MegaSack DRAW - This year's winner is user - rgwb
We will be in touch
so my final salary pension is being closed with the options of a 9k cash payment after tax or if I put it into the new DC scheme I get access to a higher contribution tier from the company . Currently have 21 years in my final salary worth about 10k a year and the higher tier looks to be about worth an extra 60 to 70 k in my dc pot (in today’s money ) so obviously the higher tier is a better option money wise but whilst we’re not skint 9k now would give us a bit of a lift and allow us to change a few things around to give us a bit more cash every month , plus coke hookers and one of those new cotics.
37 with 2 young kids , plenty left on the mortgage
What do you reckon ? Live for the now or be sensible
I'm 52 - I wish I'd put more in my pension pot 15 years ago but as you say, life's expensive when you have a young family. As it's money you've not yet 'got' I'd probably go for the enhanced pension but really you shoudl see an appropriately qualified IFA for advice.
Boring, but I'd probably put it into the new pension if you can afford to.
21 years in your final salary scheme? So you started it at 16? Seems young, but fair enough. I assume you keep the benefits accrued to date (i.e the 10k per year)?
Anyhoo, I'd probably stick it in the pension. It's money you didn't have before, so in theory you won't miss, but will be more beneficial in the future.
Yeah started at 16 and still there although remembering back I’m nor sure I could join the pension till 18 . Final salary is closing to future accruals so everything to this point is safe .
i know what the sensible thing to do is but I can’t see me ever getting an extra 9k in a pay packet again and there is this nagging thing in the back of my mind saying sod it
Put it in your pension. You'll have a flatter earnings curve, but might be then easier to sustain
pension I'm afraid.
+1 for the pension.
Was in exactly the same situation several years ago.
A few younger colleagues with debts took the cash but those who didn't really need £9k right now ploughed it back into their pensions. It's paid off.
Keep what you have in the DB.
I would be asking if the company is providing free independent advice to DB fund members? It's a big step for employees to take that sort of decision without any guidance.
Is company financially secure and independent; possible takeover or merger target?
The DB scheme is closing to future accruals so just stays where it is , on April first everyone joins the new scheme so no transfer of funds between the two schemes .
Pretty much a common consensus then 😀
Not very glamorous but either knock it off what you owe on the mortgage, or stick it in the pension pot.
Sounds like you work for the same company as me. I’m on the new pension though not the DB one. Unlocking the higher contributions is a no-brainier IMHO.
Will you pay tax on the £9k if you take it as cash? I'd go with adding it to the pension pot - knowing what I know now (I'm 61) I'd take every opportunity to grow the pension.....
Another option would be to invest it into a SIPP. There are annual charges but you can invest the way you want. I did it with one of my pensions from a previous employer. My investments have performed well.
Get professional advice before you do it. Worth a couple of hundred in fees imo.
(Pension or mortgage would be my take)
Oh, and do your research on what is advised.
I moved my pension investments to a new fund mix last year, and opted out of the fund my company uses. Company/colleagues have seen 5% this year, my statement showed 17.5% growth this year 😊, despite not being a high risk fund... (Who knew green and green tech was a good investment....)
>>Unlocking the higher contributions is a no-brainier IMHO.
Very much this +1
If it is as I think, there are 2 options. Take 12 k as cash (£9k after tax) or put the 12k into your new DC pension.
If you put it into your pension, you unlock higher employer contributions to the DC pension. Numbers vary for different parts of the company, but say 10%company/5%personal as opposed to 6%/3%.
In this instance a SIPP is pointless as it misses unlocking the higher rates. Is £9k now really worth losing £70k in your pot(from the figures you quoted)?
My response is - it depends. How is your current pension projection looking? If it is healthy and you aren't worried you'll be in poverty when you retire, I'd take the cash now and make things a bit comfortable for the family. After all, you might not make it to your pension at all.
So by adding the £9k into the pension the firm makes additionl contributions you would not get otherwise (higher tier?) IF SO then put it in the pension
Pension and try not to die before you get it.
I'd take the boring option, says me sitting here in sunny Wales, with trails on the doorstep, retired at 54.
“ put it into the new DC scheme I get access to a higher contribution tier from the company “
To me this translates to “would you like some free money?”
Bit of a no brainier if I’m honest. By the time you add the tax relief and additional contributions from your employer you’ll be looking at an instant return that can’t be matched.
Hi dantsw13 , if your working for them as well and on the newer scheme already it’s pretty poor the way that group are being treated .
Im 99% sure it’s going into the pension , I think the higher contributions from the company would be the difference between retiring at 60 or maybe a bit earlier and having to keep going to 65 .
thanks all
While the pension gurus are in the house may I hi-jack a little.
It's time to remortgage my rental prop.
Should I make the mortgage Let to Buy (paying off the capital) or should I kept it Buy to let and put the extra money into pension/isa..... I'm aware of the tax issue on monies generated from the property, but Im fortunate that it grosses enough to make the net still a decent amount.