Saving for the future - advice required

emoh · 12 December 2019 at 5:22PM

Hi all, I am looking for some advice on where to put my money for long term savings/retirement.

I recently changed jobs and pay 4% into a pension fund with my employer matching this amount...this is the maximum that they contribute.
My previous employer contributed 8%.
Basically, I am looking to make up the smaller percentage that my new company contributes but I don't know what my best options are.

Should I increase my own contribution into my work place pension or is there a better alternative?

I also save into a stocks and shares ISA but wondering if I there are other options like a SIPP?

Thanks!

Linton · 12 December 2019 at 5:30PM

You can set up yor own SIPP or Personal Pension if you wish and pay contributions into it. It is probably least hassle just to pay the extra into your company scheme. So look at charges and the range of investment funds you would be likely to use. Unless a SIPP or PP is significantly better I would use the company scheme.

emoh · 12 December 2019 at 5:46PM

Thanks for the advice - this is what I reckon is the best option for open to hear from anyone with more experience.

I have read that there are tax benefits as the money invested into a SIPP invested pre-tax for example, if I invest £100 into a SIPP it really only costs £80

Linton · 12 December 2019 at 5:54PM

emoh wrote: »

Thanks for the advice - this is what I reckon is the best option for open to hear from anyone with more experience.

I have read that there are tax benefits as the money invested into a SIPP invested pre-tax for example, if I invest £100 into a SIPP it really only costs £80

To get £100 into a SIPP or PP you pay in £80 from taxed money and HMRC return the tax by adding in £20. However assuming your employer calculates tax after deducting pension contributions the tax on the £100 contribution is never paid in the first place. So both contributions work out the same - you get £100 in your pension and dont pay tax on it.

However it can make a difference were you to pay so much into your pension that you leave less than your tax allowance. If you pay into a SIPP/PP you get basic rate tax refunded even though you did not pay tax on it all in the first place. But I guess you aren't going that far.

girllikeme1 · 13 December 2019 at 3:57PM

If you're under 40 have you looked into a Stocks and Shares LISA? You can contribute until you're 50, and access it at 60.

The government tops up your contributions by 25%.

MallyGirl · 13 December 2019 at 4:23PM

if your new employer offers pension contribution via salary sacrifice then you would benefit from the NI saving as well with the company pension but not with a PP or SIPP.

enthusiasticsaver · 14 December 2019 at 1:32PM

I think if you are already maximising your employers contribution into your occupational pension then using a separate stream of income in retirement would be a good idea but it depends on circumstances.

How old are you and are you aiming to retire earlier than your normal retirement date?
Do you have other old pensions which might be worth transferring and do you expect to stay with your current employer until retirement?
Are you a higher rate tax payer and do you expect to pay tax in retirement?
Are you married?

Lots of questions I know but they are all relevant in deciding how to invest for retirement.

Saving for the future - advice required

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