starting a pension

strangeglue

I have just accepted my first job, and now need to let them know what % of my salary I want going in to my pension.

They'll match up to 5%, so am i right in thinking that's the most sensible % to choose to put in?

I can't go any higher as I'm only going to be earning £22k, and need to cover rent etc.

Would it be possible to go in even lower (say 3%) and then bump it higher once my salary increases after probation?

TIA

dunstonh

5% makes sense as it matches the free money. It wont actually cost you 5% though as you get tax relief on the contribution. The net cost is 4% to you.

Would it be possible to go in even lower (say 3%) and then bump it higher once my salary increases after probation?

Its possible but wasteful. You would be throwing away free money. Especially when you consider that 1% is £18 from the company and £14 from you (plus £4 from tax relief).

CLAPTON

if the scheme is contracted out of the state second pension scheme, then you pay less NI contributions.. i.e. 9.4% instead of 11% so the 'real' cost to you is even less than 4% quoted by dunstonh... pay the full 5%