Got employer contributions of £800 is it worth bothering with?

oliverp_2

Hi all,

I recently left a company and while I was there I did not contribute to any pension scheme however the employer contributions totalled about £800 (I only worked there a year).

They have now written to me saying that if I don't nominate another pension scheme then I lose that £800. I don't have another pension and I can't join my new employers pension for a year.

Is it worth doing anything with this £800, it is just employer contributions so hasn't cost me anything...

Thanks

LongTermLurker

Is it worth doing anything with this £800, it is just employer contributions so hasn't cost me anything...

I think you've answered your own question there. It's £800 free cash.

If you can't join your new scheme for a year, what do you intend doing in the meantime? Paying into a personal pension for a year with an £800 addition seems a good idea to me. When you join your company scheme, you can either continue with your existing one or make it paid up.

vbm

Nah its only £800, probably not worth your time to do anything about. I mean it may only take you an hour or so to sort it out, and I am sure you make more than £800 an hour in your current job. Is it worth giving up your free time for that ?

I say give it back to your old employer out of apathy / laziness.

oliverp_2

Thanks for the answers...hope I didn't get your backs up, I didn't mean to come across as though £800 was nothing.

However it's just employer contributions, they won't let me have it as a cash figure, is any pension provider going to be interested in that business as I don't intend paying anything else into it?

I'll join my current employers pension scheme in a years time when I'm eligible.

LongTermLurker

I agree £800 isn't much on its own, but it has growth potential and will boost your overall pention pot. However, your problem is that I doubt pension providers will let you transfer in just £800 without contributing as well because it would immediately make it paid up, meaning they would know they wouldn't get any more contributions.

I still think you ought to start contributing now and use this £800 as a prod - why wait a year until you can join your company scheme? If you intend to pay in £100 gross then, why not do so now and by the time you're eligible you will have paid £960 (net) for a pot worth £2000 (and hopefully growing). You can always make it paid up then and just continue with your company scheme.

Even if you only paid in £50pm your £1400 pot would only cost you £480 - it's got to be worth doing?