upping contributions rmdcp

[silver_fox]

Im currently paying 6% to get the full 10% rm free money.
is it true that if i go higher , say up to 10% or more that i will get more free money , ive seen £1 for every 68p mentioned elsewhere.
is this a no brainer for a nearly 40 year old with only 10k pension pot at present? should i wack it right up to 20/10%??

[abuch1980]

You'll still be working until your 80

[silver_fox]

thanksfor that

[RobertT]

Im currently paying 6% to get the full 10% rm free money.
is it true that if i go higher , say up to 10% or more that i will get more free money , ive seen £1 for every 68p mentioned elsewhere.
is this a no brainer for a nearly 40 year old with only 10k pension pot at present? should i wack it right up to 20/10%??

All pension contributions benefit from tax relief, meaning a £1 gross payment only costs you 80p. But RM employees benefit from salary sacrifice(PSE) too, which is a saving on both ours and the companies National Insurance contributions - that takes another 12p off our net pension payments.
So in total each £1 that goes into our pensions(the amount on our payslips) only actually costs 68p, with the government paying the other 32p.

That applies to all contributions into whichever RM pension scheme you're a member of!

The only proviso is that if you pay in extra you can't let your basic pay go below the level of the national minimum wage. There are threads about that on here, but for a full time postie on £441 p/w the maximum additional weekly amount would be around the £100 mark.

The usual advice with workplace pensions is always pay in at least whatever it takes to get the maximum employer contribution, which it sounds like you're already doing. But paying in even more means taking further advantage of those tax breaks.

To be fair £10k isn't very much in pension terms, have you got any others from previous employers? But the more you save, the more you gain from the government and ultimately the better the retirement you're likely to have.

[silver_fox]

thanks robert unfortunately yes i have only 12k in total so i need to catch up really. maybe i could up it to 20% to make the total 30% including the companys share. that would mean about 570 going in a month which would soon build up? the 32p bonus is amazing.

[koolishy67]

Choose a right fund to get maximum gain if you still have time to retire

[silver_fox]

which fund do you recommend ?

[NorthernBoy]

Silver fox

You need to choose a fund that matches your risk tolerance level. For example if you are cautious you probably want a fund with a low % of equities, if however you can live with higher volatility then maybe a fund with 80-100% equities is a better option.

Generally speaking the higher % of equites the more the fund will move up or move down in a short pace of time.

My opinion is that as you are probably at least 25 years off retirement you have time on your side, so if the market does crash you will have time to recover your losses. As you are paying in monthly you will be averaging out your buy price. If you save hard for the next 25 years you still have time to build up a decent sum.

[silver_fox]

so am i ok to leave it on the default fund for now? is it called blended equities?

[NorthernBoy]

so am i ok to leave it on the default fund for now? is it called blended equities?

I don’t know the breakdown or performance of this fund. Find out what the details are for this fund and ask if it suits your tolerance level.

Generally speaking default funds tend to be cautious in nature, which if true would not be my choice if I was 25 years from retirement. My risk tolerance level is however high.

[RobertT]

It sounds as if you're in the Lifecycle option which invests 100% in the Blended Equity fund until a member is a certain number of years away from retirement and then slowly moves into safer investments, via the Diversified Assets and Diversified Bonds options and then Cash. There is the choice of a 5 or 10 year switching period.
Details in the plan guide.

You can also choose to invest in any of the funds available and manage your investments yourself.

Details of the all the RMDCP investment options and factsheets are here.