USS Pension - any reasons why I shouldn't increase my voluntary contributions to the DC element?

What_time_is_it

I'm an active member of USS and have regular contributions to the Income Builder (DB - average salary with employer contributions) AND a small amount each month of voluntary contributions to the Investment Builder (DC - no employer contributions). The Investment Builder is both tax and NI efficient and I am a standard rate taxpayer so effectively each £1 I invest actually costs me 68p in salary sacrifice.

Seems like a no-brainer to invest as much as I can into the Investment Builder pot then, right? But is there a catch? Am I missing something? Would I be better off investing any spare cash in something different?

Thanks!

tooldle

No downside that i'm aware of. I make additional contribution to the investment builder every month.

Marcon

What_time_is_it said:

I'm an active member of USS and have regular contributions to the Income Builder (DB - average salary with employer contributions) AND a small amount each month of voluntary contributions to the Investment Builder (DC - no employer contributions). The Investment Builder is both tax and NI efficient and I am a standard rate taxpayer so effectively each £1 I invest actually costs me 68p in salary sacrifice.

Seems like a no-brainer to invest as much as I can into the Investment Builder pot then, right? But is there a catch? Am I missing something? Would I be better off investing any spare cash in something different?

Thanks!

Depends what you're trying to achieve. If you are 35 and saving for a mega holiday in two years' time, increasing your pension contributions, however tax efficient, isn't going to do it!

If on the other hand you're saving for the long term and won't need access to the cash until you are (at least) in your mid to late 50s, then it's hard to beat.

What_time_is_it

Depends what you're trying to achieve. If you are 35 and saving for a mega holiday in two years' time, increasing your pension contributions, however tax efficient, isn't going to do it!

If on the other hand you're saving for the long term and won't need access to the cash until you are (at least) in your mid to late 50s, then it's hard to beat.

Thanks. Well I'm in my mid-40s and hoping to retire at 60. Not saving for anything specific at the moment but I have a solid pot of savings (about 6 months salary) if needed. I do have a mortgage which should be paid off in another 8 years or so. Currently in a good (lucky!) fixed rate for another 2 years on that.