is it worth me joining company pension ?

brucieboy

Hi


I am 51 and currently have £328k in an Aviva SIPP pension


The average gain has been 17% per year for the 5 years I have been in it, so has performed very well


I am looking to take some of the tax free amount to pay off my mortgage , which will give me £1k extra a month, when I am 55,(3 1/2 years' time) depending if the funds perform as before


And leave the remaining amount still invested


The possibility is that I might be able to drawdown just enough to retire but in reality I will probably work until I am 60




I have started a new job with a stakeholder pension


I put in 3%,the company puts in 6%


Is it worth me doing this for 4-5 years or should I see how the SIPP performs ?

Thrugelmir

brucieboy wrote: »

I have started a new job with a stakeholder pension


I put in 3%,the company puts in 6%


Is it worth me doing this for 4-5 years or should I see how the SIPP performs ?

Most certainly yes. The 6% from the employer is free money. Not to be ignored.

Waiting 4/5 years will be too late. Better to make hay while the sun shines.

dunstonh

Is it worth me doing this for 4-5 years or should I see how the SIPP performs ?

Free money. What is there not to like about free money?

Just think about it for a second. If you did not join the works pension, what would you be doing with that 2.4% net that you would be paying (as 0.6% is tax relief)?

A savings account paying 1% or pension that has had it nearly tripled in value overnight and likely to earn an average of 5%-7% a year.

The average gain has been 17% per year for the 5 years I have been in it, so has performed very well

That is clearly not the norm for long term returns. So, you would expect it to get move towards half that amount over the long term. You cant just take the good years without having the bad and nothing.

Stubod

..yes yes yes..free money!!!!!!!!

Peter314

Stubod wrote: »

..yes yes yes..free money!!!!!!!!

What he said :beer:

Mnd

Go for it..

sandsy

Why turn down 6% of your remuneration package? You wouldn't turn down a 6% pay increase and this is more than equivalent as it's paid into your pension without being taxed.

AnotherJoe

What is it about pensions that befuddles people so much they can't see that tripling their money for free is a no-brainer ?

enthusiasticsaver

Yes, of course take the pension. It is free money.

atush

brucieboy wrote: »

Hi


I am 51 and currently have £328k in an Aviva SIPP pension


The average gain has been 17% per year for the 5 years I have been in it, so has performed very well


I am looking to take some of the tax free amount to pay off my mortgage , which will give me £1k extra a month, when I am 55,(3 1/2 years' time) depending if the funds perform as before


And leave the remaining amount still invested


The possibility is that I might be able to drawdown just enough to retire but in reality I will probably work until I am 60




I have started a new job with a stakeholder pension


I put in 3%,the company puts in 6%


Is it worth me doing this for 4-5 years or should I see how the SIPP performs ?

The answer is always- yes

LHW99

Do it - the stakeholder fund could always be transferred into your SIPP when you finally leave that job.