To start again or leave for now

Fliss_M

I came back from mat leave in Nov. While on leave I suspended my pension payments. This consists of 5% of my wage and the company adds 8%. I returned in Nov. I have had my statement, and obviously the fund has gone down due to the down turn.

Should I start up the payments again? Or wait till the financial market picks up so am not just paying money into an account that will disapear in the coming months.

dunstonh

Should I start up the payments again? Or wait till the financial market picks up

what you are saying is that should you give up 12% for a net cost of 4%. That means for £120 of contribution , its only costing you £40.

You are also saying should you not take this mostly free money to buy units cheap and and then wait until they go back up so I can start buying them more expensively later.

Fliss_M

Well I did think along these lines, but I wanted to check. Plus I have little idea how pensions work. Just that with the shares drop, it drops (even if it will be 40-45 years before I draw on it CRIKEY!)

So I guess your answer is start em up again? ;-)

Debt_Free_Chick

Nothing to do with your original question, but I assume that your employer continued their contributions for any period of leave when you were paid, even if "pay" was just SMP. Your employer has a statutory duty to continue to pay the full contributions i.e. 8% of your normal salary, even if you're just getting SMP.

No requirement to contribute for any unpaid Mat leave, though.

Fliss_M

But do they have to pay if I stop?

Debt_Free_Chick

Fliss_M wrote: »

But do they have to pay if I stop?

I assume you had the option not to contribute and if so, then the employer's contributions must continue and must be based on the salary you would get if you were at work, normally. If you had paid contributions, yours would have based on the pay you actually received.

Did you simply choose to suspend your own contributions? You didn't completely opt out of the scheme, did you?

Fliss_M

oh no, I just suspended. certainly didnt opt out. my thinking was to keep suspended till my credit card is paid as with current risk of any job going in this climate, I thought mayb, thats was more important, but, will an extra £65 per month make that much difference to this figure?

Debt_Free_Chick

Fliss_M wrote: »

oh no, I just suspended. certainly didnt opt out. my thinking was to keep suspended till my credit card is paid as with current risk of any job going in this climate, I thought mayb, thats was more important, but, will an extra £65 per month make that much difference to this figure?

Your employer should have maintained its contributions at the full rate whilst you were on paid maternity leave, providing that your contributions were not compulsory. Your employer should have treated you as if you were "at work" whilst you were on paid maternity leave (they do not have to contribute if leave is unpaid).

As for restarting your own contributions, as others have said, the investment units those contributions would buy now are cheaper than they were a year ago

Fliss_M

Brilliant thanks.