This is a terrible pension position isn’t it?!

[haengry]

I’m 38. I just got a letter from my private pension with the annual update and it says my pension value is currently 28k. For context I have been paying in since I was 25 and my employer makes a contribution too. We each pay it 4% a year so 8% in total. My starting salary was 30k and I’ve been on 60k the last two years and then in the fifties a few years prior to that. Surely it should be more? Does that literally mean I have 28k to my name if I was to retire tomorrow?!

@slithytoveisascientist ehen you mean you claim it - do you mean that it adjusts the tax you have to pay overall? Or does that 20% have to be paid into the pension?

I think it comes back as a rebate or a change in tax code

@slithytoveisascientist So my workplace pension is sorted, but it's the SIPP I'm wondering about?

No I understand I was just responding to your first point as you seemed uncertain if your workplace pension automatically claimed the higher tax relief - and I was advising you to check as not all do

If they've told you need to claim back the rest, you definitely don't have salary sacrifice - you absolutely should claim your tax relief via HMRC, they'll adjust your tax code or give you a rebate. You can claim back four tax years, so do this before the end of this tax year in March.

I would ask your employer if they have a salary sacrifice scheme or if they would set one up. It means you also save NICs, and so does the employer. My employer adds their NIC savings to my pension pot.

But definitely check your historic contributions and whether your Scottish widows pension was transferred over or is sitting in a different pot.

Oh sorry @slithytoveisascientist I was mixing you up with OP, ignore my comments about checking your historic contributions!

Thanks for taking the time to explain. I really do appreciate it. I understand what you say about compounding but as I said my pension has been losing money instead of gaining so is not really compounding. My employer selected Aegon to manage our pension and so all my colleagues are in similar position. Do I have an option to chose my own pension provider and ask my employer to contribute there? I pay 4% and my employer matches the contribution.

@Moreorlessmentallystable you can ask your employer, but I think it's unlikely. Ours don't allow it, it's too much additional admin for our small payroll team. If it makes you feel any better, most people know feel that their pension has tanked in recent years across a range of providers.

Open a SIPP and transfer your work pension into that. You can chose where to invest it from there.

@Makeitmakesensetoday
Look at your statements over the years. The amount you pay in each month should have gone up with inflation.

When we looked at mine I was still paying in the same amount as I had been ten years ago.

It is one of several policies I have and had no plans to start taking anything from it for about ten years. We only looked at it when I took early retirement. Aviva admitted their mistake, we paid the short fall but two years later it is still not resolved.