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  • FIRST POST
    • Puddylove
    • By Puddylove 29th Sep 17, 10:54 PM
    • 489Posts
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    Puddylove
    Adding to USS pension - or save elsewhere?
    • #1
    • 29th Sep 17, 10:54 PM
    Adding to USS pension - or save elsewhere? 29th Sep 17 at 10:54 PM
    Hi all
    I posted about pensions a little while ago, and you were all incredibly helpful, so thank you.
    Now I want to put a little extra aside, and was poised to pay 1% more into the USS Investment Builder when I received an email telling me that USS are seeking further contributions (again) either from employees or employers, to rectify a shortfall.
    Should I be worried?
    Would I be better putting money into something like VLS instead? I was thinking of just upping it every year I get a pay rise.
    I'm a higher rate tax payer, like my work and plan to retire no sooner than 15 years from now if not later (health permitting, of course).
    I'd welcome your thoughts.
Page 1
    • Southend1
    • By Southend1 1st Oct 17, 1:08 PM
    • 3,232 Posts
    • 3,079 Thanks
    Southend1
    • #2
    • 1st Oct 17, 1:08 PM
    • #2
    • 1st Oct 17, 1:08 PM
    Your additional contributions to a DC pot (Investment Builder) are separate from the DB section which is in deficit. As such they are unaffected by the ongoing consultations around increasing contributions or reducing benefits for the DB section. So nothing to worry about in that regard.
    • dunroving
    • By dunroving 1st Oct 17, 3:52 PM
    • 1,268 Posts
    • 881 Thanks
    dunroving
    • #3
    • 1st Oct 17, 3:52 PM
    • #3
    • 1st Oct 17, 3:52 PM
    My understanding is that USS will match the first 1% of MPAVCs so definitely, yes. You will double your investment immediately.
    • Puddylove
    • By Puddylove 1st Oct 17, 10:13 PM
    • 489 Posts
    • 799 Thanks
    Puddylove
    • #4
    • 1st Oct 17, 10:13 PM
    • #4
    • 1st Oct 17, 10:13 PM
    Dunroving - yes, that's true but I'm already doing that 1%, and unfortunately the employer won't match any additional percentage I pay in.

    Southend1 - that's a good point, so adding to my investment builder will be unaffected.

    I suppose if i put money into a VLS S and S ISA instead. I'd have more flexibility, but is that worth losing the tax back?
    • kidmugsy
    • By kidmugsy 2nd Oct 17, 12:29 AM
    • 11,070 Posts
    • 7,626 Thanks
    kidmugsy
    • #5
    • 2nd Oct 17, 12:29 AM
    • #5
    • 2nd Oct 17, 12:29 AM
    Do you contribute by salary sacrifice?

    If so, do you harvest any of the employer's forgone National Insurance contribution?
    • Puddylove
    • By Puddylove 2nd Oct 17, 12:42 AM
    • 489 Posts
    • 799 Thanks
    Puddylove
    • #6
    • 2nd Oct 17, 12:42 AM
    • #6
    • 2nd Oct 17, 12:42 AM
    I do salary sacrifice, yes, but I don't know what you mean by harvesting the employer's NI contributions?
    • AnotherJoe
    • By AnotherJoe 2nd Oct 17, 7:47 AM
    • 9,852 Posts
    • 11,015 Thanks
    AnotherJoe
    • #7
    • 2nd Oct 17, 7:47 AM
    • #7
    • 2nd Oct 17, 7:47 AM
    Dunroving - yes, that's true but I'm already doing that 1%, and unfortunately the employer won't match any additional percentage I pay in.

    Southend1 - that's a good point, so adding to my investment builder will be unaffected.

    I suppose if i put money into a VLS S and S ISA instead. I'd have more flexibility, but is that worth losing the tax back?
    Originally posted by Puddylove
    You could get the tax break by investing into a SIPP. Desmt need to be an ISA.
    • kidmugsy
    • By kidmugsy 2nd Oct 17, 12:34 PM
    • 11,070 Posts
    • 7,626 Thanks
    kidmugsy
    • #8
    • 2nd Oct 17, 12:34 PM
    • #8
    • 2nd Oct 17, 12:34 PM
    I do salary sacrifice, yes, but I don't know what you mean by harvesting the employer's NI contributions?
    Originally posted by Puddylove
    Salary sacrifice saves you making your own employee contribution on the sacrificed salary, and it also saves the employer his. Some employers direct part of their savings into their employees' pensions.
    • Puddylove
    • By Puddylove 10th Oct 17, 10:28 PM
    • 489 Posts
    • 799 Thanks
    Puddylove
    • #9
    • 10th Oct 17, 10:28 PM
    • #9
    • 10th Oct 17, 10:28 PM
    Just wanted to say how much I appreciate the help I've been given here.
    I decided to increase my pension contributions by salary sacrifice, and also to open a Stocks and Shares ISA.
    • swindiff
    • By swindiff 22nd Jan 18, 11:48 AM
    • 325 Posts
    • 132 Thanks
    swindiff
    I have started putting extra into the investment builder part of the USS pension. My employer also offers salary sacrifice so as a standard rate taxpayer I immediately save 32% on my contributions. 20% tax and 12% NI. An added bonus is that all the fees for investing are taken care of by the employer.

    I started off just by taking the match to get the extra 1% from my employer, but in the last few months I have increased it more and more and am now up to contributing an extra 15% to the investment builder.

    Due to the match, tax and NI savings and good performance from the invested funds my pot is worth double what it has actually cost me in the form of reduced take-home pay. My intention is to continue to increase my contributions when I can, any future pay increases I intend to divert to the investment builder. The hope is that there will be enough in there for me to retire at 60, draw on the investment builder for income and defer taking the DB part of the pension as long as I can to minimise actuarial reductions, if that is allowed.
    Last edited by swindiff; 22-01-2018 at 11:56 AM.
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