Opt out of company pension?

colepark

Hi There. This question may have already been posted but I cant find the answer I'm looking for.
After 10 years of self employed consulting (through a Ltd company with me as sole director) I'm looking to go back to back to full time employment with a high street name . I'm 52 and have already hit the LTA for pensions. What are my options in this situation with the new employer? What are the pros/cons of opting out of auto enrolment? Thanks

MX5huggy

What’s the pension offer? Basic you 3% them 5% or maybe matching up to 10% or more? 

Cus

If you are a higher or additional tax rate payer, and the new employer matches contributions then it can still work out beneficial to contribute even if over LTA. It's what I do. If your employer can give you the contribution directly then you could put it into an ISA instead (unfortunately mine didn't have any choice)

colepark

MX5huggy said:

What’s the pension offer? Basic you 3% them 5% or maybe matching up to 10% or more? 

not sure at the moment. want to understand what my options are since Ive already hit the LTA already. thanks.

MX5huggy

colepark said:

MX5huggy said:

What’s the pension offer? Basic you 3% them 5% or maybe matching up to 10% or more? 

not sure at the moment. want to understand what my options are since Ive already hit the LTA already. thanks.

The value of the contributions will decide if it’s worth exceeding the LTA, with markets falling maybe you’re back under the LTA. 

I got the values the wrong way round 3% them 5%  you (minimum allowed to be offered) might not be worth taking the pension. Or maybe they just pay 10% employers contributions with not option to have it as salary then it will be worth taking no matter what LTA position is. 

Albermarle

Will you be a 40% taxpayer in this new job, and are you likely to be a 20% or 40% taxpayer when you retire?

Chewbecca

My employer offers an alternative scheme for those in this position who want to take it up, it’s a cash alternative which you have to agree to save / invest. Ask them if they offer such a scheme. It’s not something many people at my workplace know about and wouldn’t normally be mentioned until you ask.

colepark

Albermarle said:

Will you be a 40% taxpayer in this new job, and are you likely to be a 20% or 40% taxpayer when you retire?

would be 40% tax with new job & probably 40% when I retire

colepark

Chewbecca said:

My employer offers an alternative scheme for those in this position who want to take it up, it’s a cash alternative which you have to agree to save / invest. Ask them if they offer such a scheme. It’s not something many people at my workplace know about and wouldn’t normally be mentioned until you ask.

interesting....thanks

colepark

MX5huggy said:

colepark said:

MX5huggy said:

What’s the pension offer? Basic you 3% them 5% or maybe matching up to 10% or more? 

not sure at the moment. want to understand what my options are since Ive already hit the LTA already. thanks.

The value of the contributions will decide if it’s worth exceeding the LTA, with markets falling maybe you’re back under the LTA. 

I got the values the wrong way round 3% them 5%  you (minimum allowed to be offered) might not be worth taking the pension. Or maybe they just pay 10% employers contributions with not option to have it as salary then it will be worth taking no matter what LTA position is. 

could you clarify? thanks

Malthusian

Chewbecca said:

My employer offers an alternative scheme for those in this position who want to take it up, it’s a cash alternative which you have to agree to save / invest. 

It is increasingly normal for employers to offer a salary alternative to high ranking employees who are over the LTA (to avoid the dilemma between loss of employer contributions vs the certainty of an LTA charge) but I'm surprised that they make you agree to save / invest it. They have no way of enforcing that whatsoever.
The days in which employers were morally responsible for ensuring you could retire one day went the way of the dodo decades ago.
(They can't force their employees to save / invest their pension contributions either, but there is at least a practical deterrent to employees simply withdrawing their contributions as soon as they go in, even after their 55th.)