Pension Planning at 23

thmaga

I'm currently taking stock of my pension contributions to make sure I'm saving enough for retirement.

I'm a member of the LGPS so will have a small DB scheme (I'm unlikely to be a member of the scheme for a significant period of time and have a fairly modest salary).

I also have a non contributory scheme with my other employer which is currently paying 10% of my salary (currently a part time salary of c£8400pa) into a Legal and General pot. This has been building up for two years.

The plan is to start my own contributions to the Legal and General pot.

I'm thinking I should be looking at at least 100/month extra in to that pot, I currently have plenty of disposable income, and am saving for a house deposit too.

Would you say the 10% employers contribution plus 100/month would be sufficient, or should I be aiming for more, I could double this but am keen to get the balance right between saving for a house and for retirement.

Lokolo

How are the 10% contributions being added? via salary sacrifice or from net pay?

If it is a salary sacrifice scheme then it makes sense to increase the %.

If not then I wouldn't be looking at adding more into the pension, but using other tax wrappers such as ISA.

Do you own a property? If not, it would be worth using the £100 a month to save/increase deposit.

If you do own a property, what LTV and rate are you on? Anything more than 2% then I would overpay until you can get a rate 1.5% or below.

AnotherJoe

Keen as I am on pensions, you already have two schemes going, I'd focus on house first.

thmaga

Lokolo wrote: »

How are the 10% contributions being added? via salary sacrifice or from net pay?

If it is a salary sacrifice scheme then it makes sense to increase the %.

If not then I wouldn't be looking at adding more into the pension, but using other tax wrappers such as ISA.

Do you own a property? If not, it would be worth using the £100 a month to save/increase deposit.

If you do own a property, what LTV and rate are you on? Anything more than 2% then I would overpay until you can get a rate 1.5% or below.

Currently my employer contributes an amount equal to 10% of my gross salary whether I contribute or not.

If I pay contributions myself, then these are taken from my net pay and have basic rate tax relief added.

I don't own a property at the moment.

thmaga

AnotherJoe wrote: »

Keen as I am on pensions, you already have two schemes going, I'd focus on house first.

I guess I'm trying to do both at once! It's more a matter of am I under-contributing at this moment of time or not.

I should be in a position where I have a decent deposit together within the next year or so, maybe that will be the time to re-evaluate.

atush

AnotherJoe wrote: »

Keen as I am on pensions, you already have two schemes going, I'd focus on house first.

Ditto...............

atush

thmaga wrote: »

I guess I'm trying to do both at once! It's more a matter of am I under-contributing at this moment of time or not.

I should be in a position where I have a decent deposit together within the next year or so, maybe that will be the time to re-evaluate.

I would say you arent under contributing as someone your age starting now would look at 11.5% and you are over that.

Lokolo

Yep in that case I agree with the others. Get that house deposit up and running.

Rates tend to drop significantly between 90%, 80% and 70% LTV so an extra 10% deposit would make a huge difference to repayment.