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

dunstonh

xxlozxx wrote: »

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!

That cant happen now as there is a pension protection fund. Plus, it is a totally different type of pension where that cannot actually happen.

Throwing away free money is silly and short sighted.

meeshpeesh

My company has just taken on this and is going to be implemented in July. Their voluntary pension scheme is 7%, there are no options to put in lower. I've no savings yet as still paying off debt so I'm planning on opting out until I can afford to contribute to it. I'd be losing circa £90 a month. Will auto-enrolment be 7% as chosen by the company or is it less? If it's less I'll consider staying in.

I know a pension is important so please don't lecture me but I'm only 22 and want to find my financial feet in the present before I think about the future, otherwise I may not make it to retirement age in the first place!


EDIT: It may be worth noting that my company's pension scheme is under a flexi-benefits system that we can change every year, so I wouldn't have to wait 3 years to be re-autoenrolled. In fact we can add a pension at any time under a 'Lifestyle Event' section.

energy80s

Just got the letter from my employer about this new Govt. ripoff scheme. Don't know if its worth getting involved with as they always change the rules to suit themselves and any money you do end up getting will only be deducted from benefits somewhere else. Also the whole transfer thing looks dodgy. What happens under TUPE? Is it my scheme, my employers scheme or the governments scheme? It can't be all three. It seems that the only pension you can trust is the one you are currently drawing down on - current pensioners are OK but I wouldn't like to bet my savings on any future government schemes.

dunstonh

Just got the letter from my employer about this new Govt. ripoff scheme.

There is no Govt rip of scheme.

Don't know if its worth getting involved

If you dont know, then how can you call it rip off?

as they always change the rules to suit themselves and any money you do end up getting will only be deducted from benefits somewhere else.

Examples please?

What happens under TUPE?

Nothing.

Is it my scheme, my employers scheme or the governments scheme?

Nothing to do with the Govt. Its private sector.

It seems that the only pension you can trust is the one you are currently drawing down on

Why?

I wouldn't like to bet my savings on any future government schemes.

The only Govt schemes are public sector and state pension. Neither of which has anything to do with auto enrollment.

stinktankcynic

My doubts are that the amounts being paid in are really low. Rather than the current auto in system, it may have been better to give the employee the right to join a scheme where the employee pays in 5% on total earnings and the employee as much as they want. The limits mean a lot won't join because it's not worth it.

Also, it's OK for the government to auto enrol u , but if you wanted to invest yourself, then you have to prove who you are, etc. Talk about one rule for one.

stinktankcynic

It's not right for everyone, education, a better scheme and higher contributions and choice, flexibility would be better than joining everyone at an artificial low amount.

dhs87

stinktankcynic wrote: »

It's not right for everyone, education, a better scheme and higher contributions and choice, flexibility would be better than joining everyone at an artificial low amount.

The low rates are to get the ball rolling, surely, so it's not a massive financial burden to companies or to individuals, I suspect.

By October 2018, the minimum payment contributions will be 5% from the employee (minus tax relief) and 3% from the employer.

Bare in mind, those will be the minimum. Many will offer higher.

At the end of the day though, it's free money.

stinktankcynic

dhs87 wrote: »

The low rates are to get the ball rolling, surely, so it's not a massive financial burden to companies or to individuals, I suspect.

By October 2018, the minimum payment contributions will be 5% from the employee (minus tax relief) and 3% from the employer.

Bare in mind, those will be the minimum. Many will offer higher.

At the end of the day though, it's free money.

The % quoted is only on part of your wages not the full amount.

shireknight

This is getting ridiculous now I already have three pensions that I no longer pay into plus I'll get the state pension which will be four and now if I get automatically enrolled into this one that will be five, I don't suppose as this is a government sponsored pension that the state pension will be merged into it to make one pension will it?


My pensions are:-

Private pension that I started myself and quit when I moved into a workplace pension.
Private pension that was started on advice of a bank when that opting out of SERPS fad started and stopped when I opted back into SERPS again when the fad finished.
Workplace pension I started when I joined Barclaycard and stopped paying into when I left again.

dunstonh

I don't suppose as this is a government sponsored pension that the state pension will be merged into it to make one pension will it?

It is not Government sponsored. And not it won't. That would not be logical.

Private pension that I started myself and quit when I moved into a workplace pension.
Private pension that was started on advice of a bank when that opting out of SERPS fad started and stopped when I opted back into SERPS again when the fad finished.
Workplace pension I started when I joined Barclaycard and stopped paying into when I left again.

Why don't you investigate consolidating them?