Anyone know what the kind of average to good work stakeholder pensions are?
Wife was offered 3% matched and I'm thinking that is pretty ungenerous, I get that and 11.5% on top ( which is probably quite generous i admit, was about 8% before I hit 40)
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3% is the minimum companies will be required to offer from next year http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1084110927&r.l1=1073858787&r.l2=1084822773&r.l3=1073912964&r.l4=1084109972&r.s=m&type=RESOURCES
So the answer is that the employer is offering the minimum required by law!
If you Google pension calculators you will get several calculators calculating what your end pension is likely to be. Once you have done so you may have more of an interest in politics!
ok slight error its 5% matched, she's 31
mine is 3% matched, plus 11.5% non contrib (its 8% if under 40) - her current pension is similar to mine so it isn't unique altho possibly on the generous end, the one she is being offered is at a new firm who are trying to recruit her. I am trying to explain to her that this affects the overall package and makes the offer less appealing than at first glance. My company one was formed straight after they dropped doing final salary schemes so that is probably why its more generous than some.
I am certainly interested in the politics but its been done on another thread
A 5% matched contribution seems fair enough to me...........you are not going too get many employers paying in excess of 5-8% into a stakeholder plan.
During the 20 years I have been in the business I have always said that the bare minimum that you should be paying into a non final salary scheme is 6% (the amount that most public sector workers used to pay) but realistically it should be 10%+. I don't know many people who could afford to pay in more than 10% of their salary into a pension and still live, esp if they have mortgages, kids etc.
If I'm out of date on pension legislation I apologise but I've been wondering for a while now whether it's actually worth contributing to a personal pension plan or whether you'd be better off long-term investing in a stock & shares ISA instead. Okay, you don't get the upfront tax breaks BUT you do get the resulting income and capital gains tax-free AND you do get to keep your capital. With a pension that either goes into buying an annuity or gradually fades away on income drawdown.
I appreciate that the maths might be very different if you add an employer's matched contributions on an occupational scheme though. (Although maybe not once the pension manager's fees have been deducted!)
However, the government announced on 29 November 2011 that State Pension age will now increase to 67 between 2026 and 2028. This change is not yet law and will require the approval of Parliament.
3% matched is very poor.
From a survey I saw, average employye contributions were 2.6% employye and 5.5% employer. This would give 8.1% total which would not be a great pension
To get a pension of half salary at 65: a 30 year old starting to pay in needs to pay in about 15%of salary total, a 40 year old 20%. Obviously depending on investment returns