Workplace pension, worth it for me?

Aretnap

jimfdowning wrote: »

My employer advised me not to bother with the work place pension as I was too old for it to make a difference when I could retire and collect it, which hopefully would be 65.

If your employer offered you a pay rise but advised you not to bother accepting it because it wasn't all that money in the grand scheme of things, what would you do?

The same principle applies to workplace pensions. The 1% employer contribution (which will increase over the next few years) plus 20% tax relief on your own contributions (whether you actually pay income tax or not) is from your point of view essentially free money which you can choose to accept or not. It may not a great deal of money in the grand scheme of things, but that's not really the point - a little bit of free money is better than no free money.

Triumph13

What is the minimum you have to contribute to get the 1% employer contribution? is it 1% ? If this is the usual 'relief at source' type of scheme where they take your contributions from your pre-tax salary then consider the following, assuming a salary of £10K:
Option 1 - 1% employer plus 10% employee = £1,100 in your pension.
Option 2 - 1% employer plus 1% employee into works pension = £200. 9% into a private pension plus tax relief (which you get even though you don't pay tax) = £1,125. Total £1,325 in your pension.
I know which one I'd be doing.

crv1963

It is worth doing simply for the treasury and employers contribution. My wife was auto enrolled (earns quite a bit more than OP) even though in the scheme of things the pension will be small any additional pension on top of state pension is to be welcomed, in 20 years time it may be the difference between a new washing machine or the launderette!


Simple maths £80 pm = £960 pa x 17 (years to SP)= £16320 then add 20% from treasury and maybe 3% from employer you are without any growth from growth looking at over 20k to help your retirement!

atush

My employer advised me not to bother with the work place pension as I was too old for it to make a difference when I could retire and collect it, which hopefully would be 65.

Illegal. Do you want to work for this shyster? Join it.

bostonerimus

It's definitely worth getting into the pension, when was free money, tax deferral and tax free growth not a good deal?....on the there's an argument on tax deferral. The employer sounds like they are breaking the law by encouraging you not to get into the pension.