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

rogerblack

Kite2010 wrote: »

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.

Neglecting the other points raised.
If you or a partner ever find yourself needing to claim means treated benefits, including JSA, ESA, council tax benefit, ...

That ISA will entirely disqualify you from them. You will then have to account for how you spent this before being able to clam, and any excessive expenditure risks you will be treated as still having some of this,
Universal credit - coming in a year or two - will increase means testing.

Bosniavet96

I currently work for a company who will enroll you in a "stakeholder" scheme "if you want", but will not pay anything into it. At a recent meeting, I asked about the new NEST scheme, & was told they were going to wait until the last possible moment to start it, & that they could not guarantee that you will be able to transfer the stakeholder funds without charge. So, I cannot get excited about this yet, & as I am on a tight budget (with a DMP), I am a bit concerned about affordability.
Anyone know if any preserved pensions can be transferred into NEST - I have one that will pay about a fiver a year on retirement....

dunstonh

I asked about the new NEST scheme, & was told they were going to wait until the last possible moment to start it, & that they could not guarantee that you will be able to transfer the stakeholder funds without charge.

NEST does not accept transfers in. If they dont use NEST but use their own scheme then it will depends on the agreement they have in place with their adviser/administrator. If the firm are not willing to subsidise it in some way then it is likely a charge could apply.

Debt_Free_Chick

Bosniavet96 wrote: »

& that they could not guarantee that you will be able to transfer the stakeholder funds without charge.

There is no charge for transferring out of a stakeholder pension - is that what you currently have a "Stakeholder Pension Plan"?

Usually, there is no charge made by the receiving scheme either (but as dunstonh says, NEST won't accept transfers in).

The main thing you need to consider is the charges within the different pension plans. If the ongoing annual charge in any new scheme is more than your current stakeholder plan, then a transfer is unlikely to be a good idea, as you would simply lose more of the pension pot to annual charges.

jamesd

Bosniavet96 wrote: »

I currently work for a company who will enroll you in a "stakeholder" scheme "if you want", but will not pay anything into it.

That's a good deal compared to NEST.

Bosniavet96 wrote: »

At a recent meeting, I asked about the new NEST scheme

If you want to do yourself and the other employees some good, tell your employer that you don't want them to use the NEST scheme. It's the lemon of the bunch of three low cost schemes for auto-enrollment.

Your employer could just start making contributions to the existing stakeholder scheme.

Bosniavet96 wrote: »

they could not guarantee that you will be able to transfer the stakeholder funds without charge.

If they use NEST it's certain that you can't because NEST bans transfers to other schemes and transfer in. It effectively sets up an island pension that's kept apart from all the others you could merge to keep things simple. Since your money is locked in, they get to change service levels and investments and charges without you being able to do anything about it.

Pincher

An article in Sunday Times Money yesterday high-lighted the problem of old pension policies going moldy because of poor growth and high charges. To add insult to injury, they penalise you if you try to transfer out. The units and bonuses suddenly evaporate because they stole the money years ago, so your statements are just works of fiction. Transferring out crystalises the actual state of your account and calls their bluff.

I have money trapped in pensions that are worth less than when I (and the employer, and the HMRC) put the money in, due to inflation, zero growth and charges. They will be worth even less when I retire. The urgent action that I require is to let me GET THE MONEY OUT. It will be sweet if we could force the pension provider into paying put what the annual statement claim the policy is worth, to teach them about lying and ruining people's lives through false hope.

jamesd

That story was focusing a lot on the relatively few initial units that carry all of the commission. Most people who pay in regularly for years won't have those units making up most of their pot.

I agree about the importance of being able to get the money out. It's a vital piece of market forces based protection for pension holders.

RichandJ

http://www.bbc.co.uk/news/business-19760421

Dear God, we're doomed.

Loopgames

Credit-Crunched wrote: »

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

Not so long ago early retirement age was 50 now its 55...this is my point...by the time I decide to retire will it be 60 or more before I take my 'tax - free ' lump sum.

I prefer control of my money - of course financial advisors will promote this as it keeps a job over their heads:D...but as we were taught in actuarial training 'money in your hands today is better than next year'....well sort of - there were a few monetary rate jargon/terms thrown in:D.

Eellogofusciouhipoppokunu

Loopgames wrote: »

Not so long ago early retirement age was 50 now its 55...this is my point...by the time I decide to retire will it be 60 or more before I take my 'tax - free ' lump sum.

I prefer control of my money - of course financial advisors will promote this as it keeps a job over their heads:D...but as we were taught in actuarial training 'money in your hands today is better than next year'....well sort of - there were a few monetary rate jargon/terms thrown in:D.

Whenever I see a post like yours I always ask the following question: "So what are you doing to provide for your retirement income?".

I rarely if ever get a reasonable reply but I live in hope.