Recently moved job - new pension fund questions

sunnyp

I recently moved jobs and am in the process of setting up my pension with my new employer.

My new employer will be contributing 10% of my gross salary into my pension and I have the choice as to the funds it will be invested in. My question is how much should I be contributing?

I am a higher rate taxpayer and have read somewhere that I should put away something like £360 per month in order to gain maximum tax relief. Does anyone have any advice as to how I can maximise the tax advantages of paying into my pension? I am fairly young and can afford to put a large sum every month toward my pension as my financial situation is pretty good.

Also, is there any advantage in transferring my pension from my old employer to my new scheme or would I be better off just leaving it alone till retirement?

Any advice would be appreciated.

Thanks

Sunny

meester

sunnyp wrote: »

I recently moved jobs and am in the process of setting up my pension with my new employer.

My new employer will be contributing 10% of my gross salary into my pension and I have the choice as to the funds it will be invested in. My question is how much should I be contributing?

I am a higher rate taxpayer and have read somewhere that I should put away something like £360 per month in order to gain maximum tax relief. Does anyone have any advice as to how I can maximise the tax advantages of paying into my pension? I am fairly young and can afford to put a large sum every month toward my pension as my financial situation is pretty good.

You can pay up to 100% of your salary into your pension.

Basically everything you earn above the higher rate allowance (which is the balance of your salary over approx £40k/year) would get 40% relief (you have to claim part of this back on your tax return).

So as a cap, you would want to pay no more than the balance of your salary over £40k. It's really up to you. But depending on age.

More important might be looking at the pension provider and your investment choices. Some of them are absolute dogs.

Another option is to invest in a SIPP outside of your employer scheme. If your employer scheme is not very good this would be a better option.

Also, is there any advantage in transferring my pension from my old employer to my new scheme or would I be better off just leaving it alone till retirement?

Depends on the schemes and costs. It's probably easier to have things in one place. One less address to change when you move.