Final salary or personal pension...advice needed!

Bigmonty69

Hi

I have recently joined a company where I have the option of joining their Final Salary scheme (Lothian Pension Fund). At present I am earning £30k, but this will rise as I finish my accountancy exams. I will pay in 6% and they will pay in 18.5%, not that this matters much.

I have previously been paying 4% into Standard Life Pension scheme for the last three years and my previous employer was paying 4%.

My problem is I will most likely only be with this company for two or three years. Would I benefit more from joining the final salary sheme and deferring my benefits when I leave or asking my company to pay into my Standard Life pension (if I pay 10% they will match it).

I am useless with this so am unsure which will give the best benefits when I retire. Obviously there is an element of how much risk I decide to take with my personal pension bt just assume that it will be moderate risk.

Many thanks.

dunstonh

Final salary scheme beats personal scheme unless they are willing to pay that 18.5% into standard life on top of you 6%. 10% is not enough.

Bigmonty69

I know looking at straight percentages it look like a no brainer. However I will only be in the scheme for a couple of years so doesn’t this have some effect on the amount that a final salary scheme will give me??

EdInvestor

Bigmonty69 wrote: »

I know looking at straight percentages it look like a no brainer. However I will only be in the scheme for a couple of years so doesn’t this have some effect on the amount that a final salary scheme will give me??

If you do leave and your pension is deferred, it will be revalued up by inflation or 5%, so should keep its value until you retire.F/S pensions usually have very valuable side benefits such as spouse's pensions, high death benefits and index linking, as well, all of which make ordinary pension annuities very expensive these days.