Pensions advice
Discussion
I'm after some advice around my pension situation please. I'm 29 in a few months, a qualified Accountant (with Tax exam background and therefore should know better!) and work as a Finance Analyst.
I joined a small local company straight from college at 18 and began immediately paying money into the pension scheme they offered (a Scottish Widows PPP) with the employer putting some in also - I think 2% from me and 3% from them. I worked there from Aug 99 - Jan 2003 and the money that's in there is now worth in the region of £5k - half of that I'd say is from growth rather than contributions. From Jan 2003 to Dec 2006, I worked for 2 larger companies and paid into their company pension funds, with the employers also paying in generous sums of money (13.6% in one and 19.2% in the other!!). However, I didn't work for either company longer than 2 years so all my contributions were returned to me (a new house at the time meant that money was desperately needed; and spent - some £2.5k I believe although I have the documents at home) and I lost the contributions they made
In Dec 2006 I joined my present employer and have been paying into their pension ever since (5% from me, 7.5% from them - upped to 10% from them last month as they swapped to a Salary Sacrifice scheme) to which I've built up a fund of £14k or so.
My main queries at this stage are;
1) It seems daft to me to have 2 pension funds open - 2 things to administer + keeping on top of how the money in each of these is invested. What are my options with regard to the old Scottish Widows PPP? I seem to recall that I could possibly move my personal contributions from that plan into my current work one but then what would happen with my former employers contribution and also the governments opt-out payments that are also in there?
2) What to do with the 2 years / c.£2.5k of contributions I spent - should I pay these as a lump sum into my Scottish Widows pension (thereby getting tax relief on the contribution?) as I may have some spare cash at present that I don't want to spend but which will also do me no good sat in a savings account(!) or alternatively organise an AVC through my work pension scheme (if so, what's the tax break on these - anything?) OR do I just forget about it as investing any spare cash at present is a bad move? If the latter, would it be wise to make these contributions in future at some point or should I just forget about them?
Any advice would be welcomed, I'd rather not have to go to a Financial unless necessary. I've always been pleased that I've consistently paid into a pension fund but very few of my friends or partners have ever given it any thought - am I just frittering away loads of cash for no reason?
I joined a small local company straight from college at 18 and began immediately paying money into the pension scheme they offered (a Scottish Widows PPP) with the employer putting some in also - I think 2% from me and 3% from them. I worked there from Aug 99 - Jan 2003 and the money that's in there is now worth in the region of £5k - half of that I'd say is from growth rather than contributions. From Jan 2003 to Dec 2006, I worked for 2 larger companies and paid into their company pension funds, with the employers also paying in generous sums of money (13.6% in one and 19.2% in the other!!). However, I didn't work for either company longer than 2 years so all my contributions were returned to me (a new house at the time meant that money was desperately needed; and spent - some £2.5k I believe although I have the documents at home) and I lost the contributions they made
In Dec 2006 I joined my present employer and have been paying into their pension ever since (5% from me, 7.5% from them - upped to 10% from them last month as they swapped to a Salary Sacrifice scheme) to which I've built up a fund of £14k or so.My main queries at this stage are;
1) It seems daft to me to have 2 pension funds open - 2 things to administer + keeping on top of how the money in each of these is invested. What are my options with regard to the old Scottish Widows PPP? I seem to recall that I could possibly move my personal contributions from that plan into my current work one but then what would happen with my former employers contribution and also the governments opt-out payments that are also in there?
2) What to do with the 2 years / c.£2.5k of contributions I spent - should I pay these as a lump sum into my Scottish Widows pension (thereby getting tax relief on the contribution?) as I may have some spare cash at present that I don't want to spend but which will also do me no good sat in a savings account(!) or alternatively organise an AVC through my work pension scheme (if so, what's the tax break on these - anything?) OR do I just forget about it as investing any spare cash at present is a bad move? If the latter, would it be wise to make these contributions in future at some point or should I just forget about them?
Any advice would be welcomed, I'd rather not have to go to a Financial unless necessary. I've always been pleased that I've consistently paid into a pension fund but very few of my friends or partners have ever given it any thought - am I just frittering away loads of cash for no reason?
Wow, a very comprehensive reply! Much appreciated. Have bene on the 'phone and have got agreement form my work to transfer in my Scottish Widows pension so that clears that annoyance up (although I do appreciate the diversity aspect of having 2 but for now, 1 will do me).
I feel a bit more confident on my plans now, and more pelased that my money is going somewhere decent. I also contribute the max amount into our SIP which has built up a fund of £7k thus far (assuming I stay the statutory period etc etc) to help me along... the matchign shares make it like free money - i like!
Going back to the 2 years thing... so the first place offered to either hold the conts (mine and theirs) or do a refund and at the tiem i was desperate for the money altho i do regret that decision but it was right at the time, and the second place said it was their mandatory policy to offer a refund if you leave within 2 years You don't seem to set on the idea of the lump sum but perhaps on the AVCs... does it make financial sense to top that money back up over a period of time, i guess in theory the money will only grow in the long term so perhaps it would be a wise idea to cove roff those 2 elusive years?
I feel a bit more confident on my plans now, and more pelased that my money is going somewhere decent. I also contribute the max amount into our SIP which has built up a fund of £7k thus far (assuming I stay the statutory period etc etc) to help me along... the matchign shares make it like free money - i like!
Going back to the 2 years thing... so the first place offered to either hold the conts (mine and theirs) or do a refund and at the tiem i was desperate for the money altho i do regret that decision but it was right at the time, and the second place said it was their mandatory policy to offer a refund if you leave within 2 years
You don't seem to set on the idea of the lump sum but perhaps on the AVCs... does it make financial sense to top that money back up over a period of time, i guess in theory the money will only grow in the long term so perhaps it would be a wise idea to cove roff those 2 elusive years?Gassing Station | Finance | Top of Page | What's New | My Stuff