Pension contributions

[bonzaitree]

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.

From To Contribution Rate
£0 £23,000 26.6%
£23,001 £45,500 27.1%
£45,501 £77,000 27.9%
£77,001 - 30.3%

Because it generally pays less than private sector. Pension is the big draw for people.

No.
The state as an employer should lead by example.
They’re a huge employer so if you’re that hacked off - apply!

I’m mid 50s and have only ever worked in private sector, with private company pension and personal pension. So I’m not biased from receiving a public sector pension!

@FitAt50 “Because it generally pays less than private sector. Pension is the big draw for people.”

Although I have no issue with public sector pensions, I’m not sure I agree with either of those statements! Anecdotally, the salaries are competitive in many roles and plenty of people have no flipping clue how good the pension is!

Looks like I need to up it by a few percent for now then a few more percent when the house has been purchased.

I am amazed by some peoples high employer contributions, but then I work in the private sector.

Yes I am a higher rate tax payer and yes I understand the tax advantage of increasing my contributions- defo something to look into further, especially when I've bought the Damn house.

Housing situation is complex- won't go into it here but I don't pay rent as such and what I do pay is less than 10% of my take home pay.

But the house deposit is fucking expensive.

I also know how lucky I am and this is 1000% a first world problem.

Grrr public sector pensions wind me up too and I agree with @Oblomov22

I disagree with the comment about salary levels being better in private (sorry can't remember who said that) as that's very often not the case. And even if it were the long term benefit of gaining a defined benefit public sector pension is huge. There may be less final salary public sector pensions nowadays but even the current move to career average is still massively generous as they are paid forever. Private sector pensions are generally defined contribution which means you either buy an annuity (the rates are horrific) or you invest the money and withdraw as you go along but when it's gone it's gone. There's no forever payout. I can't be arsed to dig out the calculations but the rate at which a person has to pay into a DC pension to get the same benefit as a DB public sector pension is eye watering.

40
Private sector
I pay 5% employer 10%
This is the max they will double
Shame my pension today is worth less than it did in Jan

@Oblomov22

Its ok.

Iv only put my physical and mental health on the line for the past 3 years in a pandemic.

Caught covid through nursing others and continue to nurse others despite a diagnosis of long covid and feeling awful with it.

Fortunately my patients really appreciate me which helps to counteract opinions like yours.

@bonzaitree sorry don't mean to derail your thread, just getting that off my chest 😂

In answer to your question, if you can contribute enough to get below the 40% tax rate without busting the annual allowance (you can but you'll not get a tax advantage so it's pointless) then great.

Put everything else towards a house deposit. If you want the deposit faster then less into pension but you'll pay more tax (and NI if you're in a salary sacrifice scheme).

I've been paying in since I was 29 I pay 6.9% but am very fortunate that my employer pays 29%. This makes up for huge workload, massive stress, not great pay and constantly being crapped on from a great height by the government and the media. Public sector, average salary pension.

FWIW I make decisions daily that directly affect the immediate safety of the public, and my SIL earns more as an assistant manager in a shop. Without the pension I wouldn't be there

Public sector jobs are open to all - if the pension is that attractive then do apply for one!

While it is true that DB schemes have the benefit of security, the actual pensions tend (nowadays) to be fairly modest and of course if you die six months after retirement your family won’t get a penny. Its not like you are getting 25% of your salary paid into an individual pot.

I pay in 15%, my employer pays a measly 3%!

Oh and that 3% is of qualifying earnings, not salary.

I could walk out of my public sector job tomorrow and earn At least double ( up to 10x) in private sector @Oblomov22 so don't begrudge me my pension.

I contribute 6.8% and employer contributes 17 % .

In reality I have a chronic illness and don't expect to live till I am old so I wouldn't spend too long feeling envious.

8.5% started when I was 32. No idea how much the employer puts in as I have one of those gold dust defined benefit pensions so it'll be a percentage of the average of my best 5 year's salary. It seems a reasonable amount when I put it into a calculator, DH is on the same but considerably higher. Every now and then I consider adding more but then life happens.

I think I put in 9.8% plus another 3.5%. So 13.3%. The 3.5% goes into an investment fund. The 9.8 into a defined benefit pension.

DB pensions are NOT valued by contributions from employers. They give SOME indication of the cost involved, but do not directly correlate.

Mid 40s and public sector. Standard contribution for my salary range is around 7.5% and I voluntarily pay an extra 3% for early retirement. Employer contribution high at 28%.

@IfOnlyOurEyesSawSouls

Your comment re 'opinions like mine' is not valid. I don't think there's anything wrong with my opinion. Plus many other posters agree with my opinion : Testina, RoseLemon.

You have made this emotive and personal when it is not. I have utter respect for nhs workers during covid. However many other workers also worked during covid, public and service providers, shop workers. I worked, everyone i know worked. Irrespective of how good a job a nurse did during covid, that can't be used to now justify something that can't be afforded longterm. 30% pension is big. And it's not viable, the Government can't afford to sustain this long term.

Plus not all public sector salaries and overall packages are that bad compared to private.as other posters referred to. I see many jobs advertised which are similar. So 30 years ago, the salary may have been lower and needed a higher pension to compensate, but that is not always the case now. there just isn't the justification for it.

I'm just amazed at all of these employer % contributions. I've always been private sector and never had more than 3% employer contributions. Currently I pay 3% and my employer pays 3%. 44 yrs old and will up my contributions to 6% next year but employer will only pay 3%.

People amazed at "generous" public sector/Defined Benefit schemes "employer contributions" bear in mind this isn't a sign the employer is generous it's just a sign of how badly the pension scheme has been managed over the years. The higher the contribution rate (and that includes the employee contributions) the deeper in the shit the pension scheme is generally.

For Defined Contribution schemes, the employer contributions is the opposite and a genuine sign of how an employer treats their staff.

But don't compare DB and DC employer contribution rates as they aren't comparable

I used to put in 15% of gross and my employer matched with 5% for total of 20%. But have put in zero since age 39 when I was disabled in a hit and run and left unable to work for the rest of my life. So I am always in favour of making hay while the sun shines.

That’s totally inaccurate. Many are unfunded

15% but I started it at 52. I was told by a financial advisor to contribute what I can afford not to miss