Going up to full time for pension purposes?

[KarokeandGin]

My pension is poor, it’s value is £14k total and I am 35 years old. I was a low earner when my oldest was younger and I worked very part time for a while too. I’m now 4 days a week with a 2 year old and my son age 5 is in school.

i love our day together but having recently started a new job and due to the cost of living my mother has offered to have my daughter a day a week if I wanted to go full time. My full time equivalent is £92.5k and I earn £74k at the moment on 4 days. I know I am extremely lucky to be earning this amount especially in the current climate.

Given my low pension would you consider going up to full time and ploughing more into the pension or wait 2 more years until daughter is in school nursery and go full time then?

thank you for your advice!

This might be an obvious thing you've thought of but can you increase your contributions on 4 days. I'm not on as much as you but I put in 25% and my employer 5% and I'll basically do anything I can not to go full time. Life is for living.

That day is precious and I’d hold on to it for as long as possible personally. My non working day is the only thing keeping me sane with a 3yo and 6yo. Could you not increase your pension without upping to 5 days or look at perhaps compressing 0.9fte into 4 days?

Just increase your contributions. However the increase in earnings will provide a nice buffer for you.

Honestly earning what you do is increase what you pay into your pension without going full-time. You'll never get that time back with the kids when they are little.

What do you currently pay in? What would going FT mean you could pay in?

I’d keep the day off, personally. Up your contributions anyway, make them a priority, cut discretionary spending elsewhere to do it.

Why don’t you up your pension payments via additional contributions to the level it would be approx if you did work full time and keep the day off

Could you do an extra hour each day on other four days and work 3 1/2 hours on fifth day? That way you would still have half a day off each week with DC. Could you get half day off on Wednesday so break up working week a bit. My niece does this as says it makes a huge difference only having to work from 8-11.30 am on Wednesdays. She gets laundry washed and dried midweek too.

No I would wait two years and do it then or at least up contributions. I'm all for pensions and good finances but family first. You have plenty of time.

Agree with everyone else. I reduced my working week by 9 hours after I had my son and increased my pension contributions to make up for it. The time off is worth more to me at this stage of my life.

That day off a week is so special. I would just up your pension contributions. We aren't guaranteed an old age anyway.

Please don't take offence to this but £74k is a really large salary especially for 4 days a week. Are you single or do you have a partner that earns too?
Are your outgoings particularly high? Just wondering why you can't increase pension contributions and stay doing a 4 day week?

Why is your pension contribution so ridiculously low considering what you earn?????

I don't think she has said what it is has she? I took the £14k to be what she'd built up in the past and that she'd only recently taken up the new job.

I don't think there's anywhere near enough information to give a view. What kind of pension is it? What are you and your employer putting in? How much of your income could you put in currently and if you went full time?

If you are earning that much in a new job after a long time out then it sounds like a high earning career and the potential for your income to climb at lot. You'll presumably be getting decent employer contributions on that package. If I were you I'd spend some time looking carefully at the forecast in different reasonable scenarios. You don't want to miss this time with your DD (or I wouldn't if I were you) only to end up worrying about the LTA in 20 years time.

1. Can you afford to increase your pension contributions without working an extra day?
2. Could you afford to do so if your mum looked after DC on one of your 4 working days from saving on nursery fees?
3. Could you do compressed hours either 5 in 4 or 10 in 9 to retain a free day each week or each fortnight?

At 35, you still have 30+ years of earning and paying into pension and you are a high earner so should be in a better position than most to be able to pay in. If you're planning to go back full time in a couple of years anyway when dc is in school, I'd be tempted to keep that day for now.

You must be able to up your contributions on that salary ?

Others have said it already. I earn similar to you and put 10% of my salary and company puts 8%. There is no need to work an extra day (specially as you’ll not put those 20k in pension). Jusr increase your contributions

Agree with the suggestion that your mum covers one of the current nursery days instead, saving you fees which could go into pension or savings instead?

Yes. At your age you should be maximising income and savings. Believe me, you will KICK yourself in future if you don't take advantage of the opportunity for additional earnings -- especially if your mother will cover child care for that day.

it will be good for your child to have the stimulation, good for your career, good for your pension. Please don't pass up this chance.

At 35, you still have 30+ years of earning and paying into pension and you are a high earner so should be in a better position than most to be able to pay in. If you're planning to go back full time in a couple of years anyway when dc is in school, I'd be tempted to keep that day for now.

Yes, that is if she doesn't become ill, disabled or otherwise unable to work. Assuming no major problems arise with the DC's development or health. Assuming she is able to keep her job through economic turmoil. Assuming new technology doesn't render her occupation obslete.

Passing up current opportunities under the assumption that there are always going to be more on the horizon is a foolish stance. Better to have too much savings/job security/professional credentials than too little.

OP, you are at a high-energy age where you can afford to push your limits. Take the extra time on the job. You won't regret it but you might regret doing otherwise.

Keep the day and increase contributions as others have suggested. I worked part time for 10yrs and although I have a decent pension I’m going to do a voluntary contribution of £100 a month to start, which will cost £60 due to higher tax band

Thanks all, really useful suggestions. I put 8% in and my employer puts in 5%. I was putting 4% and my employer 4% previously. Our nursery fees and mortgage are expensive as London based so whilst we could cut back not by much. My husband earns less than I do. I still make student loan repayments but that will be clear in about 2 years so then I hope I can use that cash for the pension and make up the shortfall of the last 11 years, it should coincide roughly when my youngest goes off and I can go full time again.

thank you all!

Have you tried playing around with a pension calculator such as this one: www.vanguardinvestor.co.uk/what-we-offer/personal-pension/pension-calculator just to get a rough idea of what you are on track for?

Is it a defined contribution pension?

I have just gone full time from 4 days due to a poor pension pot - I'm 36 and have 16.5k in a private pension which isn't going to cut it. I was offered a promotion and pay rise so chose that moment to ask for full time so I can maximise my contributions. But, the key difference as that my DC are 7 and 10 and both at school. I would hang onto a day off with a 2 year old tbh, you don't get that time back.

I had pretty much no pension in my mid 30s (studying /illness in my twenties, young child in my early 30s)... Now 40 and after climbing the career ladder quite fast and also working full time once both were at school my pension pot and predictions look so much healthier. I am glad I kept my day off a week with them.

@ZeldaWillTellYourFortune do you have children? Because it's really sad if you thought at the end of your life I wish I had earned more money, rather than I wish I had spent more time with my children.