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Some advice please?

Hi I was wondering if I can get some advice?

I'm currently working on a temp contract that ends at the end of jan 2014. I'm being offered the NEST pension through the agency with 1% from them and 1-5% from me. I am unsure yet if my temp contract will be extended or if I will get taken on permanently by the company I am working at.

I'm 28 and earning about £19,500 pre-tax. My question is should I take the NEST pension, and how much should I put in? What happens if I get made permanent in Feb and get the company pension? Will the money paid into NEST be wasted? And the same if my temp contract is extended before becoming permanent? Should I just wait (maybe upto 6 months) until I am permanent and take the company pension?

Thanks for any advice people can offer me

Zara

Comments

  • jamesd
    jamesd Posts: 26,103 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    NEST is probably the worst of the auto-enrolment pensions. If you must use it, pay in only enough to get the employer match and no more. Anything else you want to put into a pension is best put into a different pension.

    However, in your case the value is so low between now and February that it's probably best to opt out until you find out what happens. Otherwise you'll end up with a tiny pension pot in NEST that you can't do anything useful with, too low to even transfer anywhere else, not that NEST allows you to do that anyway, unlike normal schemes.
  • zaralocke wrote: »
    My question is should I take the NEST pension, and how much should I put in? What happens if I get made permanent in Feb and get the company pension? Will the money paid into NEST be wasted? And the same if my temp contract is extended before becoming permanent? Should I just wait (maybe upto 6 months) until I am permanent and take the company pension?

    All things being equal, take the NEST pension now, pay in the 1% to get an instant 100% return on your money from the employer's 1% contrib (in fact, you'll only pay in 0.8%, because of tax relief, but let's not go there). Always look favourably on subsidized savings.

    The money paid into NEST won't be wasted, it remains yours, and won't disappear. Worry about amalgamation later; always take the good deals when offered.

    If you're 28, you should be saving a heck of a lot more than 1%+1% of your income, in any case. Remember, it's usually far cheaper to save/invest early, because of the roll-up (compounding) of investment returns.
    zaralocke wrote: »
    I am unsure yet if my temp contract will be extended or if I will get taken on permanently by the company I am working at.

    Right, so let's not count on it, eh? You might be temping for the next 25 years. No-one knows.

    Warmest regards,
    FA
    Thus the old Gentleman ended his Harangue. The People heard it, and approved the Doctrine, and immediately practised the Contrary, just as if it had been a common Sermon; for the Vendue opened ...
    THE WAY TO WEALTH, Benjamin Franklin, 1758 AD
  • mania112
    mania112 Posts: 1,981 Forumite
    Part of the Furniture Combo Breaker
    jamesd wrote: »
    NEST is probably the worst of the auto-enrolment pensions.

    I agree, what are your thoughts on the best? I've heard others mention Scottish Life?
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