Stakeholder Pension vs Company Pension Scheme

AstinMatt

Hi

Currently I have a stakeholder pension and company pension scheme. The company will contribute 8% to my company pension if I pay nothing in, but will go up to 12% if I contribute 4%.

I pay an amount in my stakeholder pension as well. Would I better off stopping paying into my stakeholder pension and pay more into my company scheme?

Thanks

Andy_L

Once you contribute the 4% to the company scheme (and get the max employer contribution) the only benefits to using the company scheme compared to the stakeholder is that your company may have negotiated lower charges and/or a better selection of funds than your stakeholder.

However is extra into a pension the best move for you? Have a browse at the pension vs ISA sticky thread at the top of this sub-forum.

HarryD

As Andy implies, going for the extra 4% matched by the employer's 4% sounds on the face of it like a good idea.

Is the employer's scheme a defined contribution or defined benefit scheme? Defined contribution probably these days but maybe you are in a defined benefit (aka final salary) pension scheme? If so that could be a significant factor in your decision making.

16% of salary into a pension scheme is a good contribution. Whether any other savings should go into an ISA or further pension plan would depend upon many things including whether you already have other investments and whether you are a 40% taxpayer.

As always, whether you opt for stakeholder or ISA probably the more important thing is what the stakeholder pension or ISA is invested in.

AstinMatt

Thanks for your comments.

My pension is defined contribution and have been contributing 4% for last 3 years.