Pensions Minister: Get ready for the 2012 revolution

lvm

Any chance someone can tell me if, when my employer starts doing the auto-enrolment, will employees such as myself be able to use an existing pension account or does the employer have to open a new one?

Thanks

chattychappy

nicknameless wrote: »

I know - why should an employer have any obligations whatsoever to its employees. Ridiculous eh. I think we should seriously consider conscripted labour (better not call it slavery as that won't help the cause in these modern PC times) to help UK PLC out of the mire it's in, rather than actually paying wages. Whatever next - we'll be asking them to pay taxes soon. Incredible.

Typical exaggerated response.

If these things are not properly balanced, we'll end up under the thumb of Chinese companies and doing things there way.

If the UK is not successful in world trade, then the UK will become impoverished.

Pensions are for people's benefits and should be paid for by people. People should take responsibility for themselves - and if that means forcing them, then so be it.

Andy_L

lvm wrote: »

Any chance someone can tell me if, when my employer starts doing the auto-enrolment, will employees such as myself be able to use an existing pension account or does the employer have to open a new one?

They are not obliged to use NEST but could pay into your, private, pension instead. iIt depends on how much effort they are prepared to put into something that benefits their staff.

Jules__2-2

Is it just me that suspects that mandatory work pensions for all allows the government to find a good excuse to reduce the state pension? It's already mandatory to pay into that one with NI etc!

jamesd

Here's the list of start dates for opt-out auto-enrollment. It's possible for an employer to contribute to employee pension plans but it's unlikely at a large company. They are more likely to use a scheme that they choose.

Many employers will allow periodic transfers out of their pension schemes. This transfer out capability wouldn't apply if an employer chose to use Nest, which bans transfers to more competitive options, though employers using Nest would be demonstrating that they don't care about their employees anyway.

Anyone who wants their pension pot to be 100% inheritable can easily do so. Just use income drawdown instead of buying an annuity. 100% with no tax charge at all can be paid into the pension pot of beneficiaries. If taken outside a pension pot there would be a 55% tax relief recovery charge. This also provides a 100% spousal pension without income reduction while both partners are alive, unlike annuities.

kidmugsy

"100% with no tax charge at all can be paid into the pension pot of beneficiaries." Really? Any beneficiary? Even when the pension has vested/been crystallised? I didn't know that. Are you quite sure?

jamesd

Yes, I'm entirely certain. The 55% tax charge only applies if it's paid outside a pension. Applies to any beneficiary that is allowed to have a pension (not charities, say) though clearly some are less likely to want it in a pension.

If the pension pot hasn't been crystallised there's no 55% charge even outside a payment to a pension pot. Someone taking benefits might want to use insurance to cover the tax charge for a beneficiary who they want to get 100% outside a pension pot.

Too few people know about this substantial benefit of drawdown for couples and inheritance tax planning IMO.

It's not expressed as I did it, instead talking in terms of spouse and dependents, but this is covered in the document Spotlight on Tax and Lump Sums paid on Death – Income Drawdown from The Pensions Advisory Service. "Continuing drawdonw" is how they express the inheritance into a pension without tax charge. Take care if you call them - you may need to refer the person you speak with to this document if they aren't very familiar with this subject.

lamb1102

no_choice_now wrote: »

This is nothing short of legalised theft! It's bad enough the government can take over 75% of some peoples incomes in certain circumstances.

It's a well known fact that you would be better off not having a pension but saving your own money privately, and ideally where the government can't touch it!

What is the point giving your money to somebody else so that when THEY decide you can retire, they will give you a little bit back every now and again until you die!?

If you put it in your own savings account you can retire when YOU want to, and you get the FULL amount BEFORE you die,, and anything you don't use can then go to your chosen ones.

You're mental in the head if you think saving in a pension is a good idea.

Oh dear, looks like Ive wasted my money for the last 30 years.
Never mind I'll be one of those "mental in the head " so I won't really know whats going on anyway.

nicknameless

chattychappy wrote: »

Typical exaggerated response.

If these things are not properly balanced, we'll end up under the thumb of Chinese companies and doing things there way.

If the UK is not successful in world trade, then the UK will become impoverished.

Pensions are for people's benefits and should be paid for by people. People should take responsibility for themselves - and if that means forcing them, then so be it.

yep those are the usual arguments that are rolled out.

chattychappy

nicknameless wrote: »

yep those are the usual arguments that are rolled out.

Yep, and probably for a good reason.