Change to my company pension

happiness71_2

Hi can anyone give some advice, the company pension I have is increasing its contributions to make up short fall.The employee has a choice increase by 3% to keep 1/60ths or leave it as it is for 1/80th.I have 30 years left should I increase or invest the 3% into savings,the pension is final salary.

Thank you:

dunstonh

Which one works out best for your circumstances?

exil

Looks like you'll be investing 3% a year for 30 years to earn an extra 12.5% pension when you retire.

I would estimate that investing the same in a private pension would
get you a pension of about 7% of income in 30 years.

So it looks a good deal to me. I suspect that the employer may be matching your 3% - is this the case?

happiness71_2

Thanks the employer is increasing payments to fill in short fall

dunstonh

I will expand my comment. You normally get examples comparing the old and new scheme for people at different ages. How do you fit in with those?

Also, we dont know enough about the scheme to know how big the difference is.

For example, is it 60ths with a deduction made if you take 25% lump sum, is it 80ths with a deduction made if you take 25% lump sum or is it 80ths with no deduction and a 25% lump sum?

An 80ths with lump sum on top with no deduction is little different to a 60ths scheme where you get a deduction when you take the lump sum.

happiness71_2

Thanks for your advice,if I increase the payment by 3% I will get 30 60th's for the 30 years left before I reach 65 if I do not increase this by 3% I will get 30 80ths for the 30 years left,or do I invest the 3% into something else.

Thanks for your time