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Pay rise, more into Workplace Pension or Private Pension

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  • R_P_W
    R_P_W Posts: 1,522 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    You are missing out on huge tax benefits by not paying more into your pension.  As for which one, who knows as there isn't enough info provided to say.

    Are you getting the max contribution from your employer?  If not make sure you are.
    If you workplace pension is salary sacrifice then it is likely easier to just pay into that one unless the charges high.
  • devends
    devends Posts: 13 Forumite
    10 Posts
    Hello, thanks for your comments, yes I am getting the max contribution from my employer, it doesn't matter if I pay in more to my workplace pension, the amount they put in will remain the same.
  • Albermarle
    Albermarle Posts: 27,875 Forumite
    10,000 Posts Seventh Anniversary Name Dropper
    edited 14 March 2022 at 3:46PM
    Hello, yes absolutely agree I'm planning on putting in more. Currently I have been saving a lot each month, some I put into pension but I have been putting most into ISA stocks and shares as I'd like to not have all my eggs in one basket, it's my understanding that if a pension company went under you're only ensured 85k which unnerves me.

    Then your understanding is pretty much wrong . For example with the stakeholder, you have £85K compensation for Reassure , which is basically to cover fraud or massive maladministration. Then your money is in the L&G fund , so you have £85K for that as well. In any case if companies like Reassure or L&G go bust  , it probably means WW3 had happened and you wouldn't care . They are not banks , lending money to people who might not pay it back .
    I would think virtually every regular poster on here has hundreds of thousands with these pension companies , or similar , and never give it a moments thought.

    My question was mainly which pension would be the best to put more into and that would give me more in the long run, I suspect workplace pension due to salary sacrifice and tax saving rather than my stakeholder pension even though that has more in it initially to count towards compound interest?

    You will gain the same tax relief whichever way you do it. However with salsac it happens automatically and you get a NI benefit as well. 
    Neither pension pays interest , your money is invested in the financial markets which will hopefully produce investment returns above inflation long term . 

  • devends
    devends Posts: 13 Forumite
    10 Posts
    Then your understanding is pretty much wrong . For example with the stakeholder, you have £85K compensation for Reassure , which is basically to cover fraud or massive maladministration. Then your money is in the L&G fund , so you have £85K for that as well. In any case if companies like Reassure or L&G go bust  , it probably means WW3 had happened and you wouldn't care . They are not banks , lending money to people who might not pay it back .
    I would think virtually every regular poster on here has hundreds of thousands with these pension companies , or similar , and never give it a moments thought.
    Ha ha, okay thanks, clearly I am very ignorant that's why I'm posting here.

    Thanks for that last bit, sounds then like putting more in the workplace pension rather than the stakeholder is a good idea, and also means I don't have to fill in a self assessment form, which is a bonus.
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