Am I right to not to opt in for my Works Pension?

AnotherJoe

rangersfc wrote: »

Hello cymro2001, Your sussing out of pensions has not started very well. You would be wise to heed the information given by knowledgeable members of this board re your opt out choice!
Regards

To be fair, OP has asked now, rather than ask in 20 years when the penny drops about all the free money they've turned down.

[Deleted User]

AnotherJoe,
Yes, you are correct. He has made a timely decision to seek opinions from fellow board members. A good start.
Regards

dunstonh

which I'm not as in my opinion it's an extremely poor plan, and I'd me much better off putting my money elsewhere - even though they would match my contributions.

The workplace pension gets a 100% uplift effectively. (on a matched contribution). Your individual pensions are never going to catch up with that.

then I've calculated that I my accounts should grow on average 10% per year.

Over-optimistic.

Our workplace has a calculator that gives us an estimate of what we could look at receiving from the plan and for the same contribution plus theirs, they are estimating that at the age of 60 I would receive ~£21,600 as a tax-free lump sum and ~£1,190 per year.

Your calculations are unrealistic and not like-for-like. Pension calculators must use low projection rates, take into account inflation and use the lowest income annuity type. In other words, a whole bunch of assumptions that produce a synthetic figure.

As much as yours is massively overstating reality, theirs is understating. Both are you using synthetic assumptions.

You are throwing away free money. Nothing beats free money.

atush

and I'd me much better off putting my money elsewhere - even though they would match my contributions.

Categorically false. You are NEVER better off throwing away free money regardless of the plan.

If you feel it is a poor plan (for any other reason than the pessimistic estimates) then only put in enough to get their max contribution and put anything else you want to save into a pension into your Sipp.

Thrugelmir

cymro2001 wrote: »

As long as the market continues to uptrend, which is pretty likely for the next 40+ years, and my investments to perform as well as they have based off the past five years, then I've calculated that I my accounts should grow on average 10% per year.

Tell us more. Though I suspect that you won't bother to return to this thread.

lassfarfromhome

As others have said, do not turn down free money. Join the pension scheme immediately and put in whatever you need to to get the matching contribution. Do it tomorrow!

You can't extrapolate and predict the future from the last 10 years (or from the past more generally). We are still in the midst of a bull run following the 2008 crisis which hasn't ended (despite a few corrections). So, the last 10 years are a unique scenario (as is every decade). Expecting a 10% return is likely to leave you disappointed. Hope for somewhere around the 4-7% mark and be prepared for some bumps along the way. Just keep investing. Low cost index funds are what you want.

Paul_Herring

Beyond the other comments made up-thread...

I'm currently paying £70 in per month ...

That is almost certainly not going to be enough. Especially considering the implications of your own assumptions about what's going to happen to it over the next 4 decades.

Brynsam

rangersfc wrote: »

Hello cymro2001, Your sussing out of pensions has not started very well. You would be wise to heed the information given by knowledgeable members of this board re your opt out choice!
Regards

Give OP a break. Just turned 18 and planning ahead to retirement? I was never that organised or far-seeing!

[Deleted User]

Early on investment in education will provide the best returns. And that includes investment in financial literacy books.

Triumph13

Brynsam wrote: »

Give OP a break. Just turned 18 and planning ahead to retirement? I was never that organised or far-seeing!

Hear, hear. There is a lot of good news in this particular story. We have an 18 year old taking an interest in pensions, actually doing something about it and even coming here to ask for advice. Well done OP.
Expecting them to also have worked out by that age that they can't believe what the calculators on their pension scheme website say is more than somewhat harsh.
Welcome aboard OP and feel free to ask any other questions you have as you embark on the journey from pensions novice to pensions ninja. Your future self will thank you no end.