Results are out! Find what you need...fast. Get quick advice or join the chat
Hey there! Sign in to join this conversationNew here? Join for free to post

Big4 Offer Holders - Pension or not?

Announcements Posted on
Applying to Uni? Let Universities come to you. Click here to get your perfect place 20-10-2014
    • Thread Starter
    • 1 follower
    Offline

    ReputationRep:
    To all the people with offers, will you be opting in for the pension or not? Is it wise to? I don't really want to as its a decent chunk out of the not so big salary (Deloitte) and not to mention student loans being taken out also and I think I am likely to have other sources of income when im older, but can't be sure. My parents are telling me to opt in, but I was thinking maybe I could set a private one up if/when I earn a bit more say post qualification?

    Current big4'ers or anyone else, have you opted in? Reasons?

    Cheers
    • 5 followers
    Offline

    ReputationRep:
    I would wait until you are settled before you start your pension. At the start I imagine you would need the extra cash to get started in life. Personally, I would not do it until after put a deposit down on a house.
    • Thread Starter
    • 1 follower
    Offline

    ReputationRep:
    (Original post by ForKicks)
    I would wait until you are settled before you start your pension. At the start I imagine you would need the extra cash to get started in life. Personally, I would not do it until after put a deposit down on a house.
    Yeah thats what I was thinking, but it wouldn't be worth taking one ever if you were planning on being self employed right? Because you need 40 years worth of contributions to be clogged up in order to get one I think....
    • 5 followers
    Offline

    ReputationRep:
    (Original post by Mos Def)
    Yeah thats what I was thinking, but it wouldn't be worth taking one ever if you were planning on being self employed right? Because you need 40 years worth of contributions to be clogged up in order to get one I think....
    Each scheme will be different, so I guess you would need to read the small print on it. If you want to become self-employed though, I imagine you would need that money as start-up capital. I think in early career days, every small amount of money is much more important to keep in your pocket than in a pension. As your salary and wealth rises, you can afford to put money in a pension. Most retirement money would come from smart investments like property anyway
    • 1 follower
    Offline

    ReputationRep:
    (Original post by Mos Def)
    Yeah thats what I was thinking, but it wouldn't be worth taking one ever if you were planning on being self employed right? Because you need 40 years worth of contributions to be clogged up in order to get one I think....

    (Original post by ForKicks)
    Each scheme will be different, so I guess you would need to read the small print on it. If you want to become self-employed though, I imagine you would need that money as start-up capital. I think in early career days, every small amount of money is much more important to keep in your pocket than in a pension. As your salary and wealth rises, you can afford to put money in a pension. Most retirement money would come from smart investments like property anyway
    I strongly encourage both of you, and anyone else who are in the same position, to opt IN from the very start. Research has shown that if you save into a pension between the ages of 18 and 65, then half of the overall pot you get at retirement will come from the money invested between the ages of 18 and 25.

    The best way to do it is to contribute the same percentage of your salary that your employer will match, whether this be 3, 4, 5% etc. If you delay for 5 years, you don't just miss out on the contributions that you would make, you also miss out on your employers' contribution, and any returns over the full term of your pension, which compound to make this loss a decent size.

    At current annuity rates, to have a pension of 20k per year you need to have a pension pot of around 400k, which translates to over 500k if you decide to take your tax-free cash. With people living longer, and markets looking uncertain, this will probably mean that this amount will significantly increase over our lifetimes.
    • 10 followers
    Offline

    ReputationRep:
    (Original post by Mos Def)
    To all the people with offers, will you be opting in for the pension or not? Is it wise to? I don't really want to as its a decent chunk out of the not so big salary (Deloitte) and not to mention student loans being taken out also and I think I am likely to have other sources of income when im older, but can't be sure. My parents are telling me to opt in, but I was thinking maybe I could set a private one up if/when I earn a bit more say post qualification?

    Current big4'ers or anyone else, have you opted in? Reasons?

    Cheers
    No idea as I haven't received any info on the pension schemes yet. Sorry.

    I'm also joining Deloitte (London - Audit), may I ask where you are joining? You mentioned the salary, have you been told a definite figure for yours yet? I was still under the impression that it was to be confirmed at a later date. You probably are basing it on previous years, but thought it was worth asking in case you knew!
    • Thread Starter
    • 1 follower
    Offline

    ReputationRep:
    (Original post by thegaffer91)
    I strongly encourage both of you, and anyone else who are in the same position, to opt IN from the very start. Research has shown that if you save into a pension between the ages of 18 and 65, then half of the overall pot you get at retirement will come from the money invested between the ages of 18 and 25.

    The best way to do it is to contribute the same percentage of your salary that your employer will match, whether this be 3, 4, 5% etc. If you delay for 5 years, you don't just miss out on the contributions that you would make, you also miss out on your employers' contribution, and any returns over the full term of your pension, which compound to make this loss a decent size.

    At current annuity rates, to have a pension of 20k per year you need to have a pension pot of around 400k, which translates to over 500k if you decide to take your tax-free cash. With people living longer, and markets looking uncertain, this will probably mean that this amount will significantly increase over our lifetimes.
    Thanks for this, what you've said is clearly the sensible thing to do - is it still worth taking one (when you start at age 21/22) if you plan on being self employed in, say 30 years?


    (Original post by M1011)
    No idea as I haven't received any info on the pension schemes yet. Sorry.

    I'm also joining Deloitte (London - Audit), may I ask where you are joining? You mentioned the salary, have you been told a definite figure for yours yet? I was still under the impression that it was to be confirmed at a later date. You probably are basing it on previous years, but thought it was worth asking in case you knew!
    Im joinging London Tax, im just referring to the online contract figure pretty sure it wont change much, they havent told me anything but start date as of yet! I've got another offer from another company and im guessing the pension schemes will be the same at Deloitte, and its really hard to make decisions so early on about something much later on in your life, hence why im asking !
    • 1 follower
    Offline

    ReputationRep:
    (Original post by Mos Def)
    Thanks for this, what you've said is clearly the sensible thing to do - is it still worth taking one (when you start at age 21/22) if you plan on being self employed in, say 30 years?
    As far as I'm aware, Deloitte offer a Defined Contribution (DC) scheme. Therefore, any money that you put into the pension now will be yours forever. If you leave Deloitte, the money doesn't disappear - you can either leave it where it is and allow it to accumulate more (obviously without any new additions), or withdraw it and put it in a personal pension, or possibly move it to a new company's scheme.

    If you become self-employed, the most likely scenario is that you will do the 2nd of these three. You can move that money into a personal pension or a SIPP, which you have much more control over. So, yes, it is very much worth it. Plus, I heard on the radio this morning that many self-employed people are being forced to work past retirement age because they haven't got any pension provisions, something that I'm sure you wouldn't want to happen.

    If they are still offering a DB pension scheme, then you won't lose the money either - you can withdraw it to put it in a SIPP/PP, or you can leave it there, where you will receive the income (as specified in your pension T&C's) when you retire.
    • 1 follower
    Offline

    ReputationRep:
    (Original post by Mos Def)
    Yeah thats what I was thinking, but it wouldn't be worth taking one ever if you were planning on being self employed right? Because you need 40 years worth of contributions to be clogged up in order to get one I think....
    You're referring to the state pension. Self employed people build up their state pension contributions via NIC Class 4 and Class 2.

    Yourself and employers contribute into a private pension scheme with an external provider which you can take elsewhere.
    • Thread Starter
    • 1 follower
    Offline

    ReputationRep:
    (Original post by Kemik)
    You're referring to the state pension. Self employed people build up their state pension contributions via NIC Class 4 and Class 2.

    Yourself and employers contribute into a private pension scheme with an external provider which you can take elsewhere.
    Ahhh right, cheers

Reply

Submit reply

Register

Thanks for posting! You just need to create an account in order to submit the post
  1. this can't be left blank
    that username has been taken, please choose another Forgotten your password?
  2. this can't be left blank
    this email is already registered. Forgotten your password?
  3. this can't be left blank

    6 characters or longer with both numbers and letters is safer

  4. this can't be left empty
    your full birthday is required
  1. By joining you agree to our Ts and Cs, privacy policy and site rules

  2. Slide to join now Processing…

Updated: April 17, 2012
New on TSR

Submitting your UCAS application

How long did it take for yours to be processed?

Article updates
Useful resources
Reputation gems:
You get these gems as you gain rep from other members for making good contributions and giving helpful advice.