Change of pension advice needed

xylophone

Brave choice, don't think too many would have gone that route if the DB option was available.

But isn't the OP still a member of the 1/60th  CARE DB scheme?

It's just that instead of his paying an employee contribution and the employer making an employer contribution he has accepted a lower salary in return for the whole of the pension contribution being made as an employer contribution?

Example here

https://www.btppensions.co.uk/in-the-fund/paying-into-care/understanding-your-benefits

The pension you get when you retire is based on your pensionable salary history over the course of your career with BTP.

Your Guide for Members shows how your pension is calculated.

Benefits when working

• You and your employer both pay into your pension
• Your pension contributions are tax-efficient -- they're taken from your gross salary before you pay income tax. You can also pay lower National Insurance contributions by joining the BTP's salary sacrifice scheme, which is called 'Pension Plus'

xylophone

With this big hit is it still worth carrying on with this 1 /60th pension

Do you have a Scheme Guide?

Do you have any form of written communication from your employer giving details of how the Salary Sacrifice operates?

See 

https://www.moneyhelper.org.uk/en/pensions-and-retirement/building-your-retirement-pot/salary-sacrifice-and-your-pension

So if your employer offers a salary sacrifice arrangement, find out whether it’s right for you.

Your employer should give you an overview of how salary sacrifice might affect you and whether they would pay some or all of the NICs they save into your pension pot.

You can also ask your employer to calculate how salary sacrifice would affect your take home pay. You don’t have to go ahead with salary sacrifice if you don’t think you’ll benefit enough.

Gary1984

davnav said:

With this big hit is it still worth carrying on with this 1 /60th pension

Thanks for your time 

Very very much so. To stop you'd be throwing away a pension far more valuable than what you've given up in terms of take home pay now.

Marcon

davnav said:

Update after agreeing to a salary sacrifice,  the company has now reduced my wage by £4300.

My Top line before off takes is now £2000 less than the average wage of a labourer in my trade.

So my top line for being a tradesmen is now paying £2000 less than the labourers working local to my area.

After taking to other  trades, they've all stopped this pension 

With this big hit is it still worth carrying on with this 1 /60th pension

Thanks for your time 

Are the labourers getting the same excellent pension you're being offered?

QrizB

davnav said:

With this big hit is it still worth carrying on with this 1 /60th pension

Do you intend to retire eventually, or do you plan to work until you die?

If you intend to retire, then yes this is an excellent pension and and you should continue to pay into it.

Bimbly

Hi davnav - it's absolutely worth it to still carry on with your 1/60th pension. This builds up a guaranteed pension amount to pay when you retire, almost certainly linked to inflation. So you have peace of mind in your retirement years. It's costing you 16.5%, but the employer has to fund the scheme so they're likely matching that amount to be able to pay you your retirement benefits.

Salary sacrifice, which you have opted into, is a better way to pay for your pension - as it's cheaper for you!

This is how it works: rather than paying your salary and taking off tax and national insurance to send to HMRC, the employer takes that 16.5% and - before paying you - adds it to your pension. It is still your money.

Without salary sacrifice, your pension claims back the tax relief on income tax only. With salary sacrifice, you have saved on both tax and national insurance - so you get the same benefit, but it costs you less.

Don't think of it as having taken money off your top line, think of it as an extra benefit added to your salary. With these schemes, you will usually find that if you need to show someone - like a mortgage company - what your salary is, they will include that 16.5%.

Times are tough, of course they are, but if you can save for retirement like this, you are going to be so much better off than all your friends who won't have made any provision for when they stop work.

Kim1965

Im a tradesman, the vast majority of my colleagues have no pension, they plan to graft until they drop/or rely on the state in retirement. 
 Its an excellent offer, no doubt gives life assurance and a pension to a spouse. Well wort the money. 

Albermarle

Kim1965 said:

Im a tradesman, the vast majority of my colleagues have no pension, they plan to graft until they drop/or rely on the state in retirement. 
 Its an excellent offer, no doubt gives life assurance and a pension to a spouse. Well wort the money. 

I thought many tradespeople invested a lot of time in making their own homes bigger/more modern/worth more, as a way of building up assets . Or even getting into BTL, by buying properties in a bit of state and getting them sorted through their own efforts and the help of 'mates rates' . The old 'property is my pension line' is  trotted out frequently on Homes under the Hammer for example. 
Maybe they are just a minority though?

Exodi

This thread has been difficult to read, I've never seen someone act so impulsively with such significant financial decisions.

I died inside when I read you cancelled your DB scheme and requested to not pay into a pension all together. As someone else said, the employers must have been absolutely thrilled with this idea.

Stop making quick decisions without researching this. You are robbing your future self.

The CARE scheme is likely the best bet (assuming the salary sacrifce scheme is for a defined contribution scheme).

Malthusian

QrizB said:

davnav said:

With this big hit is it still worth carrying on with this 1 /60th pension

Do you intend to retire eventually, or do you plan to work until you die?

If you intend to retire, then yes this is an excellent pension and and you should continue to pay into it.

And if you intend to work until you drop it will still be an excellent pension when your body eventually forces you to stop.

Albermarle said:

I thought many tradespeople invested a lot of time in making their own homes bigger/more modern/worth more, as a way of building up assets . Or even getting into BTL, by buying properties in a bit of state and getting them sorted through their own efforts and the help of 'mates rates' . The old 'property is my pension line' is  trotted out frequently on Homes under the Hammer for example. 
Maybe they are just a minority though?

Well, the private rental sector only accounts for 20% of UK properties, so a quick back-of-fag-packet calculation suggests they are indeed a minority. There are simply not enough rented properties to go around the UK's tradespeople for the BTL side-hustlers to be a majority. I would go with Kim1965's lived experience.

A related retirement plan for tradespeople who can pass the marshmallow test but have no interest in retail pension products is to pay off their mortgage ASAP, sell their house and move abroad somewhere sunnier and cheaper, often while running a pub.

@davnav: If I told you that I was going to install some total crap in my house that would fall apart within two years, because lots of my mates who also live in crappy houses that are falling apart are doing the same thing, therefore it must be great, would it seem to you like a sensible decision?

This is the same thing as copying financial decisions made by people who you know are skint and have no financial security, on the grounds that they're all doing it so they must be right.