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MSE News: Government pensions scheme 'too complex'

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MSE News: Government pensions scheme 'too complex'

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This is the discussion thread for the following MSE News Story:

"The scheme where millions will be automatically placed in a pension needs to change to be a success, say MPs..."

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  • jamesdjamesd Forumite
    24K posts
    Part of the Furniture 10,000 Posts
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    It's impossible for NEST to be a single solution for employers because it doesn't allow transfers out.

    The means it's unsuitable for employees who want to properly manage their pension investments instead of just letting them drift and ignoring them. A scheme that can handle the varying risk tolerances and interest levels of all of their employees is needed and that's something that NEST cannot do, and actively prevents with the ban on transfers out.

    Fortunately there's a highly regarded provider who has a scheme that can both handle the employees who do not want to pay attention and which allows transfers out so that those who do want more choice can get that: NOW: Pensions.

    That makes NOW:Pensions currently the leading choice for employers who are trying to meet the needs of their whole workforce with a low cost solution.

    If MSE is looking for a scheme to suggest, so far that looks like the best one.
  • NeverlandNeverland Forumite
    271 posts
    Anything that makes charges easy to compare and enables small pension schemes to be wrapped up into a single low-cost one has to be a good thing

    How many posters on this board have six tiny little pension schemes running at the same time with no real idea of how much they are worth and what fees they are paying on them?

    The only people benefiting from the current opaque mess is the asset management industry
  • Anyone got any other advice - has anyone set up a NEST scheme yet??

    We are a small family run business (3 family members plus 1 full time employee) we want to set up a pension scheme (of which 3 employees will pay into - the oldest person is already at retirement age!). I have done a small amount of research and found the simplest looking option for us is to set up/join NEST but how do I know this will be a good/secure option for us? As we are a small business our deadline to enrol staff in a pension scheme is a few years away but we want to move forward with this now, we are in a reasonably secure financial position currently and are in a position to start contributing to our staff pension schemes now.

    Should we use a financial advisor, if so how do we chose one?

    Thanks for any help you can offer
  • anyone got any advice please!!!

    I have contacted now pensions and it seems a better option than NEST - what other options are available to small businesses - should we just pay a financial advisor - will this ensure we get good independent advice???

    thanks for your help!
  • Some considerations when thinking about advice.

    Advisers will sometimes wish to look for a long term relationship, and the UK pensions industry is predicated on complexity.

    There is ongoing advice around ensuring the funds a provider gives access to via their scheme are appropriate - governance

    There is ongoing advice about whether the providers position has changed over recent times - Prudential closed their doors to new Occupational schemes, Aegon changed their stance on new business, Axa amongst others sold off their Corporate pensions divisions.....so if some of the largest insurers in the world have withdrawn from this market, how will others survive with ever decreasing charges?

    In fact it is often challenging to get simple pragmatic advise without other drivers for ongoing advice playing some part.

    The key to suit most people who know little about pensions is - Keep It Simple - that goes for employers and employees alike!

    BTW - I have personal interests on this topic :A

    If you want to get an agnostic view you need to pay fees up front, to an organisation that specialises in procurement support in this specialist area. Unfortunately for most SME employers this is wholly unrealistic due to costs.
  • jamesdjamesd Forumite
    24K posts
    Part of the Furniture 10,000 Posts
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    An IFA is an option but probably wouldn't suggest either NEST of Now:Pensions. What are your objectives for the pension scheme? What are the interest levels of your employees in pensions and investments in general? NEST or Now:Pensions are very suitable for employees who just want to put money in and forget about it until requirement, with Now:Pensions having the better of the two in my opinion for that.

    If you have some staff who are more interested in choosing from a wide range of investments then a scheme with higher costs to the employees might be better but alternatively Now:Pensions will let those employees with more interest transfer out, while NEST won't. So Now:Pensions would be the better option of the two to handle that range of employees.
  • Thanks for the advice

    Realistically our main concern is that we are operating within the law and providing a benefit (albeit small) to our employees - we want to contribute more than the minimum amount would be but couldn't afford to offer a pension scheme comparable to that of a large company or public sector! To date no employees have shown any interest in joining a pension scheme (we have offered to set one up in the past) and I think we would all be happy to put the money in and forget about it, 3 of us are in a similar situation (myself included) mid 30's no pension to date.... so I don't think any of us are expecting miracles just a little extra to help out when we retire.
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