Should i Opt out of pension plan

[mohawkbrah]

I've just recently been pu tonto it because law requires employers to do so in UK.

I put in 6% of my salary employer puts in 8%

using a pension calulator on Hargreaves lansdown i'll end up with £80k in 35 years when im 55 years old. thats terrible!. Assuming only 5% growth i would otherwise have 194k if i did it myself!


what do i do?!

my detail package is on the way to where i can log in and look at pension.

 Im young and dumb and never been offered a pension scheme before. so do i get to choose what my pension is invested in? It's With NEST uk i think

[Proud Foot]

Definitely look at the plan documents when you receive them. My guess is the pension calculator is calculating the annual benefit in 35 years.  I don't know about UK pensions but the US pensions I know of do not allow you to select what your pension is invested in.

[cerat0n1a]

No, definitely stay in, unless you really, really can't afford it. Even though the money can't be touched until you're 55 (probably older), it's still part of your stash and helps with your RE plans - it covers the period from retirement age onwards. The trick is to balance how much is in the pension and how much you have out in your overall stash.

Look at it this way - every £6 you put in, your employer puts in an extra £8, more than doubling your money straightaway. Maybe already quoted in the figures you have, but that is money before tax has been taken out (i.e for a 20% taxpayer, each £125 credited to your pension only costs you £100 in take home pay. Whether you get a choice of funds depends on the individual scheme. You can transfer the money into a self-invested pension at a later time if that's a big concern. My guess is that the difference between £184k and £80k is them showing what it would be with the effects of inflation taken into account (i.e. what it would be worth in today's terms.)

Two recent threads on here are worth looking at:

http://forum.mrmoneymustache.com/investor-alley/opting-out-of-uk-workplace-pension/

http://forum.mrmoneymustache.com/ask-a-mustachian/uk-based-inside-pension-or-outside-and-interest-only-mortgages/