I begin employment next month (recent grad).I was wondering whether I should participate in the company pension scheme (The organisation will match my contribution, up to a certain amount).I'll be living rent free, so am able (and planning) on saving a substantial proportion of my salary.I'm kinda lost in the sea of terminology and detail. What I would like to know is if there are any medium term (8-10 years) benefits of contributing?

I don't understand what you're asking; the earlier you start putting money into you pension, the richer you'll be upon retirement. Whilst you've got money to burn, put as much in as you can. My company puts in 7% if I put in 3%, or 10% if i put in 5%, so as you can see, the equivalent interest rate would be massive.

Pension schemes are for idiots who cant invest moeny for themselves. If you cant get a 5% annual return on cash your an idiot. Sorry, there are not two ways around it.

To "??",What I want to know is:- Should I participate in the pension scheme offered by the employerOR- Should I save/invest the money that would have gone into the pension scheme?To Pirlo, this is along the lines of what I was thinking. I know of ways to gain at least a 6% return on savings/investment. Is there really any point in participation aside from the tax benefits.

You had all better be kept away from any financial workstreams...If the company will match contributions, it is madness not to take full advantage - if it is pound for pound then that's a 100% return starightaway.As a higher rate taxpayer, every £100 of investment only costs you £60 (if you do it by a 'smart pension' or remember to reclaim the higher rate element). That's another instant return, of 40%.It is likely that the funds offered will not be particularly exciting and may not perform as well as the best in the open market, but it as long as they are at least competently managed and match their benchmarks then it is worth accepting this as a means of profitting from the matching referred to above.What you SHOULDN'T do is put any more into your company scheme than is necessary to extract the maximum amount from your employer. This is where your own investments come in.At such time as you change jobs you can take the cash out and then select your own funds into which to reinvest it, thus having your cake and eating it.There are no medium term benefits of pension investment now, as far as I am aware, apart from the increaed effectiveness of contributing now and thus a reduced need to contribute later on.

Thank you very much. That was the kind of response I was seeking.

I’ve just started work, and when I started in the company pension scheme I was told that upon leaving I would be able to withdraw the cash I have invested and do with it what I will. Now I was surprised at that so I questioned the point, and was told that I could do anything with it, like buy a car/house. This seems a bit strange, can I assume that the HR person I was talking to knows FA or what they really meant was I could put it into any pension scheme I want? There’s no way I can get my grubby paws on what I put away until I retire is there?PS Pirlo, If you put in 3% and your co puts in 7% then that’s a 233% return on investment. Which beats the 6% you can get with the ICICI. And you aways go on about how clever you are…..

Excuse my ignorance, but would that be a % of the gross or net monthly income?Thanks in advance.

Percentages are usually expressed relative to gross salary.You can sometimes get your mitts on the pension money before you retire, I believe, but you would have to pay the tax back. I'm not 100% certain of this though, it's not something I've ever looked into. I'm not sure it would be a wise thing to do unless you were desperate for the cash.

I'm pretty sure you can only get funds out of your pension before reaching age 55 if you die (and its not a lot of good to you then) or are given a life expectancy of less than 12 months. There used to be ways of taking the fund into overseas jurisdictions which allowed greater flexibility; however, I'm not sure if these still exist and I seem to recall they were pretty restrictive and expensive ways of trying to dodge the system