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Original poster

Pension contributions

151 replies

bonzaitree · 17/10/2022 13:38

Hi all,

Just wondered what percentage you pay into your pension? Would also be useful to know your age for context and whether you work in public or private sector.

I've just moved jobs so have to make a decision. I work in the private sector and my employer contributes 5%.

I am a saver so want to add a lot more into my pension, but we are saving for a new home deposit at the moment so just trying to balance it out.

I am early 30s.

OP posts:
Hjgfer · 17/10/2022 13:46

I have an SIPP, which I’ve kept whether I’ve been employed or self-employed. You can change the regular amount you contribute when your circumstances change.

My advice is to put in as much as you can comfortably afford each month. It’s like a house deposit, although it might not seem like much, the money soon mounts up.

Bobbins2022 · 17/10/2022 13:48

I once read that the percentage should be half your age when you start the pension, taking your employer's contribution into account.

I was late to the world of pensions as my employer didn't offer one in my 20s, so I was early 30s. I pay 12%

ReedOfFate · 17/10/2022 14:16

I pay 6.8% into the LGPS; it’s a DB scheme though so possibly not relevant to your question

ReedOfFate · 17/10/2022 14:17

ReedOfFate · 17/10/2022 14:16

I pay 6.8% into the LGPS; it’s a DB scheme though so possibly not relevant to your question

Sorry - should also have said I am 50 and have worked in local govt for 25+ years, so have clocked up a reasonable pension (this last part based on career average pay, since about 2014)

Original poster
bonzaitree · 17/10/2022 14:40

Hjgfer · 17/10/2022 13:46

I have an SIPP, which I’ve kept whether I’ve been employed or self-employed. You can change the regular amount you contribute when your circumstances change.

My advice is to put in as much as you can comfortably afford each month. It’s like a house deposit, although it might not seem like much, the money soon mounts up.

Thing is i CAN put a lot more in. Like I could technically put in 50% of my salary.

But I want a house deposit asap, so I'm looking for a reasonable amount to put in whilst I'm doing that.

OP posts:
Chewbecca · 17/10/2022 15:21

I’ve always put in 8 & my employer 15 (7 base + 8 matching). Have a good pension now and will be retiring early.

Don’t forget there is an LTA and your Annual Allowance of £40k.

Does the amount your employer will contribute vary depending on your own contribution? Definitely maximise any ‘free money’.

whiteroseredrose · 17/10/2022 15:28

Now 57. I put in 7% and employer 14%, so 21% total. Good for private sector.

Nurse friend has employer contribution of 20% which puts it in perspective though.

LadyDanburysHat · 17/10/2022 15:31

I didn't start a pension until quite late, and I also only worked part time for a long time. My employer adds 7.5%, which will rise to 10% after I've been there a few years. I currently add 7% but I am working on trying to increase this by 1% each year when I get my pay rise.

PanettoneMoly · 17/10/2022 15:44

I put in 5%, employer 11%, 16% in total and I’m early 40’s.

Private sector, previous private sector role was the same.

Weirdlynormal · 17/10/2022 17:22

I think 15% of salary including employer contributions is a good aim. Random but based on many years of seeing calcs.

I’m a Chartered IFA

StarcourtMall · 17/10/2022 18:10

I pay 10% and employer matches it. I am 47 but have been paying in since I was 39 (and had a smaller one before that)

HSMLPS · 17/10/2022 18:15

If I was you I’d:

  1. Work out how much deposit you neee and the date you want to achieve this by
  2. How much you need for furnishings, stamp duty etc
  3. Then deduct your essential outgoings from what is left
  4. Then deduct your other savings e.g rainy day fund
  5. You can then clearly see what you have left and how much your willing to sacrifice
  6. if its 50% go for it. It’s better to put more away now and have some wriggle room later in life
Testina · 17/10/2022 19:14

Depends on which rate of tax you pay, and how much rent you’re paying.

If you can afford to contribute 50% I’d guess either you’re HRT payer, or you have very little outgoings living with parents, or both!

If rent is minimal, you can afford to buy house deposit more slowly as you’re not losing money on high rent.

If you’re a HRT you’re missing out on far more by not maximising your contributions.

With absolutely not enough info to go on 😉 I’d say pay enough into your pension to pay not tax at 40%. Then hammer the rest into a house deposit. If you’re a higher earner, you’re likely to pay tax when you take your pension as income later. Even though it’s still a good deal because of the 25% tax free lump sum, and you will have some options for managing tax paid, it’s likely that having your own home will pay off more in terms of capital growth and money saved from renting now.

Asdf12345 · 17/10/2022 19:18

Public sector and likely to have issues with annual and lifetime allowances unless the taxation thresholds change so keeping contributions to a minimum without leaving the scheme.

Georgesgrumpymedicine · 17/10/2022 20:49

I'm paying in around 22% including employers contributions but I have lots of lost time to make up for as I'm in my mid 40s with a small pot.

Teacakexo · 17/10/2022 20:54

I pay in 5.45% and my employer pays in 27.2% I’m early 30’s and public service, I am always told that it’s very generous in comparison to the private sector although I don’t get mine until retirement age which will be god knows what age by the time I go to retire….

FitAt50 · 17/10/2022 21:12

Civil Service - I put in 5.5% and they put in 27.1% - was amazed its so high.

WalkingOnSonshine · 17/10/2022 21:13

Previously paying 5% and matched 10% by employer.

I’ve now finished paying my student loan so that payment is going to my pension. It will now be 10% + 10%. About 10k per year.

HuntingoftheSnark · 17/10/2022 21:15

I put in 30% and my employer puts in 12%. I'm 53 and have some catching up to do.

FredaFox · 17/10/2022 21:16

Currently paying 28% and employer 5%, I have a small pot as only started my pension when it became compulsory, I'm mid 40s. I'm terrified of my future so now pay as much as possible so no holidays and no big spending (I do still have a social life though!)

FredaFox · 17/10/2022 21:17

I can't believe what figures employers (especially public sector) are paying

Oblomov22 · 17/10/2022 21:19

I put in 10%, employer 5%.

I can't believe public sector is paying 27% employer. I find that too much. How is that right?

Lcb123 · 17/10/2022 21:21

Good rule of thumb is apparently half your age as a % (total for you and your employer). But if you’re saving for a deposit, I’d prioritise that as long as you’re putting something in pension.
I work at a university where they have a set % (10% for us, they put in 20%) it’s very generous but feels like a huge amount out of pay cheque each month and it’s annoying you can’t reduce the %

Isyesterdaytomorrowtoday · 17/10/2022 21:23

Mid thirties, I pay in 6% employer pays in 10%

been paying in since I was 21 and hoping to retire early

Oblomov22 · 17/10/2022 21:23

I'm a bit hacked off that all my taxes are being used to pay huge pensions to public sector workers. Their salaries are often good. But the public are also paying an extra 30% for their pension. Is no one else shocked by this?