Salary sacrifice for pension
Discussion
What is the usual salary percentage sacrifice in pct terms? 2-5%? I know it is down to each individuals commitments etc, but I've usually just put £50 a month into my DC plan, but moving to a new pension provider they are asking for % terms.
Edited by UncappedTag on Monday 27th July 16:02
UncappedTag said:
Mx_Stu said:
Are you asking for a guide to what people put in?
I have always worked to half your age in % terms, so for example I am 27 and I contribute 13.5% of my gross salary.
As high as that!?! Do you have a mortgage etc?I have always worked to half your age in % terms, so for example I am 27 and I contribute 13.5% of my gross salary.
IanMorewood said:
UncappedTag said:
Mx_Stu said:
Are you asking for a guide to what people put in?
I have always worked to half your age in % terms, so for example I am 27 and I contribute 13.5% of my gross salary.
As high as that!?! Do you have a mortgage etc?I have always worked to half your age in % terms, so for example I am 27 and I contribute 13.5% of my gross salary.
IanMorewood said:
UncappedTag said:
Mx_Stu said:
Are you asking for a guide to what people put in?
I have always worked to half your age in % terms, so for example I am 27 and I contribute 13.5% of my gross salary.
As high as that!?! Do you have a mortgage etc?I have always worked to half your age in % terms, so for example I am 27 and I contribute 13.5% of my gross salary.
Luckily I have a good employer who gave me the option, after completing my first year of service, to take a 10% pay rise or a 13% pension contribution. I took the pension contribution so each year I just elect to contribute the extra 0.5% from my gross salary.
The financial landscape has changed considerably since this article was published:
http://www.telegraph.co.uk/finance/personalfinance...
But it gives an idea of returns and a quote to backup my general rule of thumb approach:
"A good guide to follow is to aim to pay in about half your age as a percentage of your income. For example, if someone is starting their pension at the age of 20, 10 per cent - including any employer contribution - is a decent contribution to make. This would increase to 15 per cent at 30 and so on. "
Edited by Mx_Stu on Monday 27th July 16:25
I've been lucky have had 3 final salary jobs and have built up a fair number of years in each, in addition to this I have defined contribution pensions where I put in 6% which was matched by the company (I could have put in 4% but at that level they only put in 2% so I turned th screw the hardest at that 6% level).
In addition to any "pension" I put the £3.6k p.a. into a Cash ISA and have done (£3k previously) for as long as I can remember - this is untouched and unless something dire happens I will not touch this until i retire so I will have state pension £xk + final salay penions £xk + defined contribution pensions £xk + tax free Cash ISA's to take out.
The other thing is Im now currently settled in what could well be the forever home (only just moved in) and as its an offset mortgage were down to 15 years after 6 weeks in.... from a 25year term.
In addition to any "pension" I put the £3.6k p.a. into a Cash ISA and have done (£3k previously) for as long as I can remember - this is untouched and unless something dire happens I will not touch this until i retire so I will have state pension £xk + final salay penions £xk + defined contribution pensions £xk + tax free Cash ISA's to take out.
The other thing is Im now currently settled in what could well be the forever home (only just moved in) and as its an offset mortgage were down to 15 years after 6 weeks in.... from a 25year term.
edc said:
I read the title and thought the thread would be about pension conributions on a salary sacrifice scheme ... more savings to be had there.
Thats how our contributions operate, instant tax relief and the NIC saving by the employer making the contribution rather than the employee.I suspect that most pensions mentioned here aren't salary sacrifice. Just dug out this quick link via Google http://www.whitingandpartners.co.uk/content/salary...
I used in work specifically in employment taxes and we would talk to companies about salary sacrifice for pensions. Biggest barriers to change we used to find were:
a) People are sceptical when anything is discussed about pensions as they think the company is only in it to screw over employees and save money; and
b) If there are unions involved they point blank refuse to discuss any changes to the pension scheme.
a) People are sceptical when anything is discussed about pensions as they think the company is only in it to screw over employees and save money; and
b) If there are unions involved they point blank refuse to discuss any changes to the pension scheme.
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