OK, need help.

I've been offered a new job and the pension pays in 1% less that my current company pays in. Not a great amount I know but I'm 24, I've been in my crrent pension scheme (with my current employer paying 6%) for 18 months. SO I know my contributions would be refunded to me less tax.

My worry is that I'm basically starting from scratch again but my total contributions would be 1% less each year.

Would the past 18 months payments be worth a lot come retirement. I'm aware the earlier you start a pension the better. So would losing this 18 months worth make a big differeffence also would paying 1% less be a big difference.

Please help......

 

Matt

There are various different types of scheme, and different qualities of provider. Without more information, it is not possible to give a definitive answer.

<UL TYPE=SQUARE>
<LI>are the schemes money purchase (defined contributions) or final salary (defined benefits)?
<LI>how are the funds invested, and by who?
<LI>are they contracted into or out of SERPS?
<LI>when do you intend to retire, and are you intending providing a pension for your partner?
</UL>
Sorry to be a pain, but the information is necessary to provide a sensible answer. Mail me off line if you don't want to publish this information.

Regards

Duncan

 

Matt - bug eyed is right. Each piece of detail is needed to give correct advice. As a rule of thumb, for every year that passes you would need to increase your contribution by 20% to get the same fund at retirement. You where contributing 6% for 18 months so you would need to contribute around 7.8% to have the same fund come retirement. Do you have an option for AVC's or can you make a regular contribution?

 

cheers guys, details are a bit vague at the moment. I'll just work off the rule of thumb you mentioned.

thanks again.