New job - 3% contribution vs 10% previously

MX5huggy

My Council wants HGV drives for bin lorries at £10.42 per hour. Or senior Accountant £30k. 

Malthusian

josecc said:

What do people think is a good percentage for your company to pay in? Mines matches to 8% which I don't think is great but it's not the worst either 

It should really be irrelevant, because overall package blah blah.

Taking my economist's hat off for a moment and stepping into the real world, I would say 5:5 is decent and 10:10 attractive.

A 1:1 ratio is easy to understand and a good incentive for people to pay in.

Any higher than 10:10 penalises younger employees who got started with their pension early enough, have no real need to prioritise their pensions over their lifestyle in the present, and are likely to balk at cutting more than 10% off their gross salary. Remember that any amount of employer matching transfers pay from those who don't save the maximum matched amount into the paypackets of those who do.

Alternatively, if the employer does full salary sacrifice (including employer's NI paid into the pension), that's generous enough for me and employer matching doesn't come into it. If you can get salary sacrifice with the full NI saving, you should be in a position to negotiate your pay as an individual, bearing in mind that salary sacrifice usually has to be set up individually. Which means we go back to "overall package blah blah".

SouthCoastBoy

My employer puts in 6% then matches up to 6%. Nowhere near enough imo. However the real problem is lack of fund choices. 

I also contribute to a sipp but in a lump sum towards the end of tax year when I know my year end tax position

Albermarle

When I had a major job change many years ago ( from private sector to private sector) I made the following calculations.
Leaving gold plated DB scheme for 4.5% DC scheme . I guessed I needed minimum 20% compensation but would probably not get all of it , so went for 15% + another 15% as an incentive to move. Which was agreed.

Probably financially I only made some small progress, but it was a more senior/better job, and I wanted to move anyway. Also I lobbied successfully to get the employer contribution increased to 7.5% and later 9% .Plus the previous employer stopped the DB scheme soon afterwards anyway.

Retireinten

2nd_time_buyer said:

Prism said:

Mine is a 4% match but it honestly doesn't matter if the overall package is decent. When I was self employed I was on a 0% company contribution and when I ran a limited company it was 200%. It doesn't really make much difference in the end if you get salary or pension.

I think you are right. The private sector attracts people with the salary. The public salary prevents people leaving with the pension.

In my experience this sums up working for the public sector... for those that understand the value of the DB pension they have anyway.  Not every public sector worker appreciates its worth. 

In terms of pay, some lower end office based jobs are paid reasonably well, but many aren't comparable to the private sector (if you exclude the pension). I've worked as a middle professional/manager in the public sector for 20+ years and we have struggled to recruit Accountants in the £35k-£50k bracket for a long time now. If we're lucky enough to appoint (I'll be the first to admit our recruitment processes are very off-putting) they rarely last more than six months, preferring to head back to the private sector. 

We have lost a number of technical IT staff in the last 18 months to the private sector also - councils just cannot compete with salaries of £80k+ that are offered elsewhere. Technical specialist roles are just not recognised in the public sector and therefore not remunerated in line with the market. 

I've recently made the decision to leave the public sector after a 28 year career, having decided that the pension is not worth risking my health any longer.  I now work for a limited company on a comparable salary, in a job that is just that... a job. It's only after walking into a new role that I appreciate just how off the charts bonkers my last public sector job was. 

lisyloo

josecc said:

What do people think is a good percentage for your company to pay in? Mines matches to 8% which I don't think is great but it's not the worst either 

It’s the overall package that matter.
i went from a job with ok pay and 10% matching, so one that was only 3% pension (small company) but I got £10k more, so it was still better.
if you have the salary then you can put as much as you want into your pension (subject to £40k annual allowance and min wage) so it doesn’t really matter what the % is.
also factors like salary sacrifice matter.

Albermarle

lisyloo said:

josecc said:

What do people think is a good percentage for your company to pay in? Mines matches to 8% which I don't think is great but it's not the worst either 

It’s the overall package that matter.
i went from a job with ok pay and 10% matching, so one that was only 3% pension (small company) but I got £10k more, so it was still better.
if you have the salary then you can put as much as you want into your pension (subject to £40k annual allowance and min wage) so it doesn’t really matter what the % is.
also factors like salary sacrifice matter.

The only thing I would say, is that personally I would think that if an employer only offered the minimum 3% contribution, it could be a sign that they could be stingy generally, and not the best sort of employer to work for.

Motherofcelticdragons

Thanks everyone for your help. I have agreed a salary 10% higher than I'm currently on, which means more cash in my pocket monthly. the pension package is under review for I'm hoping they'll at least hit 5%. Long term, I'll increase my contributions to help build up that pot (although the world will probably be a dystopian wasteland by the time I can retire anyway!). Ultimately it is a bit of a sideways move but with huge scope to grow the role and secure more money that way - and more importantly its a fresh challenge for me, after being stagnant in my current company.

2nd_time_buyer

Motherofcelticdragons said:

Thanks everyone for your help. I have agreed a salary 10% higher than I'm currently on, which means more cash in my pocket monthly. the pension package is under review for I'm hoping they'll at least hit 5%. Long term, I'll increase my contributions to help build up that pot (although the world will probably be a dystopian wasteland by the time I can retire anyway!). Ultimately it is a bit of a sideways move but with huge scope to grow the role and secure more money that way - and more importantly its a fresh challenge for me, after being stagnant in my current company.

Congratulations. Good luck in the new job

Albermarle

Motherofcelticdragons said:

Thanks everyone for your help. I have agreed a salary 10% higher than I'm currently on, which means more cash in my pocket monthly. the pension package is under review for I'm hoping they'll at least hit 5%. Long term, I'll increase my contributions to help build up that pot (although the world will probably be a dystopian wasteland by the time I can retire anyway!). Ultimately it is a bit of a sideways move but with huge scope to grow the role and secure more money that way - and more importantly its a fresh challenge for me, after being stagnant in my current company.

Well done and I hope you enjoy the move.
Couple of comments
For a  good retirement income/early retirement you need to build up a surprisingly/worryingly  large pot. Less than 10% going in each year simply will not cut it, and the earlier you can increase contributions the better as it gives more time for the money to grow.
When I was younger we actually had adverts on the TV telling us what to do in the event of a nuclear war, so I would not get too negative about the future as there is always somebody saying 'The end of the world is nigh'