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MSE News: Automatic pension enrolment - what it means for you

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MSE News: Automatic pension enrolment - what it means for you

edited 30 November -1 at 12:00AM in Auto-enrolment
126 replies 28.4K views
Former_MSE_HelenFormer_MSE_Helen
2.4K posts
edited 30 November -1 at 12:00AM in Auto-enrolment
"From Monday, up to 11 million workers will be automatically enrolled into workplace pensions ..."
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Replies

  • I welcome this scheme, we should all make provison for our retirement although I think the baby boomers should contribute more now as they are drawing final salary pensions that they never properly financed.
  • PincherPincher
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    We should really do a long term documentary, tracking the bright eyed and bushy tailed pension savers, like the Seven Up! documentary, tracing the lives of children every seven years.

    Volunteers just has to promise to keep all pension statements.
    Obviously there will be multiple pension plans, but hopefully it won't be too complicated.

    I think we keep going until they pass away, so we can see how the pension provision was adequate or not.

    We should have a control group, who don't save initially.
  • I detest this scheme. It is forcing people to save the governments way. If the pension age is increasing anyway then you retirement pot may not even be accessed. These schemes serve only to keep the financial sector propped up, nothing more.
  • grandma247grandma247 Forumite
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    If you are close to retirement age is it worth being in this scheme? My dh has less than five years left before he retires.
  • Loopgames wrote: »
    I detest this scheme. It is forcing people to save the governments way. If the pension age is increasing anyway then you retirement pot may not even be accessed. These schemes serve only to keep the financial sector propped up, nothing more.

    Not at all, you are free to start a personal pension and opt out of the NEST scheme.

    The state pension age is very different to the pension age of 55 where you can access your tax free lump sum.

    Yes pensions do have risks associated with them, I for one see the inaccessibility as a positive to prevent me dipping into it for holidays, cars etc.

    I for one welcome this move, the thought of a whole generation on state benefit pensions is not a pretty sight at all.

    For a small sacrifice now, it may give you that extra bit of breathing space in retirement. You may look back at this and feel a degree of relief that you listened to that financial adviser.

    Just my thoughts by the way
  • Loopgames wrote: »
    I detest this scheme. It is forcing people to save the governments way. If the pension age is increasing anyway then you retirement pot may not even be accessed. These schemes serve only to keep the financial sector propped up, nothing more.

    It forces someone to make an active decision rather than passively ignoring the options. You don't have to stay in it.
  • gerturdeannagerturdeanna Forumite
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    So I have to put in a min of 0.8% of my annual salary? What if I can't afford that?
    Made it - 15 years married!! Finally!! xx:beer:
  • dunstonhdunstonh Forumite
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    So I have to put in a min of 0.8% of my annual salary? What if I can't afford that?

    You cant afford that?

    If you cant then it effectively means you are borrowing from your retirement to pay for your lifestyle now. So, you probably need debt counselling and a serious looking at your spending habits.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Kite2010Kite2010 Forumite
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    Put in 0.8%, get 1.2% free from employer & from tax-man, lose ~ 1% in annual "management" fees (from my employers' page on costs for pensions).

    Sorry mr government man, I will keep the 0.8% and invest it into a nice ISA and play the savings account switching game every year or so to maintain a good interest rate. At least if something happens I've got the money to redraw, and I'm not tied down into having money locked away into a pension pot from various employers if I decide to change employers.

    At least I've got to April next year to decide as that's when it's happening for the company I'm currently at
  • edited 30 September 2012 at 11:42AM
    dunstonhdunstonh Forumite
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    edited 30 September 2012 at 11:42AM
    Put in 0.8%, get 1.2% free from employer & from tax-man, lose ~ 1% in annual "management" fees (from my employers' page on costs for pensions).

    So, you put in £80. Govt adds £20 and employer adds £120. Your total is £220.
    AMC is 1% which is £2.20.
    Sorry mr government man, I will keep the 0.8% and invest it into a nice ISA and play the savings account switching game every year or so to maintain a good interest rate.

    What an awful idea. You want to take your £80 in the belief that your savings on £80 will beat the pension which is instantly turned into £220. Do you realise it would take you 21 years @ 5% p.a. for your savings account to match the pension assuming the pension never made a penny.

    And thats before we go on about how bad using cash would likely be over that period compared to a balanced spread of investments (although you could use cash in the pension if you really wanted to meaning your savings account would never catch up whatever you did)
    At least if something happens I've got the money to redraw, and I'm not tied down into having money locked away into a pension pot from various employers if I decide to change employers.

    Merge the pensions then if that is the case. Only a fool would not join your pension scheme.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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