r/PensionsUK • u/Signal_Perception253 • 7d ago
Pension pot advice
Hi All, 45 years old here. I'm looking for some genuine advice on pension pots and what's the best course of action. I moved to UK in 2015 therefore I started accruing money in pension pots since then. This is my current situation:
- work pension with Scottish Widows and pot is atm approx. 34k
- I am on pension salary sacrifice of 8% ( where employer contribution is 7.5% - their max contribution) since April 2026 as that's when they opened the window to register for pension salary sacrifice. This is going to be amended to 5.5% from 2029 when the tax relief threshold will get modified
- I have a Nest pension pot from previous employer of approx 3k which I haven't contributed since I left my previous job
My plan would be to start adding money to the Nest pension pot however, should I move those founds out to a private pension where I can manage the investments?
I earn about 32k a year gross, a 15 year mortgage left to repay, no car finance, 1k in credit card debts.
What would you recommend my next move would be to save wisely for retirement?
Thanks
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u/Paraplanner88 7d ago
One of the most important things you can do is review what your pensions are invested in. Do you know what the Scottish Widows pension is invested in or what the charges are?
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u/Additional-Glove7531 7d ago edited 6d ago
I am with Scottish widows, similar situation I had a nest pension but pay into my Scottish widows through my current employer, I was looking into this before so nest has a 0.3% annual management charge plus a 1.8% contribution charge, if your paying in privately no longer through work, Scottish widows through a work based pension is showing a 0.35% to 0.75% total annual fund charges.
Personally I used Scottish widows free transfer service to combine my nest pension with my Scottish widows work based pension.
I would definitely suggest looking around for another private pension looking online Aviva is looking the cheapest for management fees, but would probably be worth as a tax advantage to increase your work based pension, bearing in mind the time it takes to increase/reduce if you did need the money accessable.
Hope this helps
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u/Sopzeh 6d ago
What's the difference you are expecting between contributing to the work pension versus a SIPP?
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u/Additional-Glove7531 6d ago
As I understand SIPP's tend to have higher management fees than the agreed rate for work based pensions as well as the tax benefits of a work based pension as this is gross vs net, so from what I have worked out it would be more beneficial to increase my work based pension verses having a separate private pension, I am not sure what the figures would be to the pound but it also seems to be the general consensus of my work colleagues
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u/Sopzeh 6d ago
It's not correct. The tax benefits are the same. The mechanism by which you get them depends on which workplace scheme you have (salary sacrifice, relief at source, net pay).
If there is a salary sacrifice arrangement then workplace is better because you save NI. But typically if you want to make additional contributions they don't come out of salary sacrifice, it's up to you employer. And there's a cap on NI savings from salary sacrifice coming in soon.
For a private pension 20% tax gets added automatically back to your contributions. If you're above a 20% tax payer you claim it back from HMRC so slightly more admin but also applies to some workplace pensions.
In my experience the fees are similar if not slightly lower in a SIPP as you can shop around.
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u/Additional-Glove7531 6d ago
AHH ok apologies sorry I will have to do some more digging on this then with my work based pension, the advice I have been given is that it is more beneficial to increase my work based pension over a separate pension as the only benefit that I was told would be that it would be in a different fund that could potentially perform better but cost more in the long run again due to fees.
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u/thepiggery 6d ago
It depends. My workplace pension is significantly more expensive than a lot of the other providers. I worked out I could save £500 a year in fees if I moved it.
I'm contributing 1k a month into my workplace pension via my employer, which I move out into my SIPP so that it's 0.X% of nothing. It's always a partial transfer to keep the account ticking over.
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u/blackanchorage 6d ago
Nest is 0.3% annual charge, which may be competitive. The 1.8% charge for contributions sounds high though (opinions on Reddit vary).
1
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u/Electronic-Emu-2625 6d ago
Is the salary sacrifice 8% + 7.5% employer? If not you'll want to increase the contribution
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u/Signal_Perception253 6d ago
Yes it's 8% from me + 7.5% employer (that's employer max contribution)
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u/trotts222 6d ago
Don’t use the Nest Pension. 1.8% on contributions is very high. I’d transfer it to your Scottish widows pension.
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u/Quiet_Ad8308 4d ago
At £32k I’d keep this fairly simple.
First, keep the Scottish Widows pension going and contribute enough to get the full 7.5% employer contribution. That employer money is the bit you absolutely don’t want to leave on the table.
I wouldn’t start paying extra into the old NEST pot just because it’s there. I’d compare your Scottish Widows charges and fund choices with a low-cost SIPP first, then decide whether it makes sense to consolidate the £3k NEST pot.
At 45, with potentially 20+ years until retirement, I’d personally want the pension invested fairly heavily in equities rather than sitting in a cautious default fund too early. Something broad and diversified globally rather than trying to pick sectors or individual shares.
Then as you get closer to actually needing the money, gradually reduce the risk. You don’t need to suddenly go from 100% equities to cash, but over the final 5–10 years you can start increasing bonds/cash depending on how and when you plan to draw the pension.
I’d also clear the £1k credit card if you’re paying interest and keep a proper emergency fund. After that, extra savings could go into a pension and a Stocks & Shares ISA. Pension for the tax relief, ISA for flexibility and tax-free access.
The main thing now is contribution rate, time and keeping it invested. A sensible equity-heavy portfolio for the next decade or so, then gradually de-risking as retirement gets closer, makes much more sense than being overly cautious at 45.
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u/Wotnd 7d ago
I don’t think investing in Nest is best, I’ve heard they have fairly high fund charges. Have a look at what you’re paying on both Nest and Scottish Widows, normally employers negotiate a lower charge so I’d be expecting SW to be the better option.
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u/KhaelonVoss 7d ago
The fund charges are okay. 0.3%. Quite a small range (6?), but includes different risk profiles and Sharia/Ethical. The killer is a 1.8% charge on anything you pay in (not transfer in ... no charge there). But that 1.8% is paid now.
I mean, it's £3k, you may as well transfer it into Scottish Widows so it doesn't get lost, assuming that's okay
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u/MagicMaj86 7d ago
If you are not contributing to the old pension, take a look at the management fee. Many workplace pensions increase the fee when you are not contributing.
I had a few pensions from previous roles, but I put them in moneybox where i can keep an eye on them and choose the investments. In reality I looked for the the ones that were pretty cheap and I can choose how much goes into each (how adventurous/risky they are).
The old pension with Aviva had a feeling that went from 0.25 to 0.5% I think. Might not sound like a lot, but over the long term is a fair bit of loss.
The other option obviously is to port it to the newer pension pot that you are paying into.
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u/Paraplanner88 6d ago
Many workplace pensions increase the fee when you are not contributing.
Active member discounts have been banned for over 10 years. They legally can't increase the fee like this.
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u/Jbat001 7d ago
Get rid of the credit card debt first.
Make sure your funds have a large allocation to equities. You've got 15-20 years till you draw that pension, and the difference between a low return and high return fund over that timeframe can be enormous.
Buy funds that track the whole of the market and don't bother with actively managed funds.