Is it worth getting my work pension scheme if I don't plan on staying there for long?

snowqueen555 · 10 July 2010 at 10:56PM

I don't see myself staying for long at my current job because I don't like it, but they have a pension scheme (which I missed out on as they only accept applications at certain times, or someone even said I'd have to wait until 2012!)

Options are

I pay 2% they pay 8% (of salary)

or

I pay 4% and they pay 10% (of salary)

Is it worth investigating whether I can get one with them as even though my wage is low and I won't be there for the long term, the employee contribution seems very good.

So thats another question.. How does a person who doesn't have a stable long term job start investing for their pension? I am 24 and have no money to my name. I have started thinking a lot about starting to save now

Thanks

blackste · 11 July 2010 at 7:35AM

Snowqueen.

You can not start saving into a pension too soon. If you start saving at 25, you will likely have 40% more in your pension fund than if you start at 35.

Regarding your company pension. If you are planning to move in within 2 years of starting to save into your company pension, you will get your contributions back, less tax. If you join the scheme, stay in it for more than 2 years, and then move, you have 2 options. You can either freeze the pension, or transfer it to your new pension scheme, with your new employers pension scheme.

If it were me, i would start paying in to the current scheme, as you have nothing to lose, but will gain the contributions that your current employer will make. Also you will save some tax, which is always nice.

Hope this helps.

dasherman · 11 July 2010 at 8:22AM

snowqueen555 wrote: »

I don't see myself staying for long at my current job

I said that when I started my job and 23 years later I'm still there.

I pay 2% they pay 8% (of salary)
or
I pay 4% and they pay 10% (of salary)

In todays pension enviroment they're pretty good percentages,if you don't join you're refusing free money.

So thats another question.. How does a person who doesn't have a stable long term job start investing for their pension?

You join every company pension scheme that's available to you. Not many people these days stay in the same job all their working lives,so lots of people have pensions dotted all over the place. Infact the impending introduction of Personal Accounts/NEST are designed for people just like you.

It's good that you're thinking about your financial future at your age but the worst thing you can do is do nothing.

Andy_L · 11 July 2010 at 9:45AM

blackste wrote: »

Regarding your company pension. If you are planning to move in within 2 years of starting to save into your company pension, you will get your contributions back, less tax.

With the quoted contributions this looks like a money purchase scheme in which case its unlikely you can get your contributions back if you leave early.

Oldernotwiser · 11 July 2010 at 9:47AM

You may find that there's life insurance included, which can be worth having as well.

Andy_L · 11 July 2010 at 9:47AM

snowqueen555 wrote: »

So thats another question.. How does a person who doesn't have a stable long term job start investing for their pension? I am 24 and have no money to my name. I have started thinking a lot about starting to save now

As Dasherman says you join any company pension that offers an employers contribution and use a private pension and/or ISA when working for those that don't

snowqueen555 · 11 July 2010 at 11:18AM

Thanks for the info, I have a bad feeling they have stopped the pension scheme until 2012, which is when the government rolls out that new pension legislation or something.

I'll ask about it at work tomorrow!

snowqueen555 · 11 July 2010 at 11:28AM

Andy_L wrote: »

With the quoted contributions this looks like a money purchase scheme in which case its unlikely you can get your contributions back if you leave early.

Hi, the information pack says I can transfer, as long as I don't "take any benefits", I'm not sure what that means.

I have the forms and everything but they were given to me when I first started, I wasn't told of a deadline.

Are employers able to block their pension schemes as I thought it was a legal requirement for them to offer one at all times (or is that wishful thinking?)

dunstonh · 11 July 2010 at 11:52AM

Hi, the information pack says I can transfer, as long as I don't "take any benefits", I'm not sure what that means.

If you commence the pension (i.e. at retirement) then you cant transfer it (technically pension rules allow it if the provider wants to do it but not many do).

Are employers able to block their pension schemes as I thought it was a legal requirement for them to offer one at all times (or is that wishful thinking?)

There is no legal requirement for an employer to offer a pension scheme at this time. There used to be a rule that where 5 employees or more existed, the provider had to offer a scheme where you could pay in via your payslip. However, the vast majority of these just existed on paper and were never used (hollow schemes). Under current rules, there is no requirement for an employer to pay into a pension. The NEST scheme is under threat of cancellation or deferment with changes made.

Is it worth getting my work pension scheme if I don't plan on staying there for long?

Comments

Confirm your email address to Create Threads and Reply

🚀 Getting Started

Categories

Is this how you want to be seen?

Get our FREE Weekly email full of deals & guides - and it’s spam-free