Pensions

[Wolfie]

Not a topic I find exciting at all but I'm just in the process of joining a new pension with my employers, who are just starting to implement a corporate scheme.

I've paid into a pension for about 15 years (I'm 42) or so but then took a break just over a year ago when I moved to my current employer, who were a small SME and didn't have anything in place until now.

Something I learnt for the first time yesterday (in my meeting with the advisor) is that you can do a salary sacrifice for your pension contributions, which means that you also get back the National Insurance that you would have paid and it boosts your contributions quite a lot while not affecting your bottom line as much. Your employer can also choose to add their NI contribution to your pot as well - though this is at their discretion. The only downside I can see is that your official stated salary will be lower, so might affect any mortgage offers if you need one.

I'm just putting this out there because in all my years with a pension, I never knew about this and no other company or advisor has given me this option in the past & thought it might be useful to you guys. Of course you all may be aware of this and I've just had really bad advice over the years.

I'm also curious as to what provisions some of you have in place. You hear all the time about people having no private pension at all and wondered how prevalent that is in the real world.

[froggg]

Sadly most of us will have to work till we drop, no doubt with the rise in life expectancy we'll all be working past 70 before getting the state pension.... hundred quid a week or so for what it's worth, no wonder pensioners are having to choose food or heat under the Tories.

[Rev]

Don't have a pension myself, but I know a good rule of thumb is to make contributions equal to half your age at the time you start your pension, eg start at 20 put 10% salary in, start at 50 put 25% in, any less and it's not worth it.

My dad paid into pensions all his life, only for the pension provider to go bust before retirement, he's now 72 and still working 40hrs a week in heavy engineering, hence why I've not bothered, plenty of alternative options out there to paying into a pension.

Forgot to add @Wolfie, is the advisor you mentioned an Independent one, or one supplied by your firms choice of pension provider?  If the latter, take everything they say with a pinch of salt, get proper independent advice, or at least research as well as you can before making a decision.

Moneysavingexpert.com is always a good place to start.

[GboroRam]

Salary sacrifice shouldn't affect your ability to get a mortgage as the bank will realise what your employer is doing. My employer started doing it a couple of years ago and it is a no brainer from my understanding. Basically it's a way to pay less tax and every year experts predict it'll be scrapped but it remains as to scrap it may be seen as detrimental to encouraging people to pay into a pension. 

[Gritstone Ram]

I do the salary sacrifice and it didn't affect my mortgage.

[ColonelBlimp]

No pension and no mortgage at 47, I'm ****** aren't I? Pass the pills.