Over contributing to workplace pension or private pension
"Firstly (and this part is rather opinion-based) I would absolutely not think of making more pension contributions when you are currently totaling 6% of salary as ""over contributing"". There are some who argue that you should be putting a minimum of 20% away for retirement throughout your working life; you don't say how old you are / how close to retirement you are, but a common rule of thumb is to halve your age and put away that % of your salary into your pension. So I would certainly start with upping those contributions.  I actually don't think it makes much difference whether you go for just your workplace pension versus a separate private one - in general you end up paying management fees that are a % of the value, so whether it is in one place or split doesn't cost any less. The ""all eggs in one basket"" syndrome is a possible argument but equally if you change jobs a few times and end up with half a dozen pension pots it can be very hard to stay on top of them all. If you end up with everything in one pot and then transfer it when you change jobs, it's easier to manage. Other options:   ISA as you mentioned; on the plus side these are tax free. On the minus side, you can either go for a cash ISA which at the moment has very low rates of return, and/or a stocks and shares ISA which exposes you to risks in the stock market.   If you have debt, consider paying it off early / overpaying. Student loans may or may not be the exception to this depending on your personal situation. Certainly if you have a mortgage you can save a vast amount by overpaying early.   Other investments - stocks and shares, BTL housing, fine wines, Bitcoin, there are almost limitless possibilities. But it makes sense to max out the tax-efficient options before you look into these."
"I don't understand the worker mentality of accepting to be part of pension plans. The downside risk to you is ridiculously high -- you're basically making an investment that the next 30 years of corporate management and the company as a whole are going to be good. Pension plans are among the first to go.. employees that retired 20-30 years ago add no current value to the company, unless you consider that current employees are motivated by the idea of a pension or working for a company that ""takes care"" of its employees.  Also, part of the reason pension funds are blowing up is that the risk-free return rate is less than 1%. I don't know who to blame or thank for that, but with government bonds now trading at negative yields in real and sometimes even absolute terms (see: Swiss yields), what else are you supposed to do?" I agree, i don’t think it was always like this. Here is a little story I was told about the coal miners in the Uk. Coal mining was massive industry in the uk for about 150 years, (its the reason the world ended up getting railways, symbiotically) the mines as usual was located in the poorer regions but they was good paying jobs for the working man, anyway along with the birth of the industrial revolution came unions and with unions came protection and in turn pensions. So together these minors saved and saved heavily, there pension pot swelled, unfortunately though the mining industry was hazardous one and these minors died young... anyway fast forward to the 70s Margret thatcher Ronald Regan, and the closure of mines. There was a lot less minors by then and a huge pension pot, every minor in the country could have stopped paying into the pension and retired before 50. Thatcher did not like this and neither did the wealthy bankers, so they stole it all and made new pension rules, Most of your arguments are actually bullshit assumptions that can be easily refuted.  You know what Hedge funds do to pensions? They fleece the pensions with fees and performance bonuses, but take no downside. Even that commie [Warren Buffet bets against them](http://www.forbes.com/sites/mitchelltuchman/2013/07/18/hedge-fund-vs-index-fund-a-comparison/). A simple indexed fund will outperform almost any hedge-fund just left on its own. And they won't be exposed to those great AAA rated CDS's that screwed over so many pension funds during the GFC. Oh, and who put those together? Investment Bankers...  As for the company in distress, it really seems like you have no idea how these things work. If a private equity jumps into a company, it is because of one of two things: Either they can realise a quick buck by dismanteling the company and selling off it's assets, or it's a company that has good revenue, but too many costs, in which they just trim down by fireing everyone they can get away with. They help no one buthemselves and the very few that get to keep their job.  To say that due to their long hours, investment banking analysts make sweatshop salaries is just a horrible misguided joke. even assuming they log in 100h a week for 52 weeks in a year, an [average intern salary](http://www.careers-in-finance.com/ibsal.htm) is of $24/hour, which as you see from the article, is well above any salary of any of the social workers (not just first years). And these go up by around 20% a year. Then, of course, you should add into the equation the fact that anybody working a consisten 100h a week is going to be very prone to making mistakes.  As for that fantastic skill-set you say you learn on the job, I would really love to see a study of some sort in which they compare the value added of an ivy league genius against that of a good student from a public university. Maybe then all of these bold assertions of how fantastic they are will fall to the ground.   The article does not have a lot of quality to it, but it does speak of an important matter. The amount of skilled workers that go into finance and investment banking is disastrous for the economy. If those minds could be applied to actually building things, inventing life-improving services, or generally organising society better, the whole world would be much better off than using those minds to try and outsmart eachother in ways to get investors money into the pockets of the hedge-fund managers and private bankers. "Why? Simply: because it has been mandated as law, and so you may have no choice in the matter whether to contribute or not. Quoting from GOV.UK – Workplace pensions: ‘Automatic enrolment’  A new law means that every employer must automatically enrol workers   into a workplace pension scheme if they: Next: even if you think you will work ""until you die"", you can still access the money saved in the pension scheme when you attain the required minimum age for withdrawals under your scheme. For instance, that may be age 55, but it may also vary by scheme. Becoming fully retired — as in stopping all work — is not a requirement to access retirement income from your pension scheme. In the eyes of a pension scheme, retirement is typically when you elect to take your income benefits according to the established rules of the scheme. Quoting from nidirect – Working past State Pension age: Continuing in work and your workplace pension  If you reached the age at which you can start claiming your workplace   pension scheme, you don't need to stop work in order to claim. You have   a number of options, including taking some of the pension you've built   up while continuing to work for the same employer. As to why things are set up this way: While some younger folk may, today, expect to continue working until death, for a variety of reasons that isn't always possible. Two typical such reasons are: disability, and involuntary unemployment (i.e. willing and able but still can't land the next job). Moreover, plans change. Young workers with health and vitality may expect they'll always feel invincible, but end up learning otherwise over time, and may come to appreciate the savings that were forced upon them. The ""forced savings"" aspect of state and state-sponsored pension schemes are meant to provide some safety net for those later years when it is a strong possibility that one can't continue to work. The alternative is to be a 100% burden on family and/or society." "The company itself doesn't benefit. In most cases, it's an expense as the match that many offer is going to cost the company some percent of salary.  As Mike said, it's part of the benefit package. Vacation, medical, dental, cafeteria plans (i.e. both flexible spending and dependent care accounts, not food), stock options, employee stock purchase plans, defined contribution or defined benefit pension, and the 401(k) or 403(b) for teachers. Each and all of these are what one should look at when looking at ""total compensation"". You allude to the lack of choices in the 401(k) compared to other accounts. Noted. And that lack of choice should be part of your decision process as to how you choose to invest for retirement. If the fess/selection is bad enough, you need to be vocal about it and request a change. Bad choices + no match, and maybe the account should be avoided, else just deposit to the match.  Note - Keith thanks for catching and fixing one typo, I just caught another." 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. My uncle seen the writing on the wall a year or two ago. He retired early and got his pension out of the company. Apparently the pensions are invested back into the company so they don't only loose their job when the company fails. Your total salary deferral cannot exceed $18K (as of 2016). You can split it between your different jobs as you want, to maximize the matching.  You can contribute non-elective contribution on top of that, which means that your self-proprietorship will commit to paying you that portion regardless of your deferral. That would be on top of the $18K. You cannot contribute more than 20% of your earnings, though. So if you earn $2K, you can add $400 on top of the $18K limit (ignoring the SE tax for a second here). Keep in mind that if you ever have employees, the non-elective contribution will apply to them as well. Also, the total contribution limit from all sources (deferral, matching, non-elective) cannot exceed $53K (for 2016).