I have a private pension plan, but my new employer offers a pension scheme. Should I join this or continue with my own?
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althomson
1 year ago
Expert Financial Adviser Answer
Paul Ross DipPFS CII(MP&ER)
answered 1 year ago
It is usually best advice to join your employers scheme, especially if they're contributing to it. For instance, if your employer will match your contribution, on a 3% basis and you are on £30k, that will mean he pays £75 per month, you pay £60 and you receive £15 tax relief from the government. So, you pay £60 and you have £90 going into your scheme
However, there are so many things to take into account such as charges from your pension and what is on offer from your employer, the fund you're in and how it compares to your employer's.
This is an area where you really ought to speak to a financial adviser. Most IFA's don't charge for an initial consultation, so I would take advantage of that
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However, there are so many things to take into account such as charges from your pension and what is on offer from your employer, the fund you're in and how it compares to your employer's.
This is an area where you really ought to speak to a financial adviser. Most IFA's don't charge for an initial consultation, so I would take advantage of that
Expert Financial Adviser Answer
Dr David Carter FPFS
answered 1 year ago
It is clearly sensible in principle to contribute to the employer's scheme if the employer is also contributing, unless (and I can't see this) that scheme is so poor that its disadvantages outweigh the advantages.
If the employer is not contributing then you would need to compare the two schemes, and join the new one only if is better than the one you already hold (do take advice on that point).
There is nothing in the rules that stop you from contributing to both schemes at the same time (within limits), and you do not have to transfer the value of your own scheme into the new one.
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If the employer is not contributing then you would need to compare the two schemes, and join the new one only if is better than the one you already hold (do take advice on that point).
There is nothing in the rules that stop you from contributing to both schemes at the same time (within limits), and you do not have to transfer the value of your own scheme into the new one.
Expert Financial Adviser Answer
Darren Smith
answered 1 year ago
I fully concur with David's comments above.
often a downside to an employer scheme is the restricted investment choice but this will vary according to how the scheme was set up.
the main disadvantage is that the employer scheme will not "pay" for you to receive financial advice so if you are unsure, the only way to know for certain how to structure your membership is to be prepared to pay an IFA to give an unbiased appraisal of your options which might involve you keeping both schemes running, the employer sponsored one to get their contribution and then your current plan to take the excess of your available budget for pensions.
all of this assumes that the current scheme is the right one but that can be built into a proper review of your holdings!
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often a downside to an employer scheme is the restricted investment choice but this will vary according to how the scheme was set up.
the main disadvantage is that the employer scheme will not "pay" for you to receive financial advice so if you are unsure, the only way to know for certain how to structure your membership is to be prepared to pay an IFA to give an unbiased appraisal of your options which might involve you keeping both schemes running, the employer sponsored one to get their contribution and then your current plan to take the excess of your available budget for pensions.
all of this assumes that the current scheme is the right one but that can be built into a proper review of your holdings!
