potential mis selling of northern rock together mortgage

holly_hobby

saveupthesmiles wrote: »

Oh i see, so a final salary is the same as a defined contibution, and it's still better than private?

No, a Final Salary pension, is defined benefit with undefined contribution eg the employer does not know what it will eventually cost them to pch the reqd annuity (ie pension) on the individuals retirement. Which is preciselly why many employers have now withdrawn from FS arrangements, they are simply too expensive to maintain.

Money purchase or private pensions, are defined contribution, undefined benefit (ie you/the employer, knows what the contributions will be, but don't know just what level of annuity/pension, the invested contributions will eventually provide at retirement.

Occupational pension schemes (inc money purchase) ARE generally more advantageous for the individual given that the employer has to match contributions, AND bares the administrative cost of the scheme and life cover - where as under a private arrangement a portion of the individuals premiums go towards management charges, so 100% is not invested.

Hope this helps

Holly