32 and no pension provision

YorkshireBoy

JustAnotherSaver wrote: »

I don't know what a DB pension is so i don't know if my workplace pension is one of those.

DB is 'Defined Benefit', as opposed to DC 'Defined Contribution'. DB is a rarity these days. With DB you know what you'll get, and the risk lies with employer (more accurately, their pension scheme). With DC, the risk is yours.

So for example i currently pay in 10% of my wage. So right now that would drop to 1% into the workplace pension and 9% into the private pension.

Many employers match your contribution (up to a point), ie they will match you up to 5%. You should ensure you maximise this benefit, and therefore limit the private pension contribution to 5%. Unless yours only match to 1%? If so, that's very poor!

JustAnotherSaver

YorkshireBoy wrote: »

DB is 'Defined Benefit', as opposed to DC 'Defined Contribution'. DB is a rarity these days. With DB you know what you'll get, and the risk lies with employer (more accurately, their pension scheme). With DC, the risk is yours.

Ah. There's an old boy where i work who was telling me about his pension. I don't remember the figures but i do remember saying he was guaranteed something. So that'd be a DB then.

Mine will be DC for sure then.

Many employers match your contribution (up to a point), ie they will match you up to 5%. You should ensure you maximise this benefit, and therefore limit the private pension contribution to 5%. Unless yours only match to 1%? If so, that's very poor!

My employer will only ever pay the minimum. If they could get away with paying nothing at all then they would. They're even postponing people joining by about 2 months.

My wife's employer only pays in the minimum & will only ever pay in the minimum. They even tried to persuade staff to opt out (talk along the lines of no pay rise for people who stay in, although they have since had a pay rise actually).

My sister's employer only pays in the minimum & will only ever pay in the minimum.


Eventually i understand that the minimum contribution for me will be 5%. That leaves (at my current contribution 5%, although i would look at increasing it slightly if i could).

Question really is whether to put that 5% into the workplace pension or whether to see an IFA to manage a private pension on the riskier side & put the other 5% into that.

Neasy

Hi there. I'm just responding to your point about why would anyone need to invest in a private pension as well as their workplace pension, and only from my own point of view as heaven knows I'm not a pensions expert.

From my perspective, as I'm in a defined benefit (DB) scheme in which the pension I receive is reduced if I take before the age of 65 (or 67 for the more recent scheme), I want to have a separate pension that I could access before 65 should I decide to stop working earlier. Also, as my main pension is a DB scheme, I feel I am able to take on some risk with the DC component of my retirement planning.

ThinkingOutLoud_2

JustAnotherSaver wrote: »

Eventually i understand that the minimum contribution for me will be 5%. That leaves (at my current contribution 5%, although I would look at increasing it slightly if i could).

Question really is whether to put that 5% into the workplace pension or whether to see an IFA to manage a private pension on the riskier side & put the other 5% into that.

So as noted, there can be many reasons why a separate personal pension adds useful flexibility. But note the costs of a separate provision and compare. And check if your DC work pension is limited in all the ways suggested - it may well not be!

But with respect to the questions asked before:-
> you want something riskier - yet until just now you were not sure if you had a DB or a DC pension?
> I am guessing have no idea what fund type(s) you current pension is in or could be moved into with your employers pension - start by understanding that!
> also focus on working out how much you want in retirement - there are plenty of simple calculators out there via google to see what you will end up with
> it is all very well saying you'd put more in if you could - but surely if not doing so would leave you thrice as poor in retirement as now - you may have to reevaluate today's spending (I know this can be hard reality today but maybe better than harder reality when you are 81)
> assuming the sum of your and your employers contribution is sub 10% combined - this is likely to be less than is typically recommended (think half you age as a % as simple guide)

Good to be here thinking about it though