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  • FIRST POST
    • JustAnotherSaver
    • By JustAnotherSaver 21st Sep 16, 9:57 PM
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    JustAnotherSaver
    NEST Pensions - increasing contributions?
    • #1
    • 21st Sep 16, 9:57 PM
    NEST Pensions - increasing contributions? 21st Sep 16 at 9:57 PM
    My sister was showing me her NEST pensions portal as my employers are not with NEST & i was curious how the NEST portal looked.

    I noticed 2 things....

    * It seems you can only increase your contributions by a money value, not a percentage value - not so good if your pay fluctuates.
    * If you want to increase your contribution percentage from the minimum 1% then you need to speak with your employer.


    Well my wife is being auto enrolled this month. Actually they were last month but apparently the accountant messed things up.

    My wife told her employer that she wanted to increase her contributions as she'd been told (from what i read on my sisters portal) that she needed to inform her employer of this.



    Her employer (who is totally against the workplace pension thing & seems to like to remind the employees of this from time to time with various comments) told my wife .......... that they (employer) don't know how to do that & if my wife finds out how then she's to tell her employer who will then get it done.


    This was followed with a panic of - i don't have to pay in any more myself (i.e. match) do i?!?!?


    To be specific, my wife wants to pay in an additional 4% to make a total of 5% each month.
    What does she need to tell her employer (without any sarcastic remarks) that they need to do in order to make it happen?






    Would be so much easier if she could do it herself through her own portal (when she gets given the details).

Page 1
  • jamesd
    • #2
    • 21st Sep 16, 10:03 PM
    • #2
    • 21st Sep 16, 10:03 PM
    It's not really a great move to pay in more than the minimum that gets employer contributions into NEST. They have an initial charge per Pound paid in and not particularly low ongoing charges so she can probably get a better deal somewhere else for the extra.

    There is already a scheduled set of increases to the amounts:

    Now: 2%: 1% employer, 0.8% employee, 0.2% tax relief.
    April 2018: 5%: 2% employer, 2.4% employee, 0.6% tax relief.
    April 2019: 8%: 3% employer, 4% employee, 1% tax relief.

    Those are based on qualifying earnings which is a lot less than total earnings for low earners. Employers don't have to use qualifying earnings, then can use full earnings if they choose. If trying to save money they will choose qualifying earnings because it's cheapest for them.
    Last edited by jamesd; 21-09-2016 at 10:09 PM.
    • JustAnotherSaver
    • By JustAnotherSaver 21st Sep 16, 10:57 PM
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    JustAnotherSaver
    • #3
    • 21st Sep 16, 10:57 PM
    • #3
    • 21st Sep 16, 10:57 PM
    Interesting.

    Would you take the same stance regards putting in more than the minimum in to now pensions?

    I'm not challenging you here, just wondering what your opinion is because i remember you from a few years ago & you were very helpful.


    Back on topic though - she was wanting something percentage related & not amount, so that it just gets invested based on what she earns in the month.

    I personally could be anything around 1,200 - 1,800 so quite a range. If it was me & i was to say i want to throw in another 100 then it'd obviously have more impact on me if i had had a bad month that month, but if i was to say x-% then it's the same regardless.

    • xylophone
    • By xylophone 21st Sep 16, 11:16 PM
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    xylophone
    • #4
    • 21st Sep 16, 11:16 PM
    • #4
    • 21st Sep 16, 11:16 PM
    Why not simply pay as much into Nest as gets the matched employer contribution and open a private pension for whatever else she wishes to contribute?
    • dunstonh
    • By dunstonh 21st Sep 16, 11:28 PM
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    dunstonh
    • #5
    • 21st Sep 16, 11:28 PM
    • #5
    • 21st Sep 16, 11:28 PM
    NEST is a budget option aimed at small employers who cant get access to the mainstream providers. You wont get all the bells and whistles with it.

    The employer is being an idiot. Tell them to pull their fingers out (in a way that doesnt get her sacked)
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
  • jamesd
    • #6
    • 22nd Sep 16, 12:03 AM
    • #6
    • 22nd Sep 16, 12:03 AM
    Would you take the same stance regards putting in more than the minimum in to now pensions?
    Originally posted by JustAnotherSaver
    NOW:Pensions doesn't have the 1.8% charge deducted from the amount paid in. The NOW:Pensions fund management charge is 0.3% a year, same as NEST. No restrictions on transferring in or out. So no, no reason for me to have the same stance because it doesn't have the same extra cost and restrictions. If an employee doesn't like it they can pay in, get the employer contributions and periodically transfer out.
    • dunstonh
    • By dunstonh 22nd Sep 16, 11:33 AM
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    dunstonh
    • #7
    • 22nd Sep 16, 11:33 AM
    • #7
    • 22nd Sep 16, 11:33 AM
    According to posters on the NOW pensions thread, they are suffering major administration problems at the moment with many months delay.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • JustAnotherSaver
    • By JustAnotherSaver 22nd Sep 16, 11:28 PM
    • 1,867 Posts
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    JustAnotherSaver
    • #8
    • 22nd Sep 16, 11:28 PM
    • #8
    • 22nd Sep 16, 11:28 PM
    matched employer contribution
    Originally posted by xylophone
    After what i said, it should come as no surprise that her employer is only paying in the minimum that they have to.

    NEST is a budget option aimed at small employers who cant get access to the mainstream providers. You wont get all the bells and whistles with it.

    The employer is being an idiot. Tell them to pull their fingers out (in a way that doesnt get her sacked)
    Originally posted by dunstonh
    What are the other options for the employer? Not that my wife would be able to get them to change who they go with i guess. Why would they lump with NEST over one of the other options?

    NOW:Pensions doesn't have the 1.8% charge deducted from the amount paid in. The NOW:Pensions fund management charge is 0.3% a year, same as NEST. No restrictions on transferring in or out. So no, no reason for me to have the same stance because it doesn't have the same extra cost and restrictions. If an employee doesn't like it they can pay in, get the employer contributions and periodically transfer out.
    Originally posted by jamesd
    Ties in with what an IFA i saw said to me - basically with NOW:Pensions i should pay in as much as i can afford to (my employer also doesn't pay any more than the minimum).


    According to posters on the NOW pensions thread, they are suffering major administration problems at the moment with many months delay.
    Originally posted by dunstonh
    I was speaking with payroll recently & they mentioned some of the trouble they'd had with delays.

    This also links in with bits i've read online, including from supposed NOW:Pensions employees who were basically slating NOW:Pensions - talking about all these delays.


    What would you advise as a wise approach?

    Currently i have just increased my contributions with NOW:Pensions to 10% (9% additional + 1% compulsory).
    My wife will currently be paying in 1% to NEST.

    We both earn about the same & we both also pay a small amount (100pm each currently, although we're thinking of changing that in the new year) into a S&S ISA that is with Skandia / Old Mutual Wealth (or whatever they're called these days).



    I don't really like paying in money values to be honest. So i don't like to say - i will pay in 50 per month for example. I would much prefer to say i will have 10% of my wage automatically paid in, but then i guess this would have to be done at the payroll end & unless it's managed by payroll then i can't see how it could work that way.

    • dunstonh
    • By dunstonh 23rd Sep 16, 10:31 AM
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    dunstonh
    • #9
    • 23rd Sep 16, 10:31 AM
    • #9
    • 23rd Sep 16, 10:31 AM
    What are the other options for the employer? Not that my wife would be able to get them to change who they go with i guess. Why would they lump with NEST over one of the other options?
    Most of the insurers want 15+ employees or a certain contribution level. For smaller employers, there are not as many options but there are several. The employer decides which. Some will research. Some will go with the first one they find.

    NEST is not profitable and has taken more money from the Govt. NOW is suffering admin problems. The reason the main insurers didnt want to deal with small schemes is that the charges against the premiums are smaller than the costs of administration. So, these providers that deal with the small employers appear to now be suffering from that by either cutting costs and creating bad admin or losing money.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • JustAnotherSaver
    • By JustAnotherSaver 23rd Sep 16, 1:14 PM
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    JustAnotherSaver
    As far as my wife goes, they'd fall short of the 15+ since there's only about 8-10 of them.
    Where i work there's probably 30-40. Not big numbers but more than the 15 you mention.



    So am i correct in thinking....

    * Since there's not the same charges with NOW:Pensions, i am ok to continue paying in 10%
    * but my wife should only pay in her 1% due to the charges with NEST

    * and so then any extra she wants to pay in should go in to her S&S ISA instead?


    As a side note, we're going to be going with a different IFA come the new year for our S&S ISA management. We're not really happy with the current guy & we spoke with the chap who was fantastic with handling our house purchase but he said that they will be unable to 'take over' handling of our S&S ISA until we had been with the other chap for 5 years (which is this Xmas).


    The S&S ISAs we hold are currently with Old Mutual Wealth but i don't know who the new guy will be using.

    Plus then there's this LISA next year isn't there. I wonder if we'd be able to or whether it'd be good to transfer our S&S ISA into one of those come the time.

    • xylophone
    • By xylophone 23rd Sep 16, 4:20 PM
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    xylophone
    See post 4.
    • JustAnotherSaver
    • By JustAnotherSaver 23rd Sep 16, 8:44 PM
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    JustAnotherSaver
    See post 4.
    Originally posted by xylophone
    What is a good place to go for the private pension then?
    Or maybe a better question may be what is good to avoid? With the fees.

    • xylophone
    • By xylophone 23rd Sep 16, 11:51 PM
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    xylophone
    She could try here

    https://www.cavendishonline.co.uk/pensions/stakeholder-and-personal-pensions/

    Or she might consider a SIPP with the likes of Hargreaves Lansdown or Charles Stanley?

    http://monevator.com/compare-uk-cheapest-online-brokers/

    http://monevator.com/no-time-to-invest/

    http://monevator.com/vanguard-lifestrategy/

    Some reading above.
    • JustAnotherSaver
    • By JustAnotherSaver 24th Sep 16, 12:00 AM
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    JustAnotherSaver
    I had a brief google myself & saw the mention of Hargreaves Lansdown.

    How does that compare to their S&S ISA? I'll explain what i'm talking about....

    A few years ago, my brother & sister knew they wanted to start saving for retirement but didn't have a clue where to begin. They're extremely green. They asked me to start it for them (& so i went with HL after many mentions on here). I did tell them that i'd rather not & explained the risks, especially with me not knowing what i'm doing. They were happy & wanted me to set it up for them.

    So i did. And i selected the funds they invested in.

    We were talking small amounts for them, but in time it grew to a fair size (for them), enough that i became very uncomfortable being in control of it.
    So i called up the IFA i mentioned earlier who came out to the house & went through it. I explained to him i wasn't comfortable managing this because i was basically clueless. My brother & sister were happy for him to take over.

    Why was i clueless? Because my fund selection was essentially close eyes & select.
    It just happened to be pure luck that my sisters grew 12% & brothers grew 8%. It could've dropped by double that & more.

    I would forever stay with these funds as i wouldn't know when to buy new ones, when to sell, when to buy more of existing. It'd be purely what i felt like at that moment. It needs to be managed by someone who is educated in the area.


    So bringing that back on topic - if my wife was to set up her own pension with HL, would she have to select the funds herself like with the S&S ISA, or is a pension with HL a bit different & she could select something like 'open to risk' & it'd invest it in funds itself which would be managed by some HL operative?

    • bigadaj
    • By bigadaj 24th Sep 16, 7:05 AM
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    bigadaj
    Depending on when ages years ago means then things could well have changed a bit.

    HL come in for a bit of flak on here because they are a bit more expensive, along the m&s or Stella type line, and had a reputation for promoting funds on the basis of their commission or incentives rather than quality or history of good performance.

    They are however good at customer service and are responsible so for small amounts they can be good.

    You would have to choose your investments but for most people there are plenty of multi asset type trackers that rebelance and can be a fire and forget option, thinking vanguard lifestrategy, l&g multi index, black rock consensu, fidelity and others. They offer different versions accotpring ti age and attitude to risk, and you simply contribute once set up.

    For what you suggest in your last post then xylophones suggestion of looking at cavendish sounds useful, they basically offer a portal with low fees to personal pensions from the traditional pension providers. So you set up a scheme through them, they take a small commission and you then contribute at low charges to personal pensions like aviva, aegon, etc . The latter option means there are a bit easier default funds you can choose, they're possibly a bit more expensive than the funds I've mentioned above, but overall theres little in it and it might be less daunting.
    • JustAnotherSaver
    • By JustAnotherSaver 24th Sep 16, 11:20 AM
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    JustAnotherSaver
    Thanks. I'll try & learn a bit about it. The problem comes when you start needing to change funds (basically manage the thing) because i simply don't know when to do that.

    The S&S ISA we currently have is managed totally. We pay in our money & the funds are changed as time goes by by people who are supposed to know what they're doing (or at least know more than i do).

    If i knew what to be doing then i could do it myself but simply i don't so i need someone managing it for me.


    How do you calculate the % to put in to these though?

    I like the workplace pension because it's all automatic. You decide a % & that % comes out automatic. When doing it yourself you have to calculate it.


    So let's take an entry from my wifes payslip...

    Gross for Month: 1,558.86
    Tax: 137.40
    Nat Ins: 106.56
    Net Pay: 1,314.90


    I've done this for myself & found that the 1% isn't from either the net or the gross, it must be from some other figure.


    So for one of these things i would guess you would have to calculate your decided percentage % for say September & then put it in to October's private pension manually (if that's allowed)?


    If we were doing that with our current S&S ISA then we would have to ring our IFA up each & every month saying - can you pay this amount more in for us this month, or - had a bad month this month can you pay in less.

    • bigadaj
    • By bigadaj 24th Sep 16, 1:19 PM
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    bigadaj
    I think you are over complicating matters.

    I'm surprised that you use an ifa for your isas, I would have thought it would be too expensive or not worth his while given what he probably need to charge on a time basis.

    If you take the cavendish example, you simply apply through them to get a personal pension from one of the big insurers, they offer a discount and you then contribute what you want, normally a standing order for say 100 a month, minimum is probably 50 and maximum is your total pay with some exceptions.

    That way you can simply look at the funds they offer and match one to your risk profile, there are usually things like cautious managed, adventurous etc etc. Trustnet and Morningstar websites hold data on the majority of funds so you can see the largest holdings, geographic breakdown, amount in shares/ bonds/ property etc

    Your comtribution is whatever you determine, choose 5% and earn 1000 a month so you put in 50 per month.

    A rough rule of thumb is that you contribute half your age as a percentage, based in whe you start, so starting at 30 you should put in 15% of gross salary, normally inclusive of employers contribution and tax relief. So that 15% might be 5% from your employer, and if a basic rate taxpayer 10% gross contribution would have 2% tax so actual cost would be 8% of net pay.

    Without detailing the pension contribution it's difficult to say how it's calculated, it would normally be on gross pay but can be exclusive of overtime, bonuses, shift allowances etc etc
    • JustAnotherSaver
    • By JustAnotherSaver 24th Sep 16, 5:30 PM
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    JustAnotherSaver
    I think you are over complicating matters.
    Originally posted by bigadaj
    I get told that a lot.

    But if i don't understand something to a level that satisfies me then i ask as many questions as i need to until i do understand it. Especially where money is concerned.

    • choccielover
    • By choccielover 24th Sep 16, 10:05 PM
    • 328 Posts
    • 1,193 Thanks
    choccielover
    Thanks. I'll try & learn a bit about it. The problem comes when you start needing to change funds (basically manage the thing) because i simply don't know when to do that.

    The S&S ISA we currently have is managed totally. We pay in our money & the funds are changed as time goes by by people who are supposed to know what they're doing (or at least know more than i do).

    If i knew what to be doing then i could do it myself but simply i don't so i need someone managing it for me.


    How do you calculate the % to put in to these though?

    I like the workplace pension because it's all automatic. You decide a % & that % comes out automatic. When doing it yourself you have to calculate it.


    So let's take an entry from my wifes payslip...

    Gross for Month: 1,558.86
    Tax: 137.40
    Nat Ins: 106.56
    Net Pay: 1,314.90


    I've done this for myself & found that the 1% isn't from either the net or the gross, it must be from some other figure.


    So for one of these things i would guess you would have to calculate your decided percentage % for say September & then put it in to October's private pension manually (if that's allowed)?


    If we were doing that with our current S&S ISA then we would have to ring our IFA up each & every month saying - can you pay this amount more in for us this month, or - had a bad month this month can you pay in less.
    Originally posted by JustAnotherSaver

    Qualifying earnings?

    http://www.pensionsadvisoryservice.org.uk/about-pensions/pensions-basics/automatic-enrolment/how-much-do-i-and-my-employer-have-to-pay?moreInfo=4
    OP in 2015 - 1,170
    OP in 2016 - Jan 599.45 Feb 1584.13 Mar 299.10
    Apr 880.37 May 1007.26 June 929.56 July 948
    2016 Target 10,000
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