Is a company pension better than my SIPP?

dllive

Hi,

I have a USS pension scheme (this is not a final salary scheme) which an amount automatically gets deducted from my pay packet each month. I also have a SIPP which is invested in some defensive funds.

Someone told me it would be better to make additional voluntary contributions to my company pension rather than my SIPP, because with the company pension scheme Im guaranteed to get a return. Im interested to hear what the knowledgeable folk on this forum think of that.

Thanks

dunstonh

Someone told me it would be better to make additional voluntary contributions to my company pension rather than my SIPP, because with the company pension scheme Im guaranteed to get a return.

AVCs invest into investments. So, the return is variable. Some schemes offer the benefit of extra years you can purchase which do bring an effective guarantee. Although these are not called AVCs. Some of the Govt backed schemes have brought in hybrid options which don't have investment options but buy you blocks of benefit. I havent looked at the USS recently so do not know what they currently offer.

kidmugsy

The USS page on the topic is pretty clear.
http://www.uss.co.uk/SchemeGuide/CareerRevaluedBenefitssection/maximisingyourpension/Pages/default.aspx

By the way, remember that USS is a private scheme not a public scheme. If it gets in trouble members can't expect any sort of privileged rescue; it'll be treated in the same way as any other private scheme in the same boat. And if things ever get so bad that USS is sinking, God knows what that treatment might amount to.

dllive

Thanks v much guys - Ill have a closer look at that link tonight.