Pensions - how much does your company pay in?

persa

ultrarunner wrote: »

I thought there was no limit for employee contributions?

Total employee and employer contributions cannot exceed 100% of the employee's relevant earnings, for tax relief to apply.

If the poster can only put 11% into the company pension, nothing to stop them putting the remaining 89% into a private pension. (Well, apart from not having any cash left to pay bills!)

westv

My last employer was 20% from them and 5% from me.

Lovelyjoolz

As an employer we don't make any contributions into employee pensions. The majority of small businesses I've worked with in my career haven't either. Instead, we pay our employees exceptionally good salaries and trust that they have their own personal arrangements in place. In 2016, with the new pension rules coming in, we will have to begin contributing unless our employees opt out. Which they are currently planning to do, because none of them want to put in 5% themselves.

I've never believed that personal pensions are worth the effort. SIPPs, bonds, ISAs etc are much more reliable. And you have more control over your investments. With a personal pension you are relying on some numpty of an investment banker to put your money in the right place. And how many people trust investment bankers now??

Lovelyjoolz

LadyMissA wrote: »

No idea? More worried about a job to be honest and since I have no property either or a partner I am pretty much doomed. Plus at my age there is no point starting one as my brother who is a fully qualified pensions person told me I'd have to put more than £400 a month into one with the company matching it for it to be worth anything.

If you have no property, no partner and no dependants, why do you need a large retirement income? If you don't need to cover the cost of repairs/maintenance to a property, you'll need less to live on anyway.

With state pension, you'll be on a low income, but also entitled to LHA to help with your rent, and various other top-up benefits that poor pensioners can claim. You'll also pay less income tax on your pension annuity. With no kids or partner to feed, you'll probably be better off than most!

LadyMissA

Lovelyjoolz wrote: »

In 2016, with the new pension rules coming in, we will have to begin contributing unless our employees opt out. Which they are currently planning to do, because none of them want to put in 5% themselves.

automatic enrolment process will start from 2012 - I see a lot of companies getting rid of people, not giving pay increases or pay less to cover this. Unless of course the employee opts out.

LadyMissA

Lovelyjoolz wrote: »

If you have no property, no partner and no dependants, why do you need a large retirement income? If you don't need to cover the cost of repairs/maintenance to a property, you'll need less to live on anyway.

With state pension, you'll be on a low income, but also entitled to LHA to help with your rent, and various other top-up benefits that poor pensioners can claim. You'll also pay less income tax on your pension annuity. With no kids or partner to feed, you'll probably be better off than most!

I didn't say large. If rent where I live is £700 a month for a one bedroomed flat now what will it be in 25 years? The state pension wont cover that, will it? What is LHA?

Income tax on pension? My mum doesn't pay tax on hers now so not sure I'd get taxed on a state pension.

Anyone knows it's cheaper to live as a couple and the partner would have their own pension and maybe a private one too

I am not sure OAP's have kids to feed.

Oldernotwiser

LadyMissA wrote: »

I didn't say large. If rent where I live is £700 a month for a one bedroomed flat now what will it be in 25 years? The state pension wont cover that, will it? What is LHA?

Income tax on pension? My mum doesn't pay tax on hers now so not sure I'd get taxed on a state pension.

I am not sure OAP's have kids to feed.

LHA = Local Housing Allowance ie HB in the private sector.

LadyMissA

Oldernotwiser wrote: »

LHA = Local Housing Allowance ie HB in the private sector.

HB? Housing Benefit? OAP's can get that? News to me but then I am not an OAP yet haha

Bobl

Company pays 11.5%, I opt to pay 7.5% in a final salary pension.

Options go from 3.5% up to 7.5% and a couple of years ago we were given the choice to up our payments to receive the same pension or keep current personal contribution for a lesser pension. I opted to pay the maximum.

Lovelyjoolz

LadyMissA wrote: »

Income tax on pension? My mum doesn't pay tax on hers now so not sure I'd get taxed on a state pension.

Of course you pay income tax on a pension. Its an income, so it's taxed. Anything earned over your personal allowance incurs tax. Your mum doesn't pay tax probably because her pension does not exceed her personal allowance. But any personal pension plan that you take out which pays you annuities higher than your personal tax allowance will incur income tax.

LadyMissA wrote: »

Anyone knows it's cheaper to live as a couple and the partner would have their own pension and maybe a private one too

Make sure any future partner is entirely clear that you're only after him for his pension

LadyMissA wrote: »

I am not sure OAP's have kids to feed.

Thats a very narrow view point. Anyone aged over 60 is technically an OAP and I know a quite a few 60 year olds who didn't have children until they were in their 40's and therefore still have children living at home or at Uni. It's not a rare occurance.