Looking for some basic pension advice

TrickyDicky

I have just started working for a new employer. They do have a pension scheme, but the employer puts no contributions towards it until I have 5 years service, where they will pay 5% on top of what I put in.

Are there any benefits to being in an employers scheme rather than a private one? I dont know whether I will actually be here in 5 years as we are planning our second child, and after my wife's maternity it would probably work out best financially if I just stopped working to be a stay at home dad.

Linton

There may be non-pension benefits linked to being in the scheme such as death in service payment. Also an employers scheme could have lower fees than you could get as an individual.

DiggerUK

TrickyDicky wrote: »

..........Are there any benefits to being in an employers scheme rather than a private one?.........

If it is a final salary, or defined benefits scheme, then you should be alright. Few and far between today, and even they are questionable in the current economic climate.

As to a private scheme; what savings or investment plan do you know of, that asks you to hand over 100% of what you put in now, and never get anything from it until you are 55.
At 55 they then make you hand over 75% of your pension pot, to fund your retirement in ways that are not very good now, to schemes that haven't even been invented yet.

Put by for your old age by all means, but keep control of your retirement pot yourself. Finance is not rocket science, you'll pick it up.
..._

TrickyDicky

Linton wrote: »

There may be non-pension benefits linked to being in the scheme such as death in service payment. Also an employers scheme could have lower fees than you could get as an individual.

There is a 2x death in service, but afaik its not linked to the pension.

If I went for a private pension, can it still derrive the NI and tax credit benefits that would be done if it was through the employer?

And no, its not a final salary or DB pension. Had that at my old place and have 4/60ths to look forward to in 35 years time! :S

Linton

TrickyDicky wrote: »

There is a 2x death in service, but afaik its not linked to the pension.

If I went for a private pension, can it still derrive the NI and tax credit benefits that would be done if it was through the employer?

And no, its not a final salary or DB pension. Had that at my old place and have 4/60ths to look forward to in 35 years time! :S

You only get NI benefits if you are in a salary sacrifice scheme whereby you voluntarily reduce your salary and the employer gives your pension the money saved as an employer contribution. It is unlikely that your employer would pay into a private pension on that basis.

The tax benefits are the same for employer and private pensions.

atush

Take into acct the recent pension changes where employers are now required to contribute (so can't wait 5 years). If it will start for you this year or later, will depend on the size of the company.

TrickyDicky

Having checked, my company wont be forced into auto enrollment until 2015.

atush

So, for two years you can contribute into a PP.

Did you check of DIS is tied to the pension, or seperate?

BLB53

QUOTE]Having checked, my company wont be forced into auto enrollment until 2015.[/QUOTE]

Only 2 yrs off, and then your employer will need to contribute 3%.