Which pension is best to over pay into?

ivyboy

I am after some advice of which pension is best to grow the retirement pot.

I am 40 and have two jobs, Plan would be to try retire a bit earlier if possible. The main job has a L & G workplace pension set up. Where at moment I pay 10% in the company matches that. I also pay extra 10% on top. You can then decide to which fund, and what % is invested. etc

The second Job is a retained fireman. It uses WYPF for the pension. The Fire pension is a CARE pension. The amount I receive on retirement increases inline with how much I earn. Which is about 10K a year. But in addition to this I pay £150 a month so £1800 a year. But it goes into a APC.

In 2025 I think will have some more money to pay into the pension to lose earning total. Which do you think one is best pension to pay more into? Is it the WYPF so guaranteed income or the L & G one that hopefully grows with time?

Brie

So L&G is a defined contribution scheme and the Fire pension is more like a defined benefit scheme.  But either way if you pay extra the extra are AVCs so like a DC scheme.  

Will either match anything extra that you put in?  What are the charges for the AVC portion of both?  

This is presuming that you don't have any debts that you should be paying off instead (including mortgage?) and that you don't want to put the money into an ISA.

Mark_d

Do you have an L&G DC arrangement.  You also have a Fire DB arrangement with AVCs treated as a separate DC plan.

I wouldn't bother with the Fire AVCs and instead put all the contributions into your L&G pension.  You'd be able to choose what funds you invest in so that you can get what's most suitable to your attitude to risk and also your retirement plans.

Sarahspangles

ivyboy said:

I am after some advice of which pension is best to grow the retirement pot.

I am 40 and have two jobs, Plan would be to try retire a bit earlier if possible. The main job has a L & G workplace pension set up. Where at moment I pay 10% in the company matches that. I also pay extra 10% on top. You can then decide to which fund, and what % is invested. etc

The second Job is a retained fireman. It uses WYPF for the pension. The Fire pension is a CARE pension. The amount I receive on retirement increases inline with how much I earn. Which is about 10K a year. But in addition to this I pay £150 a month so £1800 a year. But it goes into a APC.

In 2025 I think will have some more money to pay into the pension to lose earning total. Which do you think one is best pension to pay more into? Is it the WYPF so guaranteed income or the L & G one that hopefully grows with time?

I think the answer is WYPF (LGPS) additional pension contributions because the index linking is so good. However if your workplace pension employer was going to match additional contributions that might swing it towards them.

ivyboy

Brie said:

So L&G is a defined contribution scheme and the Fire pension is more like a defined benefit scheme.  But either way if you pay extra the extra are AVCs so like a DC scheme.  

Will either match anything extra that you put in?  What are the charges for the AVC portion of both?  

This is presuming that you don't have any debts that you should be paying off instead (including mortgage?) and that you don't want to put the money into an ISA.

The WYPF pension i don't think the additional is classed as a AVC. What i know the APC payment stands for additional pension contributions. It is part of the 2015 scheme. It buys me a amount of pension when i retire. there are calculators on LGPS website. I think last time i spoke with WYPF. They said our scheme does not allow us to make AVC payment into it, Can only do APC. The WYPF is of course index linked which in last couple of years was good. And i don't feel will be a retained fire man until 60. 

So just trying to work out in my head which i best way to increase the pensions. Is it additional APC or just do AVC into L & G work place

ali_bear

You could shop around for a third pension scheme to pay into. Look for low charges, wide choice of investments, flexibility on retirement..

PropertyGuru_Wannabe

L & G workplace pension most definitely. The 10% matched contribution is too good to ignore. You can also decide on your best global fund and with lowest fees makes this one a winner. Care scheme pension with a commutation factor of 12? You can get far better on a DC pension.

bjorn_toby_wilde

Surely the key question is what do you want to do with the extra pension?  What are your objectives?

- extra annual income in retirement that’s protected against inflation?
- a lump sum?
- flexibility to access earlier than your normal retirement age?
- more control of your investment choices?

All of the answers above are correct for different objectives.

squirrelpie

PropertyGuru_Wannabe said:

L & G workplace pension most definitely. The 10% matched contribution is too good to ignore.

I think the OP already has taken the 10% matching. I don't think there's any more to be had?

Albermarle

I am 40 and have two jobs, Plan would be to try retire a bit earlier if possible

What do you mean by a 'bit earlier' ? 50; 55; 60; 63 ? It makes a difference.

ivyboy

bjorn_toby_wilde said:

Surely the key question is what do you want to do with the extra pension?  What are your objectives?

- extra annual income in retirement that’s protected against inflation?
- a lump sum?
- flexibility to access earlier than your normal retirement age?
- more control of your investment choices?

All of the answers above are correct for different objectives.

I don't really know the true answer to that. I suppose the main goal is getting to retirement age and when that day comes, have the flexibility to do what you want, when you want but earlier than state retirement age. Don't think would be looking for lump sum. But guarantee against inflation in retirement is also a good thing.

What ever age retirement happens to be in the future. I just want to have enough built up in back ground to go for it early and be comfortable. I think the Fire service one, can take from 55 at reduced rate. Not sure on L & G would think 57 atm. 

I suppose thinking now 57 or 58 depending what it is. Then slow down and live a off the pensions a bit, also build up a isa and investments that can be drawn on also.