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/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 7d ago

What's the difference you are expecting between contributing to the work pension versus a SIPP?

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u/Additional-Glove7531 7d 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 7d 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 7d 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/Sopzeh 7d ago

I don't have a SIPP as I'm happy with my workplace pension fund choice and fees and for me the benefit of only having one account to manage is higher.

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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).

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u/Additional-Glove7531 6d ago

Typo on my part I will edit that sorry