Final Salary Pension Scheme

[Deleted User]

Have just recieved a 3% pay rise at work, however the company have decided that this is non contributable to the pension scheme, in effect freezing the pension at current rates. I am 31, have been paying in since 25, earn around 22k, I contribute 8%, the company 5%. I have opted out of serps. What are your thoughts? Do you think I should contribute more, opt back into serps, start another pension (is that possible)? Any feedback welcome. Thanks in advance.

chesky369

I don't quite understand this - a final salary scheme is a percentage (usually a 60th or 80th) of your final salary. Is your company saying that the pension will be based on your salary in 2006, however much longer you pay into it? In that case, it won't then be a final salary scheme will it?

[Deleted User]

Its based on my highest 10 years earnings, so if every pay rise from now on is non pensionable, my highest salary will be as it is now.

dunstonh

is that for every year in future or just this year's increase?

contracting out of S2P is a risk decision that only you can decide. Its legislative risk versus investment risk. There are some pros and cons with both options. At your age, a low cost medium/high risk invested portfolio for the S2P funds has the required potential. A high charge, old fashioned poorly investment portfolio hasnt a hope.