Why I Opted Out Of A Company Pension Plan

So when LearnDash was acquired by Liquid Web some technicalities changed with the work conditions, namely I became an employee rather than a contractor. 

This meant as I’m employed in the UK I’m entitled to be enrolled in a pension with company matching. 

Yet, I decided to opt-out? And at this point you’re most probably thinking that’s a dumb decision. After all there’s a small tax break, and free money from the company towards retirement. 

Why would I opt out of that?

Well… Let’s look at the previous performance of the FTSE 100 index, that’s the top 100 companies on the stock exchange in the UK. 

Since 2002 the highest 10 year return historically has been a rather crap 4%. To put that into perspective this year saw Food prices increase on average 22% and the energy cap being raised 54%, not to mention the increase in national insurance. 

And that 4% return was the absolute high of the past 20 years. Some years the FTSE 100 was down 4%. 

So if the markets were timed perfectly I’d be walking away with a 4% compounding interest rate. Or in other words way less than inflation. All to have my money locked up for 30 years. 

Doesn’t sound so appealing when you put it like that does it?

If you follow me on Twitter you’ll know I like building a side project or too, and I have plans for other businesses as well. If you want the really short version of why I opted out the pension plan? 

That’ll be because I’m confident in my ability to get a greater return on my money than a pension company.

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