Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Prec
    • By Prec 5th Jan 18, 9:12 AM
    • 5Posts
    • 1Thanks
    Prec
    Asda pensions
    • #1
    • 5th Jan 18, 9:12 AM
    Asda pensions 5th Jan 18 at 9:12 AM
    Asda are proposing pension cuts. Colleagues currently paying 3% will see asda reducing their current matched stake to 2%. If colleagues increase their % to 5% then asda will kindly agree to give them the current 3%they already pay now.

    If this was the royal mail there would be strikes all over and their union fighting it. I've not ever seen anything in the press regarding these cuts. As retail rights seem to be overlooked by everyone I see asda pushing this through without a blink.

    As a mortgage owner with 19 years remaining, would I be better to increase my mortgage payments rather than increasing my pension. I'm 40.
    Any advice?
Page 1
    • HappyHarry
    • By HappyHarry 5th Jan 18, 9:28 AM
    • 515 Posts
    • 774 Thanks
    HappyHarry
    • #2
    • 5th Jan 18, 9:28 AM
    • #2
    • 5th Jan 18, 9:28 AM
    It sounds like Asda are falling back towards the auto-enrolment minimums.

    From April 2018, the minimum pension contributions will be 5% (minimum of 2% for an employer, and the remaining 3% from the employee).

    From April 2019, the minimum pension contributions will be 8% (minimum of 3% for an employer, and the remaining 5% from the employee).

    (There are a few other rules about what counts as earnings, minimum earnings to qualify and age of employee, all of which are detailed here: http://www.thepensionsregulator.gov.uk/minimum-contribution-increases-planned-by-law-phasing.aspx)

    So in 15 month's time, you'll be back to the 3% employer contribution anyway.
    I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.
    • Malthusian
    • By Malthusian 5th Jan 18, 9:29 AM
    • 3,586 Posts
    • 5,519 Thanks
    Malthusian
    • #3
    • 5th Jan 18, 9:29 AM
    • #3
    • 5th Jan 18, 9:29 AM
    This is the inevitable and widely-predicted consequence of auto-enrolment. Employers who used to pay pension contributions higher than those specified by auto-enrolment are cutting contributions to the minimum level specified by the government (which will be 5% employee / 3% employer from 2019).

    That's equality for you.

    The GMB trade union claims they have thousands of Asda members so we'd have to ask them why they aren't doing the job their members pay union subs for. Just over ten years ago there was a battle between Asda management and the brothers over union recognition which was widely covered in the press, so we can't blame the media.

    As a mortgage owner with 19 years remaining, would I be better to increase my mortgage payments rather than increasing my pension.
    You are still turning down free money if you don't contribute 5% (assuming that's the maximum employer match), even if you are getting less free money than before. The answer is almost certainly no.
    • westv
    • By westv 5th Jan 18, 9:33 AM
    • 4,423 Posts
    • 2,045 Thanks
    westv
    • #4
    • 5th Jan 18, 9:33 AM
    • #4
    • 5th Jan 18, 9:33 AM
    I know it's not really relevant to the thread but does anybody else find it grates when companies write "colleagues" instead of "staff"?
    Yes, I work with my "colleagues" but a company employs "staff"
    • Prec
    • By Prec 5th Jan 18, 9:35 AM
    • 5 Posts
    • 1 Thanks
    Prec
    • #5
    • 5th Jan 18, 9:35 AM
    • #5
    • 5th Jan 18, 9:35 AM
    It just feels like a kick in the teeth. Especially when shares rocketed the other day by 10% ish which gave the Walmart heirs a 12bn profit in 1 day. Welcome to the world of retail and minimum wage ha
    • PeacefulWaters
    • By PeacefulWaters 5th Jan 18, 10:22 AM
    • 7,560 Posts
    • 9,480 Thanks
    PeacefulWaters
    • #6
    • 5th Jan 18, 10:22 AM
    • #6
    • 5th Jan 18, 10:22 AM
    It just feels like a kick in the teeth. Especially when shares rocketed the other day by 10% ish which gave the Walmart heirs a 12bn profit in 1 day. Welcome to the world of retail and minimum wage ha
    Originally posted by Prec
    This is what it will be about.

    Having to increase base salaries ahead of inflation means other benefits get eroded.
    • Andy L
    • By Andy L 5th Jan 18, 11:59 AM
    • 8,724 Posts
    • 7,106 Thanks
    Andy L
    • #7
    • 5th Jan 18, 11:59 AM
    • #7
    • 5th Jan 18, 11:59 AM
    Asda are proposing pension cuts. Colleagues currently paying 3% will see asda reducing their current matched stake to 2%. If colleagues increase their % to 5% then asda will kindly agree to give them the current 3%they already pay now.

    If this was the royal mail there would be strikes all over and their union fighting it. I've not ever seen anything in the press regarding these cuts. As retail rights seem to be overlooked by everyone I see asda pushing this through without a blink.

    As a mortgage owner with 19 years remaining, would I be better to increase my mortgage payments rather than increasing my pension. I'm 40.
    Any advice?
    Originally posted by Prec
    by paying the extra 2% you instantly get 1/2 of that as free money from ASDA. Its unlikely that overpaying your mortgage will get that sort of return.
    Regardless, its likely that the 6% that was going into your pension wasn't enough for retirement so an increase to 8% is probally a good idea anyway
    • Malthusian
    • By Malthusian 5th Jan 18, 12:16 PM
    • 3,586 Posts
    • 5,519 Thanks
    Malthusian
    • #8
    • 5th Jan 18, 12:16 PM
    • #8
    • 5th Jan 18, 12:16 PM
    It just feels like a kick in the teeth. Especially when shares rocketed the other day by 10% ish which gave the Walmart heirs a 12bn profit in 1 day. Welcome to the world of retail and minimum wage ha
    Originally posted by Prec
    When the shares dropped by 35% in 2015 did you volunteer for a pay cut to help the Walmart heirs get over their $22 billion loss?

    Assuming you didn't, what changed since 2015 that meant their finances affect you?
    • Prec
    • By Prec 5th Jan 18, 1:13 PM
    • 5 Posts
    • 1 Thanks
    Prec
    • #9
    • 5th Jan 18, 1:13 PM
    • #9
    • 5th Jan 18, 1:13 PM
    I wasn't aware they dropped 35% did that mean the major shareholders still didn't make massive profits or did they just cut hours and make people redundant to cover their loss? With more redundancy due in the coming months too. It's just a little frustrating
    • bluenose1
    • By bluenose1 5th Jan 18, 3:23 PM
    • 1,937 Posts
    • 3,127 Thanks
    bluenose1
    I wasn't aware they dropped 35% did that mean the major shareholders still didn't make massive profits or did they just cut hours and make people redundant to cover their loss? With more redundancy due in the coming months too. It's just a little frustrating
    Originally posted by Prec
    I would be frustrated as well. Unfortunately organisations care more for their shareholders profits than giving their employees a fair wage and decent pension.
    Are you allowed to pay extra into your pension? If so you need to consider if it would be better to do this than pay more towards your mortgage. The tax you save makes paying more into a pension very appealing. If Asda offer salary sacrifice it is even more beneficial as you donít pay the National Insurance.
    Good luck.
    Money SPENDING Expert

    • badmemory
    • By badmemory 5th Jan 18, 3:23 PM
    • 1,232 Posts
    • 1,345 Thanks
    badmemory
    As the normally recognised level of pension contribution is a percentage equal to half the starters age, then auto enrollment is totally useless for providing adequate income in retirement. As the maximum is going to be 8% (total of employers & employees contribution) then you would need to be in full time pensionable employment by 16 not 21, an extremely unlikely scenario.
    • Prec
    • By Prec 5th Jan 18, 5:42 PM
    • 5 Posts
    • 1 Thanks
    Prec
    I would be frustrated as well. Unfortunately organisations care more for their shareholders profits than giving their employees a fair wage and decent pension.
    Are you allowed to pay extra into your pension? If so you need to consider if it would be better to do this than pay more towards your mortgage. The tax you save makes paying more into a pension very appealing. If Asda offer salary sacrifice it is even more beneficial as you donít pay the National Insurance.
    Good luck.
    Originally posted by bluenose1
    I have to pay extra to get the 3% i currently get. If I continue paying 3% then they drop their percentage to 2% no choice but to increase I guess.
    • Southend1
    • By Southend1 5th Jan 18, 7:53 PM
    • 3,216 Posts
    • 3,070 Thanks
    Southend1
    You are the union! Get your colleagues organised and fight this.
    • hyubh
    • By hyubh 5th Jan 18, 9:30 PM
    • 2,015 Posts
    • 1,524 Thanks
    hyubh
    This is the inevitable and widely-predicted consequence of auto-enrolment.
    Originally posted by Malthusian
    Really - can you point to sources? (By comparison: the received wisdom of certain quarters was that a national minimum wage would cause mass unemployment, or at least, a race to the bottom in wages. It didn't, but I accept many apparently grounded people thought it would.)

    Employers who used to pay pension contributions higher than those specified by auto-enrolment are cutting contributions to the minimum level specified by the government (which will be 5% employee / 3% employer from 2019).
    I'm interested in stats to support that assertion (not a rhetorical question...).
    • GunJack
    • By GunJack 6th Jan 18, 9:02 AM
    • 9,937 Posts
    • 7,398 Thanks
    GunJack
    Really - can you point to sources? (By comparison: the received wisdom of certain quarters was that a national minimum wage would cause mass unemployment, or at least, a race to the bottom in wages. It didn't, but I accept many apparently grounded people thought it would.)



    I'm interested in stats to support that assertion (not a rhetorical question...).
    Originally posted by hyubh
    I posted a link in the last couple of months from the ONS I think it was that showed the distribution of pay had, in the last few years, shifted to show a massive increase in the proportion of salaries clustered around minimum wage, so the race to the bottom effect was shown quite clearly.... I'll see if I can dig it out..
    ......Gettin' There, Wherever There is......
    • Muscle750
    • By Muscle750 6th Jan 18, 9:47 AM
    • 931 Posts
    • 282 Thanks
    Muscle750
    This scenerio is what we are worried about as only a handfull of us are in the company scheme 3 out of 24 employees the other 21 are now auto enrolled we have been in the FS scheme now no longer and in the DC scheme 12 years paying in 5% matched by the employer, yet as we understand as time goes on the auto enrolment figure is going to increase under legislation meaning more cost to the employer and as we can see it they are within their rights to cut their contribution to ours.
    • hugheskevi
    • By hugheskevi 6th Jan 18, 9:51 AM
    • 1,948 Posts
    • 2,404 Thanks
    hugheskevi
    I'm interested in stats to support that assertion (not a rhetorical question...).
    Not stats, but interesting to note the DWP Impact Assessment in 2012 stated on page 7:

    The Department considers that the labour market will adjust to offset 50 per cent of the costs arising from additional pension contributions for workers automatically enrolled, and that this will occur over a period of ten years. This is for the following reasons:
    • hyubh
    • By hyubh 6th Jan 18, 3:06 PM
    • 2,015 Posts
    • 1,524 Thanks
    hyubh
    Not stats, but interesting to note the DWP Impact Assessment in 2012 stated on page 7:
    Originally posted by hugheskevi
    Unless I'm missing something, this is in respect to companies having to provide pensions when they didn't before...?
    • mjfp509
    • By mjfp509 6th Jan 18, 3:09 PM
    • 143 Posts
    • 42 Thanks
    mjfp509
    Asda seem to be well behind their competitors with regards to pension provision, as at Tesco's / Sainsbury's, for instance, you can choose to pay up to about 7.5% into your pension which they will match, hence 15%. Puts Asdas offering to shame.
    • hyubh
    • By hyubh 6th Jan 18, 3:18 PM
    • 2,015 Posts
    • 1,524 Thanks
    hyubh
    I posted a link in the last couple of months from the ONS I think it was that showed the distribution of pay had, in the last few years, shifted to show a massive increase in the proportion of salaries clustered around minimum wage, so the race to the bottom effect was shown quite clearly
    Originally posted by GunJack
    The pay of the lowest paid increasing at a faster rate than the pay of the moderately lower paid is not a race-to-the-bottom effect.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

4,306Posts Today

9,819Users online

Martin's Twitter