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  • FIRST POST
    • BigTerryWogan
    • By BigTerryWogan 8th Mar 18, 6:08 PM
    • 25Posts
    • 5Thanks
    BigTerryWogan
    workplace pension vs private pension or both
    • #1
    • 8th Mar 18, 6:08 PM
    workplace pension vs private pension or both 8th Mar 18 at 6:08 PM
    Hello all,

    I know there are financial wizards in the kingdom of MSE forum. I'm due to change jobs again and want to get things right this time round.

    In summary
    38 years old, little to no pension pot to date.
    Currently financially stable, hoping to be mortgage free before 60.

    Can afford to pay 250 into my new work's pension each month and would still have roughly 5K available to invest.

    should i contribute more than the 250 and not bother investing elsewhere as well, what about getting another pension.

    Really don't know what to do for the best

    Thanks in advance
    Natural stupidity is better than artificial intelligence
Page 1
    • xylophone
    • By xylophone 8th Mar 18, 6:13 PM
    • 25,371 Posts
    • 14,967 Thanks
    xylophone
    • #2
    • 8th Mar 18, 6:13 PM
    • #2
    • 8th Mar 18, 6:13 PM
    little to no pension pot to date.
    What do you have?

    If you contribute more to your new company pension will the employer match it?

    You mention 5000 - what exactly is this?
    • Brynsam
    • By Brynsam 8th Mar 18, 6:13 PM
    • 936 Posts
    • 606 Thanks
    Brynsam
    • #3
    • 8th Mar 18, 6:13 PM
    • #3
    • 8th Mar 18, 6:13 PM
    Why another pension - why not pay more into your employer's scheme? Check if they will pay more if you pay more; even if they don't, if the charges are comparable to other pension schemes, there seems little need to complicate things by collecting pension schemes for the sake of it.

    Presume you mean you have a one-off lump sum of 5K to invest, not 5K per month (happy thought!). Before tying it up in a pension, do you have an adequate rainy day fund? If not, an ISA might be a better idea.
    • MallyGirl
    • By MallyGirl 8th Mar 18, 6:27 PM
    • 2,682 Posts
    • 7,684 Thanks
    MallyGirl
    • #4
    • 8th Mar 18, 6:27 PM
    • #4
    • 8th Mar 18, 6:27 PM
    I would check out how the company pension is invested and see if you are happy with that. Are there many options to choose from if not?

    Do you contribute via salary sacrifice as that gets you more bang for your buck?

    Does the scheme allow you to contribute more?

    Once you know these things you will be better equipped to get good suggestions.

    For example I can salary sacrifice so I save on NI, DH does even better and gets employer NI too. I can change my pension contribution amount every month (and do for various reasons). I am OK with the choice of funds as I can compensate with a SIPP and ISA to get an overall portfolio that I am happy with.
    • BigTerryWogan
    • By BigTerryWogan 8th Mar 18, 6:31 PM
    • 25 Posts
    • 5 Thanks
    BigTerryWogan
    • #5
    • 8th Mar 18, 6:31 PM
    • #5
    • 8th Mar 18, 6:31 PM
    ok, didn't want to bore all with life story, but guess you need more to go on. lol

    have less than 3K in previous pension schemes.

    have 5K disposable (and 5K rainy day money) just sat in current acct doing nothing, small family and OH is very solvent. Basically looking to better protect myself and help add to "our" future opportunities.

    we own over 60% of house already.

    my concerns is if i pay more into pension then that's tied up till retirement.

    unfortunately don't know the full details of my new employer's pension. Have based my estimates on 12% from me and 3% from them.

    does that help?
    Natural stupidity is better than artificial intelligence
    • xylophone
    • By xylophone 8th Mar 18, 6:52 PM
    • 25,371 Posts
    • 14,967 Thanks
    xylophone
    • #6
    • 8th Mar 18, 6:52 PM
    • #6
    • 8th Mar 18, 6:52 PM
    It might be possible to transfer the old pension into the new.

    You say that your OH is "very solvent" but is the 10,000 (?) you mention your only joint savings?

    If so, it is really an emergency fund - if eligible, you and your OH might consider each opening a sole Nationwide Flexdirect account and a joint for a year to get 5% interest and a sole TSB Plus current account each.

    You can cycle the required inputs from TSB to NW and back again.

    You and your OH might also wish to consider a Flex monthly saver each.
    • BigTerryWogan
    • By BigTerryWogan 8th Mar 18, 7:00 PM
    • 25 Posts
    • 5 Thanks
    BigTerryWogan
    • #7
    • 8th Mar 18, 7:00 PM
    • #7
    • 8th Mar 18, 7:00 PM

    You say that your OH is "very solvent" but is the 10,000 (?) you mention your only joint savings?
    Originally posted by xylophone
    10,000 is mine.

    we have joint acct for bills and bit extra.

    OH is the other end of the spectrum. she has big pension pot already, shares and share options with current employer. 3-4 times the income of myself.

    plan was to split my 10k ( 5k as rainy day and 5 as investment option.
    Natural stupidity is better than artificial intelligence
    • Alexland
    • By Alexland 8th Mar 18, 7:50 PM
    • 2,388 Posts
    • 1,789 Thanks
    Alexland
    • #8
    • 8th Mar 18, 7:50 PM
    • #8
    • 8th Mar 18, 7:50 PM
    We don't know your income or lifestyle but if at 38 you only have DC pension pot(s) of 3k you are very much behind in your retirement provision and should consider significant additional contribution to catch-up.

    Again without knowing the details of your workplace pension or your proposed alternative it is hard to comment but I find it works well to make additional contributions into my workplace pension (to get employer matching, salary sacrifice, etc) and then do lump sum transfers every few years into a SIPP where I can invest with more freedom.

    Alex.
    • PeacefulWaters
    • By PeacefulWaters 8th Mar 18, 7:58 PM
    • 8,320 Posts
    • 10,638 Thanks
    PeacefulWaters
    • #9
    • 8th Mar 18, 7:58 PM
    • #9
    • 8th Mar 18, 7:58 PM
    don't know the full details of my new employer's pension
    Politely, find out. How on earth do you expect a straight answer otherwise?
    • BigTerryWogan
    • By BigTerryWogan 8th Mar 18, 8:02 PM
    • 25 Posts
    • 5 Thanks
    BigTerryWogan
    thanks everyone so far, i had expected to have an answer to specific pension breakdown but individual on A/L, tried to get ahead of the 8 ball and this has helped with questions for them if and when they call tomorrow.
    Natural stupidity is better than artificial intelligence
    • AlanP
    • By AlanP 8th Mar 18, 8:17 PM
    • 1,178 Posts
    • 850 Thanks
    AlanP
    Considering your OH for a moment.

    Great that they have good income, shares, share options and pension but they are very reliant on their employer.

    I used to work for a computer company in the early 90s when they had almost a 100k employees across the globe and share price had been on an upward trajectory.

    Lots of my colleagues had great salaries and shares bought through discount scheme. When company fell off cliff they ended up redundant with worthless shares.

    Would you invest in the shares of a single company normally? Diversification would be a less risky option.
    • BigTerryWogan
    • By BigTerryWogan 8th Mar 18, 8:26 PM
    • 25 Posts
    • 5 Thanks
    BigTerryWogan
    bang on Al, however she is tied in for a fixed term, once that period has gone she/we will look at other option.

    Not to mention the possibility of trading myself in for a younger model.
    Natural stupidity is better than artificial intelligence
    • Terron
    • By Terron 8th Mar 18, 10:12 PM
    • 219 Posts
    • 192 Thanks
    Terron
    I used to work for a computer company in the early 90s when they had almost a 100k employees across the globe and share price had been on an upward trajectory.
    Originally posted by AlanP
    So did I . My employer's name began with D.
    I was in the company share scheme, but sold them after my job was sold. I also got some shares in my new employer, until their share scheme was stopped. I held on to them until I lost my job with them, by which time the share price had almost recovered from the dot com crash. I sold most but still have some, which have increased by 25% since I sold the others.
    • AlanP
    • By AlanP 9th Mar 18, 10:10 AM
    • 1,178 Posts
    • 850 Thanks
    AlanP
    So did I . My employer's name began with D.
    I was in the company share scheme, but sold them after my job was sold. I also got some shares in my new employer, until their share scheme was stopped. I held on to them until I lost my job with them, by which time the share price had almost recovered from the dot com crash. I sold most but still have some, which have increased by 25% since I sold the others.
    Originally posted by Terron
    Mine began with a D as well

    I had a small amount in ShareSave scheme but always sold out when time was up. Young family, wife at home needed the money so no conscious decision around taking on too much risk associated with one company.

    Some of the guy who were in their 50's then had a fortune tied up in the shares and lost heavily as it went down the pan. That, coupled with the way the pension scheme has been run over the last 15 or so years, has put them into a very different retirement scenario than they envisaged.
    • SouthLondonUser
    • By SouthLondonUser 9th Mar 18, 12:04 PM
    • 492 Posts
    • 67 Thanks
    SouthLondonUser
    As others have said, you haven't given a lot of information, and at your age you are significantly behind in terms of pension savings. Some thoughts:

    Get whatever you can from your employer. Some employers match your contributions up to a certain %.

    Once you have maxed out what your employer will contribute, if you can still contribute more, doing so via your company pension has the advantage of saving you national insurance via salary sacrifice. If you were to invest the same money in another pension, you'd get tax relief but you wouldn't get relief on national insurance. It has the disadvantages of more limited choices and typically higher fees than you can get in a SIPP, but the NI saving may easily offset these. Also, you should be able to transfer at least part of your money away from the company scheme and into a SIPP even when you are still employed by them. Of course salary sacrifice means you commit to contributing the same every month; if you want to do one-off contributions at the end of the year, depending on how much you have spent and saved in the year, then you cannot do salary sacrifice.
    • greenglide
    • By greenglide 9th Mar 18, 7:51 PM
    • 3,096 Posts
    • 2,015 Thanks
    greenglide
    Mine began with a D as well
    Compaq, HP, etc involved then?

    So the pension scheme is now with HP, having been left behind when they split into HP and Hewlett Packard Enterprise which then merged with CSC to become DXC technology.
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