over pay work pension or start sipp

atush

eastcorkram wrote: »

Not wishing to hijack, but seems silly to start another thread when I was going to ask something similar !

I read on here about how important it is to save into a pension. I also hear about how you should make the most of the employers contribution and so on. But then I hear some people talking about saving too much into a pension.

My employer will sadly only pay 2.5%. I currently pay 20%. I should point out that I'm not really doing this to get a pension as such. It is too late for that with this scheme really. I have been in it a year, and am 55. I just thought it was a good way of saving. Basic pay is about 32000, and the pension is salary sacrifice. Over time and bonus take the salary to about 44000, and tax code is 500L.

The scheme is with HL (sipp) and at the moment it goes into four different funds. I know nothing about such things, and they were just advised to me at the start. They seem to be doing OK at the moment.

So....is it Ok to pay in the 20%?? Seems better than just saving it into a bank.

Who said anything about saving too much into a pension? There is a lifetime allowance of 1.2Million, but most people dont get that far.

Your pension is salary sacrifice. You get both your tax releif and no NI is paid on that money. which means each 100 in your pension cost you ONLY 68. Could be more if your employer kicks back some of their Nic savings to you. Not bad going is it?

As for it being too late, none of that talk. You have 1 years to go i assume, and if saving 22.5% of salary into a pension you'll tot up a lovely pot over 10 years.