Pension needed

maccalike7

Basically, i am currently employed by a company that does part-contributional pensions, so they double whatever i put in. however, i may be leaving soon for a job wiht no pension plan set up at all. now this is a concern not only for me, but for my girlfriend who is not happy at the prospect of having to fund me in retirement, as she is a goverment worker, so is promised a good pension.

What im after is a pension plan or saving plan, whatever really, just as long as i can show her that me changing jobs, wont be such a big issue when it comes to later in life..

dunstonh

go with the employer's pension. It is the obvious choice.

maccalike7

sorry, i may have worded that incorrectly, what i mean is i'm thinking about leaving, so i wont be able to take the pension with me and i wanted to know what my options would be if i did leave, like whats a good pension/saving sceme that you can set up yourself?

dunstonh

Many people think about leaving their work but never do.

Why can you not take your pension with you? Is it a type you cannot?
Why should you need to take it with you? Is it money purchase or final salary based?

whats a good pension/saving sceme that you can set up yourself?

None of them will be as good as your employer's purely on the basis that they will not be able to match the free money from the employer.

maccalike7

well as i said it is a part-contribution pension, so its with the company, if i leave it will stop...to be honest i have only had it for about 6 months, so its not going to be an amazing amount anyway...

i have actually had a job offer that i am really interested in, however it doesnt have the benifits (pension, bupa) that this job does, but better salary and a car. so i want to try and use the extra money to make myself a pension....it's the only way my mrs will let me leave the stability of my current job, which bores me silly!

dunstonh

pensions are transferrable and many are able to do that at zero cost. So, even if the amount is small, its still more than the alternatives. It really depends on the type of pension they offer.

Also, from 2012, all companies will have to offer an occupational pension with contributions or subscribe to the NPSS. So, whilst the "Potential" employer doesnt have one now, they will do in 5 years time.

maccalike7

usefull piece of info, thanks for that..

EdInvestor

maccalike7 wrote: »

What im after is a pension plan or saving plan, whatever really, just as long as i can show her that me changing jobs, wont be such a big issue when it comes to later in life..

Open a maxi ISA invested in stocks and shares (the same as a pension is invested).You can contrubute up to 7k a year. When you come to retire any income you get from the ISA is tax free (unlike a pension) and you can get out the capital as well if you want.For a basic rate taxpayer with no employer contribution, the ISA is a much better way to invest for retirement as it is much more flexible, there is no loss of capital as with the pension.

You might also like to check out your state pension entitlement which may be higher than you think, as most people forget about the state 2nd pension (S2P).

https://www.thepensionservice.gov.uk for a forecast.

dunstonh

For a basic rate taxpayer with no employer contribution, the ISA is a much better way to invest for retirement as it is much more flexible, there is no loss of capital as with the pension.

Thats not fully the truth though is it.

From an income point of view, the pension will provide higher income in retirement than an ISA. It may not be as flexible but it is prudent to at least aim to use up your personal allowance in retirement by use of a pension. Then go with ISA for the amount above that.

There is an ISA vs pension thread in this section which covers the pros and cons of both options in more detail which you may wish to read maccalike7.

maccalike7

thanks guys

plonkee

If you think it would help convince your girlfriend, you can contribute to a stakeholder pension, personal pension, or a self-invested personal pension (SIPP) regardless of which employer you work for.

The most important thing is have a job you enjoy and to invest money towards your retirement, regardless of whether there is currently an employer's scheme in place or not.