should i put more into my company pension.

penpon

hello all, just wondering if i should put more money into my pension at work, the company shut their final salary scheme in 2010, and provided us with another scheme, i had 25 yrs in the final salary scheme, the firm contribute 9% and me 7%, into the new scheme, i am thinking of increasing my contribution too 11% as i have enough spare cash, any comments as to am i doing the right thing would be appreciated.

kidmugsy

The big advantage of a pension is the employer's contribution: if you have already maximised that, then pension contributions might still be attractive if (i) you can use salary sacrifice, or (ii) if they let you avoid higher rate income tax or (iii) if they let you avoid loss of child benefit. If none of these apply then you might like to consider alternatives. For instance, do you have a spouse who would gain from making larger pension contributions e.g. because she might draw her pension free of income tax?

atush

I would probably add more, but only if I had filled my isa allowances, and had a cash emergency buffer.

penpon

kidmugsy wrote: »

The big advantage of a pension is the employer's contribution: if you have already maximised that, then pension contributions might still be attractive if (i) you can use salary sacrifice, or (ii) if they let you avoid higher rate income tax or (iii) if they let you avoid loss of child benefit. If none of these apply then you might like to consider alternatives. For instance, do you have a spouse who would gain from making larger pension contributions e.g. because she might draw her pension free of income tax?

hi, yes 9% is the companies maximum , i currently dont use the salary sacrifice option for other reasons, but i am thinking of taking it up, why is salary sacrifice an option in your eye, cheers both for your replies, i do have isa,s .

zagfles

penpon wrote: »

hi, yes 9% is the companies maximum , i currently dont use the salary sacrifice option for other reasons, but i am thinking of taking it up, why is salary sacrifice an option in your eye, cheers both for your replies, i do have isa,s .

Salary sacrifice is better because you save NI as well as tax, if you're a basic rate taxpayer you'd get 32% tax/NI relief and probably only pay 15% tax when you draw the pension, so that's a big gain.