Non-contributory pension

hollypoppit

OK, here we go...

For the last three and half years I have had my pension contributions paid (Final Salary scheme).

Recently work announced we would be given the 'option' to carry on with this but via salary sacrifice (why do they call it this, it sounds so negative) or move to a fund manager scheme were I believe the risk of ending up with less pension is greater. Or finally there is also the option of taking the cash in my monthly salary equivalent to that what the company would contribute to the pension.

A couple of questions...firstly are the company moving away from the final salary scheme as it cost them to much money. Secondly, what do people think about the options and finally if I was to take the cash back what are my options i.e. spend it on drink, overpay mortgage or take out my own private pension.

Thanks

dunstonh

firstly are the company moving away from the final salary scheme as it cost them to much money.

Yes. It is effectively an open cheque book which many companies can no longer afford.

Secondly, what do people think about the options

Seem to match the standard options given in these scenarios.

finally if I was to take the cash back what are my options i.e. spend it on drink, overpay mortgage or take out my own private pension.

Its your money and you can blow it how you like. Of course, this is the worst option as you will pay more in NI and tax.

Without figures we cant give advice. Well actually we cant give advice here anyway as its against board rules. However, normally you would go with the final salary option if the scheme is strong enough and the contribution you are making stacks up better than the other options.

EdInvestor

With salary sacrifice you have to watch the effect on your state second pension and annual salary (eg for mortgage borrowing requirements).There's a thread at the top of the forum on it.

How old are you, are you a basic or higher rate taxpayer now and how do you see your future career going - will you likely pay higher rate tax later?