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

Debt_Free_Chick

tunnel wrote: »

Thanks Dunstonh,

Its now a toss up whether to draw it out as divi's or to actually look at a pension,something i've never considered as i've several BTL investments and have never felt the need.

Tunnel

If you have only one employee - even if you are the only employee - you will have to set up a workplace pension scheme and comply with the auto-enrolment regulations.

MouseTrap

scooby75 wrote: »

What it means for you:

You will pay into a fund run by the private sector and most of your payments will be eaten up by their administration charges.

And the government endorses this.

Most implies over 50% of your payments would be eat up - typical admin charges are about 1%.

Hoonior

Hello all,
First post here and from a quick skim through I don't think this question has been asked before (apologies if it has!)

I currently pay in around 5% of my salary into a private pension I've had since I started work. My employers pay in about 8% and, all told, there's a reasonable sum in the pot which is managed by an IFA who I know and trust. My company launched the compulsory scheme back in September and we've been forced to enrol, with those payments going into the new pot which has higher fees and no investment advice included in the fee.

My question is this... I have twice asked my HR department if I can revert to my usual scheme on the grounds it makes (a) me worse off as I'm paying a larger fee (b) what's the point of starting another pot and (c) potentially is makes me worse off because there's no management involved- the recommendation at basic level is 75% in a steady as you go fund and 25% in something slightly more exciting. Can my employer refuse to pay their contribution into my existing fund? One of my colleagues has persuaded them to let her continue with her exisiting fund as she is paying significantly lower fees each year, surely this creates a precedent for me being able to exercise choice over where I can put my pension contributions?

dunstonh

Can my employer refuse to pay their contribution into my existing fund?

Yes. It is up to the employer.

One of my colleagues has persuaded them to let her continue with her exisiting fund as she is paying significantly lower fees each year, surely this creates a precedent for me being able to exercise choice over where I can put my pension contributions?

You could argue discrimination if they dont allow it for you.

jamesd

You could ask about transferring money from the work pot to the other one periodically, say once every couple of years. That will significantly reduce the extra charges overall. You probably also have more fund choices and could change to some more complementary to what you have in the existing pot elsewhere.

Hoonior

Thank you both for your thoughts, another example of politicians coming up with ideas and ignoring the practicalities! Hopefully HR will manage to come up with something positive for a change.

xxlozxx

We are not putting our hard earned money into company pensions again! My husband had been paying into a private pension for years and was then told to transfer it into his company pension scheme as he would get a better return etc. He transferred 42,000 and then 12 months later the company went bump! The company pension fund was "underfunded" and after 10 years in wind up he has been offered 15,000 back in cash! Thanks but no thanks wont be doing it again!

The_pc_tech

Well the letter landed in my work e-mail box on Thursday just before I finished for the day.

Rang our payroll department on Friday and was told 120 quid was going to be taken out.

If I can get the form to our pensions department by Tuesday they can apparently stop the deduction, I sincerely hope so otherwise it's going to cause me some major trouble this month.

Thank you very much George Osborne

The_pc_tech

Managed to opt out of this in time

Phew!

JoeCrystal

The_pc_tech wrote: »

Managed to opt out of this in time

Phew!

Just out of curiosity, what is your retirement provision?

Cheers,
Joe