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Higher salary or higher pension?

(5 Posts)
ProbablyJustGas Fri 26-Oct-12 11:00:11

WWYD? I've been offered a job with one of those gold-plated(ish) pensions that you hear about in the news. The salary they had offered was initially higher than what I am on just now. I told work about that offer, and work turned around and offered me a few grand more than place with the nice pension if I will please, please stay. So, if I stay, I would receive an 18.5% pay raise starting with next month's paycheck.

DH and I have also been TTC, which like several other people is not going quite so quickly as imagined, probably because I am 29 instead of 23. But if I took the job with the nice pension, we'd have to put those plans on hold for awhile. Well, I mean, technically we wouldn't have to, but I'd want to get settled in and claim the 52 weeks leave when it's my time.

The place with the handsome pension also has its salaries on grades - I think once you max it out, that's it, unless you get promoted to a new position with a new grade?

Am I silly for turning down a good pension in favor of a bigger check just now? confused

Ellypoo Fri 26-Oct-12 11:03:28

Do you have an occupational scheme with your current employer? If so, could you increase your contributions to this from your higher salary to increase your pension pot?

Is the job/employer better at the new place?

How definite is the 'gold plated' pension? Is it possible that they might remove it or cap it at some point in the future because they can't afford to pay it out?

It kind of depends on your long term plan really.

Ellypoo Fri 26-Oct-12 11:04:21

I meant to say, if you have a defined contribution scheme and can increase your contributions to say, 10% or 15% now, and you are a higher rate tax payer, it is a very tax-efficient way of saving for your future.

ProbablyJustGas Fri 26-Oct-12 11:26:34

Thanks. Yes, I could up my pension contributions with my current employer, that's something I can do every year if I wish to. I'm not yet a higher-rate tax payer, but that would be something to consider.

I'm not sure how definite the potential gold-plated pension is. It's USS, and they already had to change their pension scheme fairly recently, from final-salary to a career average, due to long-term sustatainability. But the fuzzy math in Excel last night came up with a potential final figure for me that's twice as high as the current place I'm at.

I am trying to keep in mind that I will probably not be working either where I am or at the potential new place for 35 years.

coocoocawhooOOOOO Fri 26-Oct-12 16:21:49

I'm in a similar position to you except for the pay rise offered. I've been offered a job at a slightly lower salary but with final salary pension with a very generous contribution (circa 17%).

Don't like my current job anymore as not very fulfilling, so am very happy to accept other position. Although less money, there are other benefits too: flexible working options, better maternity leave/pay ratio so when I and DH do finally decide to have second DC, will still be in a better position than slightly larger pay check now.

It does help that new job is also really interesting and I can't wait to get started. Fingers crossed that the references stack up aswill probably have to explain some sick leave.....

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