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Think beyond salary when changing jobs

Wow, 5,528 of you have read this.
 hand-holding-50notes_69762-1If you’re one of the many people who consider changing their job or career at the start of a new year, then this one is for you!

Of course there are usually a combination of reasons for wanting to change jobs: better career prospects, opportunities for personal development, shorter commute, higher salary etc

A new company will have to offer a higher salary to attract you to join in the first place – you are taking a personal risk in effectively starting your career again in a company where no-one knows you and your skills and capabilities, and you have to start building your credentials and track record again from scratch. So the headline salary is bound to be attractive, but I would urge you strongly to look a lot deeper and to consider and compare the whole benefits package that’s being offered.

All of these other benefits can be hugely valuable and we usually under-estimate them– especially our pension plan. This is the area that deserves most scrutiny and I would urge you to look into this in some detail.

There is a long list of potential employee benefits that you should consider, alongside salary, the most important of which is the pension plan. What % of your earnings is the new company going to contribute to a pension plan on your behalf, and how does this compare to your current company? Which company runs the pension funds and how much choice do you have? How much are you allowed to contribute within the scheme rules?

How much life cover (death in service) is being offered: 2x salary, 4x salary, 10x salary? and how does this compare with what you currently have ?

As well as access to private health insurance, what is the Sick Pay provision i.e. how many days will they continue to pay your full salary if you have to be off sick for a period of weeks or months ? Does the company offer an Income Protection policy that will pay out to replace your salary if your incapacity extends beyond a few months?

Then there is paid holiday, parental leave, childcare vouchers, share options, even redundancy provision, which can vary greatly from company to company.

All of these other benefits can be hugely valuable and we usually under-estimate them– especially our pension plan. This is the area that deserves most scrutiny and I would urge you to look into this in some detail.

If you make the big move from employed to self-employed, the majority of these employee benefits are lost completely. So you should factor in starting a personal pension plan and paying for the protection or insurance cover that is most relevant for your circumstances, recognising that personal plans usually have higher monthly premiums than Group policies through an employer.

A good Financial Planner can help you see the “big picture” and can summarise exactly what your current total compensation and benefits package is worth, and compare it to what’s being offered by a new company…..not least so you don’t get blinded purely by the lure of a higher salary – which after tax, national insurance and pension contributions may not be quite the % increase you had initially thought! And if running your own business is your future direction and passion, then just ensure you are fully aware of those benefits you might want to replace once you’re self-employed.

Happy job hunting in 2015 🙂

To receive a complimentary guide covering Wealth Management, Retirement Planning or Inheritance Tax Planning, please contact Amanda Redman on 07801 045587, email amanda.redman@sjpp.co.uk or visit www.amandaredmanfp.co.uk

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