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.

You are quite wring. No public sector/civil service pension is “unfunded.”
Did you mean to say “underfunded”?

Work out first how much to build your deposit, there is a government ISA scheme for this. The rest may go to your pension.

Trust me the salaries aren’t great, most people only stay because of the pensions. I had a 1% pay increase for 8 years in a row, I only received slightly more following this by changing my contract to state I could work later nights and weekends otherwise I would have been stuck on 1% for god knows how long

Private sector, my employer pays 12% and I pay 14%, mid 40s.

They are, there is a no ‘pot’ as such. The current pensions are paid by current payments:

The NHS Pension Scheme is a statutory, unfunded, defined benefit occupational pension scheme backed by the Exchequer, which is open to all NHS employees and employees of other approved organisations

You are talking rubbish I’m afraid @Discovereads

This thread shows that very few people even understand their pension and how it works.

On this post there are good employers contributions from private employers not just public sector. I am just shocked at how little ALL my employers have contributed throughout my whole career compared to all of the ones quoted here. Not even generous salaries to compensate either 🙄

@Discovereads

Teaches scheme: The TPS is an unfunded scheme and members contribute on a 'pay as you go 'basis – contributions from members, along with those made by employers, are credited to the Exchequer under arrangements governed by the above Acts

want more?

Sorry but this one HAS to be added:

'The Principal Civil Service Pension Scheme (PCSPS) and the Civil Servant and Other Pension Scheme (CSOPS) – known as “alpha” – are unfunded multi-employer defined benefit schemes but (insert employer's name) is unable to identify its share of the underlying assets and liabilities

I pay 5% and my employer 3%. I'm mid forties.

I knew it was bad and I am worried about my pension but reading this thread has made me feel a bit sick to be honest. So many private employers obviously pay a lot more. I feel like I'm being scammed. I might start looking for a new job ☹️

I pay 7%, employer pays 14%, private sector, can’t complain too much really. Although I’ve only been contributing to the pension since early 30’s as young family plus house purchasing was a bigger priority.

I pay 27.5% (incl employer contribution of 10.5%). I started late so I'm putting in as much as possible.

That's exactly how I feel

I'm mid 30s and put in 55% so the full 40k. Been doing it for the last 7 years. It is very tax efficient i intended to be gone from the workplace as soon as I can.

Sources please? Just inserting “unfunded” into a sentence from Wiki doesn’t cut the mustard.

The general consensus on google seems to be it should be the age you started your pension divided by 2.

For example if you start at 30 you save 15%

Has anyone who is close to retirement age done this? And did it work out for you?

Early 40's. I have two jobs that pay equal salaries but have only started paying into a pension properly in the last 10 years.

Job 1: private sector, I pay 10% and employer 3%

Job 2: university, I pay 9% and employer 21%.

Wow.

You are goals.

@FreddyHG you are goals. Can you tell us a bit more about how this works for you? Ie what are your other commitments etc.

They can’t be unfunded because they’re literally funded by salary sacrifice contributions. It’s not like these pensions are free to employees.

@Discovereads

Read the NHS accounts: www.nhsbsa.nhs.uk/sites/default/files/2021-01/Resource_Accounts_2019-2020.pdf. My statement above was taken from here, not some random Google effort.

This is also from the TPS:www.teacherspensions.co.uk/members/search/-/media/92e8b272f12e46438a80d2fdc429ce03.ashx

You are misinformed, but writing this stuff as fact. I have 15 years as a Chartered IFA with every pension qualification available to us. I advise members which is a legally constrained profession and requires me to be on an FCA register.

For what it’s worth, schemes hold about 9 months worth of liabilities. Not underfunded, but UNFUNDED.

The money is taken from current contributions and given to current pensioners. There is no savings pot. If payments stopped from current members, the treasury has to pay. It’s a deal with the government.

Ford (for example) collects and then saves all contributions from the people who pay in. There is a fund that pays out to all. The legal position for trustees is to hold enough money for ALL liabilities. Future contributions do not matter. The U.K. Government do not do that, there is no fund. This is why it’s called an unfunded scheme.

So this works fine for me this may be a bit outing but I have a low earning partner and I have cheap hobbies which involve my allotment and make models. So my required outgoings are low. I saved vigorously for my first 8 years of employment. Meaning I had a substantial house deposit that I used to buy a house for cash when combined with a mid size redundancy payout. I have no children though (they seemed to expensive for me to want to prioritize). The trick I find is living minimally but getting enjoyment from simple pleasures. If you can train yourself to live cheaply and sustainably it makes the frugal life much easier. I have a 14 year old car I service and repair myself. I shop at aldi. i fitted my own bathroom from scratch likewise lay own carpet. YouTube is Queen for getting money saving DIY videos. I also read lots about finances both consumer and macroeconomics so know how to make my money work harder. I also fixed for the longest I could last year so have another 3 years left on a cheap energy fix as it was obvious last summer what was happing to prices.

People joke or look down their noses about my frugal lifestyle and my interests yes I don't have a flash car yes I do "just" have a 2 bed ex council house with a big garden (I found a reasonable house at a reasonable price and wasn't prepared to stretch more in a house price bubble). But I have no debt a relatively happy life and am barely noticing the cost of living crisis because I was used to living cheap. My job is ok paying but I chose to invest early in my career taking jobs that had good learning and development opportunities rather than being just what I wanted to do.

Age 50, working in NHS - I pay 10% and my employer 20%.

I've worked since 1994/5 & have stayed as long as possible in the "old" 1995 scheme as much as possible (albeit was very part time for 10 years).

As of April, it's now career average earnings but I'm almost full time now.

I'd love to go at 60 but am divorced so not sure if I can manage that.

I have a public sector DB pension here in Ireland, there's no fixed employer contribution % but I know roughly what it'll be worth on retirement.

I also have AVCs which I contribute around 5% of my salary to, I plan on increasing this though.