Higher salary in exchange for sorting own pension?

Penny-Curator

Hello all,

I'm a long-time reader of these boards but have never posted before. I'm what I call a lapsed money-saver, i.e. I was good at saving in my teens, was careful during university, then did a very expensive Masters and ended back at square 1. I haven't been great at saving/general money matters since I got a full-time job but I made it my New Year's resolution to improve... and so far I'm keeping to it!

I have just been offered a new job with a higher salary :j However one of the downsides is that I would have to sort out all my own pension arrangements. I'm very much a newbie when it comes to pensions so I'm not sure how easy this would be to do.

I recently started paying 5% of my current salary (£22000) into my employers stakeholder pension scheme and they match my contributions with another 5%. Presumably if I moved to the new job (offering £28000) I would need to pay in nearer to 10% of my salary which seems like quite a lot. I'm 25 so I'm not sure if 10% is the right amount to be aiming for? I'm trying to save for a decent house deposit too so I don't want to tie all my money up for when I reach retirement age (probably about 90 by the time I get there!)

Would I be able to transfer my current pension scheme and continue paying into that or would I need to set up something new? While the higher salary is definitely appealing, I'm a bit concerned that with increased monthly pension contributions and higher student loan repayments I might actually not be that much better off...

All advice gratefully received x

Lokolo

You can take your pension from 55 currently (unless the scheme doesn't allow, but I doubt it in this case), so you won't have to wait until you retire at 90

There are plenty of options to save for retirement, Pensions are just one of them.

You should aim to save as much as possible. The more you save, the more you get back at the end.

10% is OK, but it could be higher. You are saving for a house deposit to, well you won't have to save that once you have a house.

You should also think about husband and kids if that may play a part in the near future.

xylophone

You could always consult an IFA about your options - make sure you choose one qualified to give advice about pensions.
http://www.unbiased.co.uk/ifa-qualifications

CLAPTON

as your employer makes no contribution there is no particular advantage in contributing to a pension as such, so I would suggest you save as much as possible for that deposit for a property.

BobQ

Penny-Curator wrote: »

Hello all,

I have just been offered a new job with a higher salary :j However one of the downsides is that I would have to sort out all my own pension arrangements. I'm very much a newbie when it comes to pensions so I'm not sure how easy this would be to do.
x

Being offered a job with a higher salary is one thing. you do not say how much more?

Is the job at a higher level of responsibility or does it involve worse conditions (eg shifts)? That is how much is the increase in salary due to such factors?

When you say you have been offerred a higher salary if you look after your own pension is the extra salary for doing so explicitly defined or is it mixed in with the overall higher salary?

kidmugsy

Take the £28k salary and save like billy-oh in, for example, a Cash ISA. When your new employer is obliged by law to offer you a pension scheme into which he will have to make contributions, then sign up for it. It's coming soon, sooner for large employers than small.