Nest and auto-enrolment

jamesd

From my look at NOW:Pensions I don't think that NEST is the best option for the employer either, unless the employer is deliberately trying to discourage enrollment. NOW:Pensions seems to understand that they have to make a pitch to employers that is good and to be working hard on doing that as well as offering a better combination of features for employees.

What do you think of the various differences between them for the employer and employee?

elantan

can anyone give me an idiots guide to the nest scheme? my employer has started this scheme up and i have opted in with paying 12.5% or my wages ( i dont really have any pension provision tbh) my emplyer is paying in 1%

i understand some things about pensions but not alot. i was just glad that my company finally pays something into a pension for it's employees, i also thought that seeing as how they are only paying 1% i would need to pay a good bit more (12.5%) although even though i am paying 12.5% into this scheme i am only paying £75 a month into it ( only work part time)

is the nest scheme not a good idea? if not why not? should i come out of it? what should i put in it's place? my company wont pay money into anything else ( i have asked)

jamesd

Roughly how long until you retire? Or roughly how old are you? Nearest ten years is fine.

Are you interested in learning about investments and investing or do you think that you might be later?

If you are not interested in learning about investing or are close to retirement then paying in just sufficient to get the employer money would probably be best, with any extra money invested in a stocks and shares ISA instead.

If you are an experienced investor or want to learn and are quite a long time from retirement it may be better to opt out of the workplace pension and just invest yourself because you'll have a better range of investment options available to you if you do that, possibly with lower charges. The value you can gain from that can be greater than the value of the employer and NI saving from the pension.

At the moment NEST looks like the worst of the auto-enrollment pension schemes available to me and NOW:Pensions looks like the best.

Amanita_2

jamesd wrote: »

At the moment NEST looks like the worst of the auto-enrollment pension schemes available to me and NOW:Pensions looks like the best.

Have you looked up NOW:Pensions on the FSA website? They are a passported firm with EEA rather than FSA authorisation.

http://www.fsa.gov.uk/register/firmBasicDetails.do?sid=289698

elantan

I'm 39 years old ... Plan on retiring at the same time as my oh ( he's 5 years older than me)

I do really want to learn all about investing and have read some books ... Some of it i understand some of it i dont ... I would honestly like to learn more and be in control rather than allow my company to decide things for me

I get the basics of pensions, i understand with investing my best choice would be index linked investments ( low cost) but i fully understand i have so much more to learn

jamesd

elantan wrote: »

i understand with investing my best choice would be index linked investments ( low cost) but i fully understand i have so much more to learn

The best option when investing is not always the lowest cost option, it's the one that produces the highest gain. That's almost never the lowest cost option. The idea of auto-enrollment is to try to get some decent pension investments available at low cost and get lots of people using them. NEST can't get really low cost investments available because its investment costs are too high. The investments in NOW:Pensions might be good enough to buy if they duplicate the performance achieved in their original market and there's enough potential for low costs there.

If you are buying index-linked investments low cost is likely to be best but you also have to ensure that the tracking error is reasonable, else a drop in performance compared to the index that is being tracked can lose you more than the difference in cost.

The investments available via NEST and NOW:Pensions differ. The NOW:Pensions main investments are not trackers but rather managed funds at low cost. That gives them a chance of outperforming instead of tracking an index and they do have a good record in their home country.

If you are interested in learning more about investing it's clear that the NEST scheme isn't for you, though. That's because its options are too restricted for someone who wants to use a good range of investments.

JoeCrystal

jamesd wrote: »

If you are interested in learning more about investing it's clear that the NEST scheme isn't for you, though. That's because its options are too restricted for someone who wants to use a good range of investments.

Bit like some stakeholder pension scheme really, with it limited fund choices.

Cheers

Joe

elantan

We are only being offered the nest scheme, no chance of the now scheme in my work ... My work are only offering to pay 1% into the scheme which was why i was thinking to pay 12.5% so that atleast i would get something when i retire

I do want to get on top of it though so i will phone work on monday and cut it right down ... Will then try and find a suitable pension ....

Any idea what would be an acceptable amount to pay into the nest scheme ? Something that means that the 1% paid by the company atleast does some good

elantan

Sorry shouldve also said thanks very much for the info so far .... I'lm attempting to write this on my phone so tend to try and keep to the main point as i loose my connection often

jamesd

JoeCrystal wrote: »

Bit like some stakeholder pension scheme really, with it limited fund choices.

Close but it has a big catch as well: you can't transfer your money out if you decide you want something better. You can with a stakeholder pension.

elantan wrote: »

Any idea what would be an acceptable amount to pay into the nest scheme ? Something that means that the 1% paid by the company atleast does some good

No more than it takes to get the 1% from work. Put the rest of your money into a stocks and shares ISA and start to learn about fund investing, or take a look at the Jupiter Merlin fund range.