Chaining employer in 3-6 months, is it worth starting a pension now?

thesaver79

Hi,

I have the opportunity of starting to contribute to a private pension through work for a total of 15%, 7.5% of which would come from my employer.

I have no other private pension.

The point is that I know I won't stay with this employer for long, probably another 3-6 months maximum. After that I'll either have a career break or start contracting.

What would you do? I know I haven't given any info about my financial situation, but I just wonder whether it'll be worth locking the cash away right now if in a few months I'll probably have to switch provider if I am with a different employer or look into something else if self employed.

Thanks

mania112

Yes you should because it's free money from your employer.

thesaver79

mania112 wrote: »

Yes you should because it's free money from your employer.

Thank you mania112, this is definitely a valid point. However, this money will be unaccessible until I'm 55. So depending on my choices after this employment, I may end with a thousand pounds locked into a pension scheme for more than 20 years...

Moby_Tide

thesaver79 wrote: »

Thank you mania112, this is definitely a valid point. However, this money will be unaccessible until I'm 55. So depending on my choices after this employment, I may end with a thousand pounds locked into a pension scheme for more than 20 years...

Talk me through the downsides? Either you're going to have someone elses £1k locked in it for the 20 years also, or you'll have c.£750 in your bank account. If you need the £750 short term then you know you shouldn't start but even £2k in a pension for 20 years will be worth more in almost all cases (unless you buy £750 of lottery tickets and hit the jackpot)

jamesd

Do you have any desire to retire someday? You'll need to do something about it eventually and getting that 7.5% extra will be useful. Lots of people end up staying in a job longer than they think. You can transfer pension pots between employers or to one of your own independent of any employer.

xylophone

So depending on my choices after this employment, I may end with a thousand pounds locked into a pension scheme for more than 20 years...

Presumably you will be making provision for your retirement after you leave this company? Pension transfer?

Thrugelmir

thesaver79 wrote: »

After that I'll either have a career break or start contracting.

So no pension or you'll need to fund your own.

Make hay while the sun shines as the saying goes.

Your next employer may not offer such a generous contribution. Money is money in whatever form you receive it.

thesaver79

Thank you for your replies.

The extra bit of complication that I haven't included is that there is also a chance I may relocate to another country or countries at some point of my life. I imagine I could still decide to fund a UK based private pension while working abroad (with the risks involved in currency exchange), but could I move my pension to another EU provider?

If I only funded this pension for 3 months, and then never again in my life, when it's time to retire, what will happen?

xylophone

there is also a chance I may relocate to another country or countries at some point of my life

There is an awful lot of "if and or but" going on here. For the moment you are here and working for this company.

Your plans seem so fluid that you could find yourself working for this company for longer than you expect?

Why not just deal with the here and now?

thesaver79

xylophone wrote: »

Why not just deal with the here and now?

Fair point. I'm primarily worrying of "loosing" the money depending on future choices.

thesaver79

One more question. Do you think that they could stop giving their contribution of 7.5% while I'd be serving the notice period?