workplace pension vs private pension or both

BigTerryWogan

Hello all,

I know there are financial wizards in the kingdom of MSE forum. I'm due to change jobs again and want to get things right this time round.

In summary
38 years old, little to no pension pot to date.
Currently financially stable, hoping to be mortgage free before 60.

Can afford to pay £250 into my new work's pension each month and would still have roughly £5K available to invest.

should i contribute more than the £250 and not bother investing elsewhere as well, what about getting another pension.

Really don't know what to do for the best

Thanks in advance

xylophone

little to no pension pot to date.

What do you have?

If you contribute more to your new company pension will the employer match it?

You mention £5000 - what exactly is this?

Brynsam

Why another pension - why not pay more into your employer's scheme? Check if they will pay more if you pay more; even if they don't, if the charges are comparable to other pension schemes, there seems little need to complicate things by collecting pension schemes for the sake of it.

Presume you mean you have a one-off lump sum of £5K to invest, not £5K per month (happy thought!). Before tying it up in a pension, do you have an adequate rainy day fund? If not, an ISA might be a better idea.

MallyGirl

I would check out how the company pension is invested and see if you are happy with that. Are there many options to choose from if not?

Do you contribute via salary sacrifice as that gets you more bang for your buck?

Does the scheme allow you to contribute more?

Once you know these things you will be better equipped to get good suggestions.

For example I can salary sacrifice so I save on NI, DH does even better and gets employer NI too. I can change my pension contribution amount every month (and do for various reasons). I am OK with the choice of funds as I can compensate with a SIPP and ISA to get an overall portfolio that I am happy with.

BigTerryWogan

ok, didn't want to bore all with life story, but guess you need more to go on. lol

have less than 3K in previous pension schemes.

have 5K disposable (and 5K rainy day money) just sat in current acct doing nothing, small family and OH is very solvent. Basically looking to better protect myself and help add to "our" future opportunities.

we own over 60% of house already.

my concerns is if i pay more into pension then that's tied up till retirement.

unfortunately don't know the full details of my new employer's pension. Have based my estimates on 12% from me and 3% from them.

does that help?

xylophone

It might be possible to transfer the old pension into the new.

You say that your OH is "very solvent" but is the £10,000 (?) you mention your only joint savings?

If so, it is really an emergency fund - if eligible, you and your OH might consider each opening a sole Nationwide Flexdirect account and a joint for a year to get 5% interest and a sole TSB Plus current account each.

You can cycle the required inputs from TSB to NW and back again.

You and your OH might also wish to consider a Flex monthly saver each.

BigTerryWogan

xylophone wrote: »

You say that your OH is "very solvent" but is the £10,000 (?) you mention your only joint savings?

10,000 is mine.

we have joint acct for bills and bit extra.

OH is the other end of the spectrum. she has big pension pot already, shares and share options with current employer. 3-4 times the income of myself.

plan was to split my 10k ( 5k as rainy day and 5 as investment option.

Alexland

We don't know your income or lifestyle but if at 38 you only have DC pension pot(s) of £3k you are very much behind in your retirement provision and should consider significant additional contribution to catch-up.

Again without knowing the details of your workplace pension or your proposed alternative it is hard to comment but I find it works well to make additional contributions into my workplace pension (to get employer matching, salary sacrifice, etc) and then do lump sum transfers every few years into a SIPP where I can invest with more freedom.

Alex.

PeacefulWaters

don't know the full details of my new employer's pension

Politely, find out. How on earth do you expect a straight answer otherwise?

BigTerryWogan

thanks everyone so far, i had expected to have an answer to specific pension breakdown but individual on A/L, tried to get ahead of the 8 ball and this has helped with questions for them if and when they call tomorrow.

AlanP_2

Considering your OH for a moment.

Great that they have good income, shares, share options and pension but they are very reliant on their employer.

I used to work for a computer company in the early 90s when they had almost a 100k employees across the globe and share price had been on an upward trajectory.

Lots of my colleagues had great salaries and shares bought through discount scheme. When company fell off cliff they ended up redundant with worthless shares.

Would you invest in the shares of a single company normally? Diversification would be a less risky option.