Should I contribute to 2 pensions?

Bmth100

I'm 29 and have just £4,000 in a government pension earned at my previous employer (low contribution % and I graduated late).

At the annoyance of my wife and friends, I can't help but always think in the long term and how much money we want to have to live on if / when we reach retirement.

I've just started a new job on £30k and judging by my payslip, I'm paying into their pension already (thought I had to wait until after probation but apparently not) and I'm going to discuss upping to the maximum contribution I can today.

But my question is this; I really want to start focusing on shovelling money away for retirement, whenever that may be, but I know there'll only be so much you can contribute. Is it silly to continue paying extra into my old employer's pension scheme, given that I'll no longer get any kind of matched contribution on it? Would it be better to just find a good ISA? I can't transfer the pension until 2017.

zagfles

You can't usually pay into a previous employer's pension. Is there an upper limit on what you can pay into the current employer's pension? There isn't usually.

Other options are a SIPP or a personal pension.

Bmth100

zagfles wrote: »

You can't usually pay into a previous employer's pension. Is there an upper limit on what you can pay into the current employer's pension? There isn't usually.

Other options are a SIPP or a personal pension.

Oh really? I seem to be able to pay into this one still, though maybe it's because of the company they chose (I worked for a small company who had to start a scheme in 2014). It's with NEST and allows me to continue paying in.

I'll have a chat with work today and see if there is an upper limit, I do hope there isn't as you say, that would be excellent. Though I assume there's usually a limit as to what the employer will match?

bigadaj

Nest isn't a great scheme, many people would contribute enough to get the maximum employer contribution and then use a separate personal pension or sipp for additional contributions.

The maximum you can normally contribute, possibly into your work pension or potentially into your pp or sipp is your full earnings or £40, which ever is the lower, so you can put your whole earnings in if you want.

It's good to think about and contribute into a pension but there are other considerations and ways to save.

Maximise employers contribution, as you're a basic rate taxpayer then I wouldn't save a lot more into pension unless you can do by smart pension or salary sacrifice when the benefit is greater.

After a decent emergency fund saved in high interest savings accounts I'd look at isas, and there's obviously property coast and mortgage to consider.

xylophone

The maximum you can normally contribute, possibly into your work pension or potentially into your pp or sipp is your full earnings or £40,

A zero or three missing.....:)

Bmth100

xylophone wrote: »

A zero or three missing.....:)

I did have to read that three times!

Thanks all

atush

Or a K?

I would not continue with Nest. I'd leave it (at least until 2017 when it can be transferred).

then see how much you can pay into your work pension, but I suspect there wont be an upper limit (or at least not mroe than 30K as that is what you earn).

But if you want to save more outside of pension, use S&S isas and current accounts as well.

kidmugsy

You're 29; in 17/18 you can open a LISA which can act as an emergency fund, a place for saving to buy a house, and a place for saving for old age. Meantime bung into pensions only the contributions that either (i) harvest an employer's contribution, or (ii) exploit salary sacrifice.

If the only tax advantage you get is on your own contribution, then until you become a higher rate taxpayer, don't bung any money into pensions unless (i) or (ii) applies. The tax incentive is far too small to compensate for the inflexibility of tying up your money for thirty years or so.

Now then, can you explain this: "have just £4,000 in a government pension earned at my previous employer"?

bigadaj

xylophone wrote: »

A zero or three missing.....:)

Yes, the k I typed was missing.