Advice - private and work pension

edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
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AnagranAnagran Forumite
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Hi everyone, looking for advice re pensions, hope it all makes sense, I am not too up on pensions and how it all works (hence looking for advice or someone who can point me in the right direction.)

My husband's previous employer did not offer any kind of pension, but he was advised to pay into one separately, which he has been doing for many years now, (approx 15). Last year he changed jobs and the new employer has a work pension which seems pretty good and he is paying into that directy through his earnings, while continuing to pay into his own pension along side this.

He has just received notification of this years increase to his monthly payments to the private pension, which he agreed would go up every year when he started the pension. As his new job is a significant pay cut for him, we are finding things tight at the moment, and he is now questioning if there is any point in paying into two different pensions, he is considering stopping paying into the private one.

I am not sure whether this is a good idea (or if it is possible or not) as he pays a fair bit less into the work one than he does the private one, so suggested maybe just putting a bit less in the private one if that is possible?

Not realy sure exacty what I am asking here, maybe if someone could explain what options are open if he/we cannot keep up paying into both, could he stop and/or reduce payments to one of them? Or is it a good or bad idea to do this? What happens to the private one if he stops paying into it? Or where can I find out a bit more about all this stuff!?

If it makes any difference we are mid 30's with a young family. I have not paid anything into any pension at all until this current year when I joined my work pension scheme.

Thanks is advance.

Replies

  • xylophonexylophone Forumite
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    I am not sure whether this is a good idea (or if it is possible or not) as he pays a fair bit less into the work one than he does the private one, so suggested maybe just putting a bit less in the private one if that is possible?

    If there is no information in the documentation he would have received when he started the pension, has he contacted the private pension provider to check on what to do if he wishes to decrease his payments or leave them at the same level or stop contributing?

    Does this pension have any guaranteed benefits?

    Does his employer match his contributions to the pension scheme if he pays more than the minimum, or match them up to a certain level?

    Would there be any benefit ( lower charges, perhaps?) if he transferred (if permitted), the private pension into the scheme provided by the employer?
  • AnagranAnagran Forumite
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    Thanks for the reply,


    Like I say I am not very familiar with pensions, so you have given me a good start with the sort of things I need to find out and questions I need to ask to help him make a decision.

    I am trying to dig out info from his private pension ,to see if I can find some answers about that.

    I had not thought about transferring, but after reading through the info from the new work pension (which is a "Defined Benefit Occupational Pension Scheme"??) they say it may accept transfers in and may make employer contributions when you make additional voluntary contributions at the individual employers discretion, so that is something I will contact them to ask about.


    Not sure what "guarenteed benefits" are, sorry!

    Also not sure about charges on either pension, so again thanks for the advice and I will try and find out more.

    Thanks x
  • xylophonexylophone Forumite
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    Guaranteed benefits - for example Guaranteed Annuity Rates.

    A Defined Benefit pension is different from a defined contribution/money purchase pension.


    https://www.moneyadviceservice.org.uk/en/articles/defined-benefit-schemes

    Transferring to the DB scheme may be a good deal for him - however, the DB pension will have a Scheme Pension Age before which the pension cannot be taken without actuarial reduction.

    Your husband might wish to keep his private scheme on the basis that (at the moment) it can be accessed at age 55.
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