I'd like.

Would it then be wise to contribute to the pension monthly, receive the employers contribution and then next month take it back out into the SIPP?

It's probably a lot of effort to do it on a monthly basis, i'd do it annually or when it reaches a certain balance.

How come you have such little faith in your workplace pension to not want to use it? Are you really getting such better performance elsewhere?

 

[Uther]

Must say that i get jealous of some employer contributions in this thread. I get 5%

Same but it's still free money.

 

[Biz.Kid09]

My employer does 9%, I do 10% via salary sacrifice. Only been in work for 4 years since Uni though so still early days. I would like to up that figure to maybe 15%. Depends how future salary increases etc go.

 

[Sharkhouse]

How savvy do you think employers pension management firm is?

What are your employers contribution?

average, it's a Defined Benefit Pension Plan so about as basic as you can get from my understanding.
Employer contributes 5%.
I'm also not keen that it's locked away til 65 unless I 'purchase Buy out' but maybe I'm just out of touch.

 

[dlockers]

How old are you? It could be you benefit from proper advice. Someone to do the maths on 5% top up versus buy out.

Edit: To the people jealous of others employee contributions, don't take it at face value. It generally rises with age.

 

[SaBBz]

Must say that i get jealous of some employer contributions in this thread. I get 5%

It’s one of the few benefits of working for financial institutions - they all have pretty good pension schemes. Nationwide put in 16% if you put in 7%, Lloyds is 15% if you put in 6% etc.

 

[Martynt74]

average, it's a Defined Benefit Pension Plan so about as basic as you can get from my understanding.
Employer contributes 5%.
I'm also not keen that it's locked away til 65 unless I 'purchase Buy out' but maybe I'm just out of touch.

That sounds like a defined contribution scheme to me.

It's locked away in your SIPP too (at least without hefty penalties). I would assume the withdrawl criteria would be the same with your workplace one.

As above, it may be worthwhile getting some specific advice.

 

[Sharkhouse]

How old are you? It could be you benefit from proper advice. Someone to do the maths on 5% top up versus buy out.

Edit: To the people jealous of others employee contributions, don't take it at face value. It generally rises with age.

That sounds like a defined contribution scheme to me.

It's locked away in your SIPP too (at least without hefty penalties). I would assume the withdrawl criteria would be the same with your workplace one.

As above, it may be worthwhile getting some specific advice.

I'm 27 but feel like I'm 15 again with all this finance stuff haha.
Thank you very much gentlemen. You've been really helpful.

 

[burtie]

I have absolutely nothing for retirement, looks like it's beans and rice and working till I drop.

 

[fobose]

@Sharkhouse do you know what your employer contributes if you pay in? As others have said you might be missing out on a lot of free money!

My employer pays 10.5% if I pay in 4.5% on my current contract which seems very well worth it to me. It's an aviva scheme which I don't think I can transfer the money out of but I can chose what its being invested in. I've left it for now as it's done well over the last 4 or so years.

 

[dlockers]

I'm 27 but feel like I'm 15 again with all this finance stuff haha.
Thank you very much gentlemen. You've been really helpful.

I'm no expert but I'd say you are missing a trick by not claiming your employers 5% contribution. The more you can get in there, the more it'll compound. 5% contributions sounds about right given your age.

Edit: This is mine. Small number is employee contribution, big number is employer contribution.

Age Band Employee % Rate
Employer % Rate

Under age 32 1.5% 5%
32 - 33 2% 6%
34 3% 8%
35 - 37 4% 10%
38 - 39 4.5% 11%
40 - 49 5% 12%
50 and over 6% 14%

Edit: And final thing @Sharkhouse, your current retirement age projection likely doesn't include salary increases from promotion etc.

 

[Admiral Huddy]

I was all set for retiring at 60

Out of the window now - ex- wife will get her claws on it.

 

[ChrisD.]

I'm 37, I have a 12 year index linked Army pension that I'm going to leave alone. I also have a salary sacrifice pension and I pay in 7% and my employer pays in 10%, however I think I may up my own contribution to 10% because of the tax relief.

 

[dlockers]

I was all set for retiring at 60

Out of the window now - ex- wife will get her claws on it.

Retire miserable at 50, retire happy and broke at 60. Know what I'd chose

 

[Irish_Tom]

I'm currently using salary sacrifice to pay 14.4% of my salary into a SIPP without any employer contributions. Now that my student loan is paid off I'm thinking of increasing that to 15%.

My employer does offer a workplace pension through The People Pension but the employer contribution is only 1% and the rate of return for TPP was lower than the industry average, so I thought I was better off opting out and doing my own thing.

 

[Basher]

I currently sacrifice 5% of my salary into my pension - and my employer adds another 7%. On top of that I put 10% of my monthly take-home into the companies stock (at a discount) then another 20%-30% into mutual funds. The aim is to pay the mortgage off in the next 5 years then pump the saved-cash into pension/investments.

 

[krooton]

If everything stays the same in terms of salary, contributions and no growth of pension investments, I'd be looking at £325k pension, which is ok I guess. Depends how long I plan to live.

 

[shaf]

I've invested in property last 20 years or so. Never had a pension and never contributed to one. Now have 5+ properties and no mortgage. Looking at retiring soon.