Pension when not hitting higher tax band

[mrmeindl]

Hi guys, sorry if i'm asking too basic a question I'm only beginning to look into the relevant details now. If there's basic stuff I should read before asking questions please point me in the right direction.
Basically I'm 30 and starting a permanent job in a few weeks time as I've just finished my long years in college. I'm starting on 32K + health insurance in an Engineering firm, the pay should go up quite quickly after I've got experience in my first year.
My question is; Should I bother making any pension contributions to a pension while I'm not hitting the 40% tax band? This year i'll pay very little tax due to starting work in June. My employer has an AVC pension scheme but I'm not sure about joining it while on 32k.

So should I join the AVC scheme, join a PRSA/PRB that's independent of my employer to make life easier if I get a job elsewhere or just save the money and throw it into some sort of pension next year or the year after when I'm on over 32? I'm renting at the moment and I've no debts but no savings either!
Or alternatively should I just save money and hopefully use that for a house deposit eventually?

Sorry for the typed diarrhoea, any responses are appreciated.

 

[Brendan Burgess]

If your employer matches your contribution, then you should contribute as much as is allowed. In other words, if they contribute €3,000 because you contribute €3,000, then you should contribute €3,000. If they contribute 10% whether or not you contribute, then the following applies:

You should not contribute to a pension unless you are getting the full tax relief on it.

But you should save the money which you would have contributed.

I would go further and say that you should not contribute to a pension scheme at all until you have saved up the deposit to buy a house. That is the most financially efficient and tax effective way of saving. When you have bought a home and got your mortgage down to a comfortable level, then contribute to a pension.

Brendan