Pensions Reform - Everyone will go in

dave4545454

pinkshoes wrote: »

I don't know many people who don't have a pension...

i guess it depends on where you live.

i'm in the unemployment centre known as the west midlands where very few have even got a job let alone a pension

B.E.N

pinkshoes wrote: »

I don't know many people who don't have a pension...

Those I know who don't have a pension all own BTL properties which will have the mortgage paid upon retirement and act as a source of income.

I agree - a pension isn't necessary, PROVIDING that the plans are well thought-out. BTL property is the most recent 'bandwagon' - a lot of people have made a lot of money out of it, equally a lot of people have lost everything (http://www.dailymail.co.uk/tvshowbiz/article-1255688/Anthea-Turners-husband-Grant-Bovey-humiliated-declared-bankrupt.html).

Unfortunately, people see the rewards quickly and don't often think of the potential risks - e.g. BTL - perfectly fine if all goes to plan, but what happens if you get a 'professional tenant' and it takes 7-8 months to evict them with no rent coming in? What happens if you have a 'dry spell' without a tenant? What happens if interest rates shoot up?

BigPhil

I would love to join the company pension scheme but financially it just isn't possible at present and it would be financial suicide for the here and now if I were forced to join. I have contributed to pension schemes since I started work and have four frozen pension pots holding about £50,000 in the pot, but having taken a 30% drop in income for my current job after being made redundant, there is simply nowhere to cut back any longer in order to afford even the minimum contribution to a new scheme.

tsimehC

DWP has an auto-sign up policy. The opt-out procedure is very vague so I didn't do anything about it. Someone else that left before 2 years service got their contributions refunded so I'll probably get the same outcome once my contract's up. I'm not in favour of this "idea" at all.

Debt_Free_Chick

Auto-enrolling employees will be in to NEST - or the employer's own scheme, if there is one and it's "good enough" (criteria apply). Employers can choose whether to auto-enrol into their own scheme or in to NEST.

Existing requirements for private schemes will change to make auto-enrolment easier and consistent with the requirements for enrolment in to NEST.

Bear in mind that the Government is consulting over auto-enrolment & NEST, so things could change ...!

Mudd14

I am not an expert on pensions but have been involved in a lot of the consultation. The fact is the auto enrolment will happen, the consultations and review team are working out how to best implement. I also forgot to mention that the auto enrolment will only apply for those between 22 and state retirmenet age, I raised the point of age discrimination at the review! In answer to some of the above posts;

emilyteach1 - I agree the opt out should be easy for everyone, this was also one of the concerns that most employers voiced

Paulwf - In answer to some of your questions in brief; The scheme will work like any other pension scheme, there will always be a risk as your money is invested over stocks and shares so there is no guarentee on your return. The deductions will be linked with the current NI earnings threshold so you may pay contributons one week/month and not another, depending on your earnings. They will also be setting up a new pension scheme called NEST (The National Employment Savings Trust) that can be used for employers. I agree on your last question, most people who opt out will be the ones who cannot afford it.

PasturesNew - Please see my reply to Paul above. It will be linked to earnings so if you earn over the threshold you will pay! This gets around 0 contracted hours employees.

Savvy_Sue - Unfortunatly there will be fines for non compliance!

Googlewacker - This is correct, employers cannot influence the decision of the employee so details of the opt out will be given by the provider.

The governement is in the final stages of consultation. Submissions by the 13th August to the review team, a decision will come at the end of september based on the review teams suggestions.

Personally i would like to see a window for the first say 14 days of the employees employment. They can have that time to choose not to join and if they dont they are automatically enrolled.

Googlewhacker

Mudd14 wrote:

Googlewacker - This is correct, employers cannot influence the decision of the employee so details of the opt out will be given by the provider.

I do think it is crap that you are not supposed to say that you can opt out, it's not going to stop companies doing this though

Savvy_Sue

Mudd14 wrote: »

Savvy_Sue - Unfortunatly there will be fines for non compliance!

Great, so WE get fined, because employees behave like pains in the posterior who either can't / won't bring in the necessary utility bills / proofs of address to satisfy the pension provider! (I already see passports most of the time for proof of right to work in the UK, so I am confident my colleagues are all who they say they are!)

This is going to be a nightmare for those who are willing to employ people who are not securely housed.

Mudd14 wrote: »

Personally i would like to see a window for the first say 14 days of the employees employment. They can have that time to choose not to join and if they dont they are automatically enrolled.

AT LEAST the first 14 days! Preferably a month: the rate of attrition can be quite high in that time.

paulwf

Mudd14 wrote: »

Paulwf - In answer to some of your questions in brief; The scheme will work like any other pension scheme, there will always be a risk as your money is invested over stocks and shares so there is no guarentee on your return.

Thanks for the info. I'm not sure if you can answer this but I'll ask it anyway...

Who gets to decide the level of risk v return? With my personal pension I got to take a questionnaire and then that helped to decide the level of risk. I choice the mid-level option and I was advised that generally 10 years before retirement it is best to move it to the low level risk category.

Basically is this one absolutely huge government administered scheme or will it depend on who I choose to administer pensions for my company?

I'm concerned that employees will ask questions about it I'm not qualified to answer, plus if I choose a dud scheme as it is more or less compulsory the employee may be able to take action against me. At the moment I have a pension scheme bolted on to my business account and I can just tell employees they are better off finding their own scheme.

snowqueen555

This new reform gave current businesses an excuse to just shut down their current pension schemes which were a lot better than what they will roll out in 2012.

Now I was never going to expect to get a final salary scheme, but I don't think I'll ever recieve the 4%/10% rate now
So I have to wait another two years before my employer draws one up, its not ideal at all