Best private pension?

rubberduck · 31 Jul 2016 at 17:43

After reading this thread I went away and checked my pension to find my company put in 25.5% and I put in 3%... Seems above average so I will certainly be factoring this in when/if I change jobs in the future

RomanNose · 31 Jul 2016 at 18:32

rubberduck said:
After reading this thread I went away and checked my pension to find my company put in 25.5% and I put in 3%... Seems above average so I will certainly be factoring this in when/if I change jobs in the future

That's incredible.
My company contributes the minimum, about 1.5%. I am personally contributing 15% which means my salary is diminished significantly -_-

Am totally looking for a new job due to this and crazy amounts of overtime that's expected.

Selekt0r · 31 Jul 2016 at 20:26

rubberduck said:
After reading this thread I went away and checked my pension to find my company put in 25.5% and I put in 3%... Seems above average so I will certainly be factoring this in when/if I change jobs in the future

I've been with my company (big U.S. IT/database provider) for >16 years so am still on their 'legacy' pension scheme where they match up to 6% and then top-up with an additional 9.5%. So I get a total 21.5% contribution for putting 6% in myself. New starters go onto a new scheme which is nowhere near as generous.

Even this is still much less than it used to be - the top-up used to be 19% ( so total 31% for 6% contribution :eek:

).

I agree that it makes a move to another company, often with substantially lower pension contributions much less appealing even if the rest of the package is better.

Mikeyboy · 31 Jul 2016 at 21:03

My employer pays 6.2 times what its employees pay.

I currently pay 5%. Contemplating AVCs.

muon · 31 Jul 2016 at 21:36

Mikeyboy said:
My employer pays 6.2 times what its employees pay.

I currently pay 5%. Contemplating AVCs.

Err, wth. That's probably better than final salary schemes.

No cap on 6.2x matching?

The_Abyss · 31 Jul 2016 at 22:31

El Pew said:
You can make withdrawals as often as you like, you just have to declare all withdrawals on your tax return.

Only if you are required to do a tax return. Pension drawdown payments are taxed through PAYE.

The_Abyss · 31 Jul 2016 at 22:31

muon said:
Err, wth. That's probably better than final salary schemes.

No cap on 6.2x matching?

Don't forget the effective annual allowance cap of £40,000.

Mikeyboy · 31 Jul 2016 at 22:39

muon said:
Err, wth. That's probably better than final salary schemes.

No cap on 6.2x matching?

Capped when pensionable salary reaches £150,600.

muon · 31 Jul 2016 at 22:48

Mikeyboy said:
Capped when pensionable salary reaches £150,600.

So you could make a contribution of 10% and your employer will contribute 6.2x that?

The_Abyss said:
Don't forget the effective annual allowance cap of £40,000.

Meh, that's a pretty high limit still.

bainbridge · 31 Jul 2016 at 22:55

If I reach retirement age I'm screwed.

SpeedFreak · 31 Jul 2016 at 23:03

muon said:
Pensions with global equities in their portfolio have soared in the last 6 months.

World stock markets are buoyant and sterling has dropped 11% since the beginning of the year.

50:50 funds (UK Equities and Global Equities) have increased 18% YTD.

Here's the benchmark used by these funds.

https://www.trustnet.com/Investments/SectorProfile.aspx?code=A:ABIGBLEQ&univ=A

From what I've seen these are the types of funds a lot of company pensions are using when still far away from retirement.

I self manage my fund and had a lot in overseas equities and index linked gilts just before the Brexit vote. I was up 10% in 5 days.

The_Abyss · 31 Jul 2016 at 23:10

And that's probably just on the current exchange rates!

valkynaz · 1 Aug 2016 at 00:32

My employer only matches up to 2%. I haven't bothered setting one up with them yet. It would seem better to go private.

The_Abyss · 1 Aug 2016 at 01:17

Unless a private / personal pension pays the same 2% as your employer (and none do) it really isn't better at all. You can always just set up your employer pension and transfer the fund away to a private pension whenever you want.

Clearcut · 1 Aug 2016 at 07:04

NHS.
Me: 9.3%
Them: 14.3%

The_Abyss · 1 Aug 2016 at 09:24

Clearcut said:
NHS.
Me: 9.3%
The taxpayer: whatever percentage is required to pay the future guaranteed benefits provided by your pension

Fixed for you.

SpeedFreak · 1 Aug 2016 at 10:01

The_Abyss said:
And that's probably just on the current exchange rates!

Pretty much this. Overseas funds were down, but in sterling terms up significantly. Once they recovered a bit I then switched to UK Equities and have seen another 2.5-3% upside. It was a bit of luck and a bit of judgement. I thought a Brexit vote was possible but that the FTSE was only slightly depressed due to the high expectation of a remain vote. It seemed relatively low risk.

Clearcut · 1 Aug 2016 at 11:05

The_Abyss said:
Fixed for you.

Make me feel cheap why don't you.

ExRayTed · 1 Aug 2016 at 12:54

I have a railway final salary pension that I've been contributing to for the last 20 years. No idea how good it is in comparison to private pensions though..I really suck at finances

Andy90 · 1 Aug 2016 at 16:34

I've just had my figures through for my pension, currently I pay just over 14% of my wage into it and the Government top it up (Police Pension). I retire in 10 months. Without taking a lump sum its £25k pre tax.

Max lump sum is just under £145k, but pension drops per annum to about £18300. I would end up paying nearly £5400 tax on lump sum.

I can however take a lesser lump sum of £129k (pay no tax on that) and get a slightly higher pension of around £19300. I can of course set what lump sum I want between 0 and the max and the pension would be worked out from that.

It all gets linked to RPI at the age of 55 as well

Thankfully I'm one of the lucky ones that were fully protected with the ability to retire at 30 years service rather than having to work till 60 for the new lower career average pension.