Does this seem like a sensible plan?

JayRitchie

Hi

Looks like you are in a great place! How much is your gross salary before pension contributions at present - and how much are the employers contributions? Are salary sacrifice arrangements and student loans a factor for consideration?

kimwp

JayRitchie said:

Hi

Looks like you are in a great place! How much is your gross salary before pension contributions at present - and how much are the employers contributions? Are salary sacrifice arrangements and student loans a factor for consideration?

Thank you, I hope so. Student loans paid off, currently I'm putting 40k ISH into pension through sal sac and employer contributions.

JayRitchie

kimwp said:

JayRitchie said:

Hi

Looks like you are in a great place! How much is your gross salary before pension contributions at present - and how much are the employers contributions? Are salary sacrifice arrangements and student loans a factor for consideration?

Thank you, I hope so. Student loans paid off, currently I'm putting 40k ISH into pension through sal sac and employer contributions.

From the thread it sounds like your salary sacrifice scheme benefits you by 28% putting money into pensions. So were you to change employer or want to put extra money in above salary sacrifice thresholds in the future this might reduce to 20%. So there is a real benefit to using pensions.

I would go with the suggestion from prior posters and build up more accessible funds. How much is your emergency fund? If it were me I'd try to build up ISA / other savings to cover a substantial emergency fund (£30k possibly - definitely so if you have a car or might need one in the future) then aim to have £20k a year for a few years.

The accessible savings would help you to retire early. Similarly - were some disaster to happen or a job loss in a recession its pretty nice knowing you have several years of pleasurable living before needing to be concerned.

The percentage cost vs sal sac pensions is real but doesn't seem large enough to me to take the risk.

kimwp

JayRitchie said:

kimwp said:

JayRitchie said:

Hi

Looks like you are in a great place! How much is your gross salary before pension contributions at present - and how much are the employers contributions? Are salary sacrifice arrangements and student loans a factor for consideration?

Thank you, I hope so. Student loans paid off, currently I'm putting 40k ISH into pension through sal sac and employer contributions.

From the thread it sounds like your salary sacrifice scheme benefits you by 28% putting money into pensions. So were you to change employer or want to put extra money in above salary sacrifice thresholds in the future this might reduce to 20%. So there is a real benefit to using pensions.

I would go with the suggestion from prior posters and build up more accessible funds. How much is your emergency fund? If it were me I'd try to build up ISA / other savings to cover a substantial emergency fund (£30k possibly - definitely so if you have a car or might need one in the future) then aim to have £20k a year for a few years.

The accessible savings would help you to retire early. Similarly - were some disaster to happen or a job loss in a recession its pretty nice knowing you have several years of pleasurable living before needing to be concerned.

The percentage cost vs sal sac pensions is real but doesn't seem large enough to me to take the risk.

Thanks Jay. My emergency fund is 18k (a year's spend plus 5k)

Dh6

It looks like you’re in a solid position Kimwp, with a £13k annual expenditure I assume you are mortgage and debt free? DH