Should I make further contributions to my nest pension v savings?

Countal0t

I retired last year at 60 but returned to work part time on fixed term contract which so far, keeps being renewed every six months. I am in receipt of an index linked final salary pension which I also draw which is circa £21k. Including my salary I am about £6k below the 40% tax threshold. I joined NEST as my employer contributes to this and it seemed sensible. My question is as I don't 'need' my salary and as savings rates are now so dire - is it sensible to make further contributions to NEST rather than using other traditional savings and if so what are the issues I need to take into account and be aware of. In case it crops up I continue to work because I can, the grey cells like it, I dont feel 'old'enough to retire and with Covid everything I hoped to do has now been put on the back burner (I think) for 3 years - I am also thinking of this as a potential generational income redistribution mechanism, aiming to help my children who have been adversely affected by this virus and will continue to do so for the next few years.

Brynsam

NEST has quite a hefty contribution charge, although they like to describe 1.8% of each contribution as a 'small charge'. If you're only likely to have your funds invested with them for a few years, another provider (who has no contribution charge, albeit possibly a higher annual management charge) might be a better option.

Albermarle

Remember that a pension is not comparable to a savings account . Pension money is normally invested in the financial markets , so can go up and down , although long term should normally outperform savings interest rates.
As long as you understand that there some risks involved,then contributing to pension gives you a tax benefit due to tax relief.

nigelbb

 The simplest & cheapest option just to pay less tax would be to pay money into a SIPP then regularly withdraw 25% tax free & pay 20% tax on the remainder when you eventually draw it. Hargreaves Lansdowne don't make any charge for holding cash in a SIPP. It works even better if you are a higher rate taxpayer who anticipates paying not paying higher rate tax in retirement. With such low inflation as at present it's risk free to hold your pension in cash for a few years & not both with investing at all.