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Should I contribute more to my workplace pension?

Mark_Glasses
Posts: 97 Forumite

None of the companies I've worked for offered pensions until it became compulsory so I never had a pension until this happened.
None of my employers have been very generous with their contributions, they've either been the minimum or 1 or 2% higher.
Currently my employer contributes 4% but I have the choice to contribute a higher % to it. The employer will always contribute 4% no matter what my contribution is.
If my employer matched whatever I contributed it would be a no brainer to contribute as much as I could, but without my employer contributing more is it worth me contributing more?
None of my employers have been very generous with their contributions, they've either been the minimum or 1 or 2% higher.
Currently my employer contributes 4% but I have the choice to contribute a higher % to it. The employer will always contribute 4% no matter what my contribution is.
If my employer matched whatever I contributed it would be a no brainer to contribute as much as I could, but without my employer contributing more is it worth me contributing more?
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Comments
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If my employer matched whatever I contributed it would be a no brainer to contribute as much as I could, but without my employer contributing more is it worth me contributing more?It is absolutely worth you paying more (just as it would have been worth paying into one before auto-enrolment).
You get tax relief on your contributions and if your employer supports salary sacrifice (which many do) then you get NI reductions as well. For retirement provision, pensions beat savings accounts and ISAs in 99% of scenarios.
I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.2 -
Mark_Glasses said:None of the companies I've worked for offered pensions until it became compulsory so I never had a pension until this happened.
None of my employers have been very generous with their contributions, they've either been the minimum or 1 or 2% higher.
Currently my employer contributes 4% but I have the choice to contribute a higher % to it. The employer will always contribute 4% no matter what my contribution is.
If my employer matched whatever I contributed it would be a no brainer to contribute as much as I could, but without my employer contributing more is it worth me contributing more?Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!2 -
Mark_Glasses said:None of the companies I've worked for offered pensions until it became compulsory so I never had a pension until this happened.
None of my employers have been very generous with their contributions, they've either been the minimum or 1 or 2% higher.
Currently my employer contributes 4% but I have the choice to contribute a higher % to it. The employer will always contribute 4% no matter what my contribution is.
If my employer matched whatever I contributed it would be a no brainer to contribute as much as I could, but without my employer contributing more is it worth me contributing more?
https://retirement.fidelity.co.uk/retirement-savings-guidelines/#/
Personal Responsibility - Sad but True
Sometimes.... I am like a dog with a bone0 -
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Absolutely. Pay in what you can afford.
There used to be a rule of thumb that pension contributions percentage should be about what your age is.0 -
penners324 said:Absolutely. Pay in what you can afford.
There used to be a rule of thumb that pension contributions percentage should be about what your age is.I’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
& Credit Cards boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.
All views are my own and not the official line of MoneySavingExpert.3 -
penners324 said:Absolutely. Pay in what you can afford.
There used to be a rule of thumb that pension contributions percentage should be about what your age is.Personal Responsibility - Sad but True
Sometimes.... I am like a dog with a bone0 -
Tax, contribution matching and all the other perks aside, the more you contribute earlier rather than later the better it is (if the fund returns are positive not negative over the relevant period). Get out a compound interest formula and play with it.1
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Never mind whether your employer levers your contributions, the tax man does! 25% uplift for a basic tax payer, more for higher rate tax payers. Plus another 2-10/12% if your employer offers a salary sacrifice scheme.
A good example of the power of compound interest in this article - When saving for 10 years pays more than saving for 40
Save from 21 to 30, then stop. You will have a bigger pension than a saver who starts at 30 and stop at 70. The miracle of compound interest, Einstein's 'eighth wonder of the world’
Signature on holiday for two weeks0 -
@penners324 I can afford to
@mallygirl not sure I could afford that much
@cloud_dog I've thought about it because retiring is very important to me
@JohnWinder I'm in my 40s so that ship has sailed
@Mutton_Geoff I'm a higher rate tax payer0
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