So confused about employer Standard life pension

missma

Hi all!

I am feeling very confused about the pension my employer offers. I am almost thirty with no pension. (please don't all shout at once) I had a bad experience where a previous employer was supposed to be paying into Scottish Widows and they never had it set up, I got the money back from them. I currently earn about £25000 per year.

The pension my current employer offers is a Standard Life Pension they recommend balanced lifestyle profile. My employer pays in 4% and I pay in 4% or over. Should I pay in more. The company has sent me reems of information too much to ever take in. I am also confused they have based it on retiring at 65 do i need to change this.

Let me know if u need more info

Ta all for your help

EdInvestor

missma wrote: »

I am feeling very confused about the pension my employer offers. I am almost thirty with no pension.

Not quite right.You have 2 state pensions.:) Get a forecast of how much they are worth here:

https://www.thepensionservice.gov.uk

My employer pays in 4% and I pay in 4% or over. Should I pay in more.

No.Invest additional money in a stocks and shares ISA.

They have based it on retiring at 65 do i need to change this.

For maximum flexibility, better to choose the retirement age as the minimum allowed by law, ie 55. It's not so important these days, but you never know.

dunstonh

My employer pays in 4% and I pay in 4% or over. Should I pay in more.

You say you havent got a pension so I assume this is what you are now being offered. 8% is a good contribution for someone in their 20s but you have some catching up to do. One of those rough guide phrases is that you should aim to have £35k in your retirement pot by age 35. You are not going to do that but you still have until age 67 before you retire. That gives you 32 years to catch up.

I am also confused they have based it on retiring at 65 do i need to change this.

A lot of companies and individuals arent aware that the state retirement age has gone up. What is says on paper doesnt matter as its not cast in stone.

Whilst Ed suggests you pay more into a stocks and shares ISA, I would just be wary of that. If you are getting confused with a simple stakeholder pension, then trying to go fine tuning your investment portfolio with mutliple providers, tax wrappers and investment funds may be too much for you to do by yourself.

EdInvestor

If you find the ISA confusing, start out with a cash ISA.You can convert it later.

It's likely you are clocking up quite a decent state pension, so for tax reasons, it's more sensible to put extra savings in an ISA.Pension income is taxed when you receive it, with an ISA, it's not.

So it's good to keep pension income below 10k in your case, which is the old age tax allowance.That means your pensions will be tax free, and the rest of your income will be tax free from the ISA.

waltzer

Dunstonh and EdInv...like my previous situation her contributions will be put into WP fund + one other (possibly Stock Exchange or Managed fund). Any helpful comment re this?

missma

Thanks all for your help! Am a bit wary off an ISA based on stocks and shares in the current climate although I realise I should look at this longer term. A family member who has money invested not sure what exactly in has just been forecast to lose 12000. I have used a cash ISA in past. Does anyone know who offers best rates on these at mo.

Does it matter what age I put down to retire I thought the company could hold u too it.

Another 37 years in my job I definitly need a career change lol

This pension form has two options for investment choice balanced lifestyle profile or specified investment funds. I take it the first is safest option.

missma

Ed how do I have two state pensions. Have applied for code for forecast. Thought everyone had one, will there even be such a thing by time I'm that age?

Thanks Again

jem16

missma wrote: »

Ed how do I have two state pensions. Have applied for code for forecast. Thought everyone had one, will there even be such a thing by time I'm that age?

Thanks Again

Everyone who has made enough contributions is entitled to the basic state pension. There is also the state 2nd pension (originally known as SERPS) which you can be contracted out of so not everyone gets it from the state. Those who are contracted out have it paid into a personal or company pension.

A pension forecast will tell you how much you have.

missma

Thanks Jem,
I sent away to get stuff to look into that, why do some ppl get and some don't?

jem16

missma wrote: »

Thanks Jem,
I sent away to get stuff to look into that, why do some ppl get and some don't?

Everybody who contributes 30 years NI (from 21010)gets. Everybody who did not contract out gets the 2nd state pension as well. Those who did contract out get it paid into their personal pension.