Should I pay more into company pension, or is there a better way to save?
In the UK you have an allowance of £40,000 per annum for tax relief into a pension. This amount includes both your and your employer's contributions. If you earn more than £150,000 per annum this allowance starts to reduce and if you earn less than the allowance, your allowance is limited to what you earn. You can also carry over unused allowance from up to 3 years previously. If you stick within this allowance you won't pay tax on your pension contributions, if you go over the excess will be subject to tax. Salary exchange normally lets you avoid the National Insurance value of your contribution being taxed. If you paid your own money into your pension (without going through salary exchange), your contributions would have the 20% basic rate of tax credited to them and if you're a higher rate taxpayer you could reclaim the difference between the basic rate of tax and the higher rate of tax you pay but the National Insurance you've paid on your own money would not be reclaimable. You can't get the money back you've paid into your pension till you are are 58 (given that you are 27 now), the minimum age has risen from its historic 55 for your age group.  That's the pension trade off, you forgo tax now in the expectation that, once retired, you will be paying tax at a lower rate (because your income will be lower and you are much less likely to be subject to higher rate taxation) in return for locking in your money till you're older. Your pension income will be subject to tax when you eventually take it. There are other options such as ISAs which have lower annual limits (£20,000 currently) and on which your contributions do not attract tax relief, but which are not taxed as income when you eventually spend them. ISAs and pensions are not mutually exclusive so if you have the money, you can do both. It's up to you to determine what mix of savings will be appropriate to generate income for your eventual retirement. If you are living in some other country when you retire your pension will be paid net of UK tax. You might then be able to claim (or pay) any difference between that and your local tax rate depending on what agreement exists between the UK government and the other country's government. "Re: Specifically, am I right in that everything I put on these is deducted from tax, or are there other rules? and  Am I correctly understanding this as ""anything above £3,600 per year will not be deducted from your tax""? Neither interpretation seems quite right… Unless what you mean is this: The contributions (to a pension, or to the share-save scheme) are deducted from your pay before it is taxed. That's how it works for employer-run pension schemes. In other words, you are paying the gross amount you earn into the pension, not the amount after tax. It's a tax-efficient way to save, because: compared to other forms of saving: (The bit about the £3,600: you can ignore this assuming you're earning more than £3,600 a year.) What happens to the pension if you decide to move back to France or another country? In some cases you can transfer tax free. Worst case, you'd pay some tax on the transfer but not more than 25%. [See here for the current rules: https://www.gov.uk/transferring-your-pension/transferring-to-an-overseas-pension-scheme. Re: the share scheme, if by 'salary exchange' you mean salary sacrifice (where your gross pay is officially reduced by that amount e.g. £150 a month), that's even more tax-efficient, because it saves you paying the National Insurance contribution too (approx 9% of the pay packet). Conclusion: Saving into pension and company share save schemes is supremely tax-efficient and, provided you're OK with your money being locked away until you're 57 (pension) or tied up in company shares, it's understandably many people's priority to make use of these schemes before considering other forms of saving where you pay into them from your salary after tax. Now, about this: I am trying to understand how much I should put into it Should I put money into these, or should look for another way to save (how will this work out if I go back to France or another country)? Nobody here can advise you what to do since individuals' goals and circumstances are different and we don't know enough of the picture. That said: FWIW, I'll tell you what I might do based solely on what you've told us in the question… First, I'd definitely contribute 6% to the company pension. This gets you the full employer match. That's free money (plus, remember the tax relief = more free money). If you're 27, a total of 12% salary into a pension a year is a decent rate to start saving for retirement. Actually, 14% would be generally advisable, and maybe more still – it's generally a case of 'the more the better' especially while young, as you have time for growth and you don't know what later priorities might change / financial needs might arise. Nevertheless, you said you might move overseas. So in your position I would then:"
&gt; Pensions should be held in an arms length trust independent trust and the company should have no access to it.  This is, at least theoretically, the situation in the United States.  There are plenty of restrictions as how trust assets are protected from the company itself.  &gt; All workers should be paid before executives or creditors see dime one.  All employees in the United States, that have benefits on an underfunded pension plan are protected by the PBGC.  It is 'pension insurance', and will make up the difference in any participant's pension.  It doesn't provide preferential payments to 'executives last', but it does cap payments at a certain amount - it's about $60k/year in 2017.  &gt; This is why unions need to get their shit together and break these laws for the rich, by the rich.  Unions take money away from workers, too, in the form of dues.  They also have the capability of running companies into the ground.  GM and Hostess are two examples that got plenty of press.  Unions are important, don't get me wrong.  But there is no 'rich' here to rob.  This company has been going downhill for 30 years, and they are downright terrible.    &gt; When one of these execs walks away with millions of worker's earnings in their pockets  US perspective:  If this happens, it's because they deferred their own salary.  They took a pay cut, basically lending their money to the company.  These plans aren't protected under bankruptcy, so if the company fails, they lose the vast majority of their pension.  There is no protest needed.  The laws are just fine in this particular case.  &gt; If you let them steal your lunch money without a black eye you'll starve.   There really isn't any lunch money stolen here.  Just a terrible company with short-sighted management, who missed the boat on technological improvements 25 years ago. Defined Benefit Plans: Defined benefit plans are disappearing because of their high cost to the companies that provide them.  When an employee retires, the company must pay his pension for the rest of his life, even longer if the pension includes a survivor option.  Thus the company's financial burden grows as more employees retire.   By law, they must provide a fund that has sufficient resources to pay all present and future pensions.  Low interest rates, such as we have now, place a greater burden on the amount that must be in these funds.   For these reasons, most companies, including large ones like IBM and Lockheed Martin, have discontinued their pension plans and provide only defined contribution plans.   Defined Contribution Plans: These require the company to only make contributions while the employee is working.  Once the employee retires, the company's responsibility ends.  Usually these plans employ a 401K type savings plan for which the employee contributes and the companies matches some or all of that contribution.  Comparison: Although a fully company paid pension plan is the best, it is now almost unavailable.  The defined contribution plan, if it includes company matching, can be a viable alternative if the investments are chosen wisely and perform as expected.  Of course, this is not guaranteed but is probably the best option that most working people have at this time. Basically you have 4 options: Use your cash to pay off the student loans. Put your cash in an interest-bearing savings account. Invest your cash, for example in the stock market. Spend your cash on fun stuff you want right now. The more you can avoid #4 the better it will be for you in the long term. But you're apparently wise enough that that wasn't included as an option in your question. To decide between 1, 2, and 3, the key questions are:  What interest are you paying on the loan versus what return could you get on savings or investment?  How much risk are you willing to take? How much cash do you need to keep on hand for unexpected expenses? What are the tax implications? Basically, if you are paying 2% interest on a loan, and you can get 3% interest on a savings account, then it makes sense to put the cash in a savings account rather than pay off the loan. You'll make more on the interest from the savings account than you'll pay on interest on the loan. If the best return you can get on a savings account is less than 2%, then you are better off to pay off the loan. However, you probably want to keep some cash reserve in case your car breaks down or you have a sudden large medical bill, etc. How much cash you keep depends on your lifestyle and how much risk you are comfortable with. I don't know what country you live in. At least here in the U.S., a savings account is extremely safe: even the bank goes bankrupt your money should be insured. You can probably get a much better return on your money by investing in the stock market, but then your returns are not guaranteed. You may even lose money. Personally I don't have a savings account. I put all my savings into fairly safe stocks, because savings accounts around here tend to pay about 1%, which is hardly worth even bothering. You also should consider tax implications. If you're a new grad maybe your income is low enough that your tax rates are low and this is a minor factor. But if you are in, say, a 25% marginal tax bracket, then the effective interest rate on the student loan would be more like 1.5%. That is, if you pay $20 in interest, the government will then take 25% of that off your taxes, so it's the equivalent of paying $15 in interest. Similarly a place to put your money that gives non-taxable interest -- like municipal bonds -- gives a better real rate of return than something with the same nominal rate but where the interest is taxable. the pots will be negligible, however this capital could be used better elsewhere if I was to withdraw them. You won't be able to withdraw the money. Notwithstanding the recent 'pension freedom' changes, money put into a pension is still inaccessible until age 55 at the very earliest, and probably later by the time you get there. You should have been Advised of this every time you enrolled into a scheme, although it may well have been buried in something you were given to read. The best you can do (and what I would recommend, although of course this post isn't Advice) is to transfer the pensions to a personal pension, for example a SIPP, wherein you will be able to control where the money is invested. Most SIPP providers will gladly help you with such transfers. Would it be beneficial to keep these smaller pots with their respected schemes The reason I suggest transferring is that leaving the funds in workplace schemes that are no longer being contributed to is a surefire way of finding yourself invested in poorly-performing neglected funds, earning money for no one beyond the scheme provider. If it were possible to take a loan out for a SIPP investment in the future .. I would suggest having an equivalent invested amount already in an ISA .. simply to cover you in the event of a job loss including additional cash in a deposit account. Secondly .. to increase your chances of success with this strategy I would also suggest doing this when the odds are more in your favour during the bottoming out cycle of a market crash. Thirdly .. it depends on how knowledgeable you are about investment , I would suggest being invested globally & in many different sectors to take advantage of various price movements. If your employer does not offer contribution matching, and you don't like the range of investment options provided by the company 401k, then you probably are better off investing in your own IRA instead.  In an IRA held at a bank or brokerage, you can invest in multiple stocks or funds and move money around within the IRA pretty freely in most cases. If your company is doing well and is actually sharing profit into the 401k, you might consider leaving your 5% contribution to the 401k where it is and put the other 5% you are planning to contribute into a new IRA of your own.  This straddles the risk of you losing money if your company 401k tanks (or profit sharing dries up) and your missing out on profit sharing if it continues to pay well. "The only time to stop saving money for retirement is when you have enough money to retire tomorrow. Not all of your ""retirement savings"" need to be in a 401k, it is just better if you can. Be sure to get as much as you can from the employer matching program.  Unfortunately some employer matching programs discourage you from putting in too much.  I've been able to max out the 401k contribution a number of times, which helps. Remember:  you are likely to live to 100, so you better save enough to live that long.  I don't trust social security to be there.  I recommend saving so that you end up with ""enough to be comfortable"" -- this is usually about 25x your current income - PLUS inflation between now and when you plan to retire (age 62 is a good target). It is worth knowing your ""retirement savings number"".   If you are making $100K per year now, you need to target $2.5M - PLUS allowance for inflation between now and when you plan to retire. This usually means you need to also arrange to make more money as well as save as much as you can and to use passive investing.  Finance advisors are not worth it if you have less than $1M to invest." Adding to the excellent answers already given, we typically advise members to contribute as much as needed to get a full employer match in their 401K, but not more.  We then redirect any additional savings to a traditional IRA or ROTH IRA (depending on their age, income, and future plans).  Only once they've exhausted the $5000 maximum in their IRA will we look at putting more money into the 401K. The ROTH IRA is a beautiful and powerful vehicle for savings.  The only reason to consider taking money out of the ROTH is in a case of serious catastrophe.