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

Evilm

Gordon_the_Moron wrote: »

I've lost the letter from work telling me I'm going to be enrolled in this scheme, how do you opt out?

Before anyone tells me what a great idea paying in is, I can see that don't get me wrong but I want to opt out for the next 3 years as I'm currently saving for a house deposit and want every single spare penny to go in that fund!

Go speak to HR and payroll - I suspect there is a form to fill in.

Loopgames

Eellogofusciouhipoppokunu wrote: »

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.

Oh dear - that's a bit presumptious.

FWIW I do have financial vehicles in place. It's various investments through SIPP/various businesses. I prefer being in control of my business assets rather than someone else.

Unfortunately our education system lets a lot of people down in that we are mainly taught to be employees (if that even!) rather than employers/investors. So it's a shame this is how we find the majority of people hence schemes like this will only appeal to people with a lack of independent financial skills in this area and increase their risk to exposing themselves to markets that potentially is unstable and uncertain.

Loopgames

Eellogofusciouhipoppokunu wrote: »

Still no reasonable reply. To be expected I suppose, but it's a shame because I'd love a good debate about the pros and cons of different retirement vehicles ratehr than the usual trite declarations from some that "pensions are a rip off", "you'll lose your shirt and have nothing" and the always popular "I like to be in control of my money, I'd rather have just £1000 in a mattress than have £50k in a pension fund and have to pay all those fees!!!"

Patience is a virtue...I've been busy planning a new product to sell to the toy market...and preparing for my early retirement..:p jeez.

Eellogofusciouhipoppokunu

Loopgames wrote: »

Oh dear - that's a bit presumptious.

FWIW I do have financial vehicles in place. It's various investments through SIPP/various businesses. I prefer being in control of my business assets rather than someone else.

You do realise that the last letter of 'SIPP' stands for 'Pension' and as such is subject to all of the the external controls (retirement now moved to 55,etc.) you've just bemoaned?

Eellogofusciouhipoppokunu

Loopgames wrote: »

Patience is a virtue...I've been busy planning a new product to sell to the toy market...and preparing for my early retirement..:p jeez.

Is that the sort of retirement planning you're advising people to do rather than to get a pension (even though it transpires tht you have a SIPP) - We should all invent new toys? Jeez.

Loopgames

Eellogofusciouhipoppokunu wrote: »

You do realise that the last letter of 'SIPP' stands for 'Pension' and as such is subject to all of the the external controls (retirement now moved to 55,etc.) you've just bemoaned?

It wasn't a choice...if that makes it consistent for your lovely self..

What you call 'moaning' I call an observational statement.

Loopgames

Eellogofusciouhipoppokunu wrote: »

Is that the sort of retirement planning you're advising people to do rather than to get a pension (even though it transpires tht you have a SIPP) - We should all invent new toys? Jeez.

I don't advise others - especially when people are so lacking in skills in those areas...everyone will find their comfort zone and work with that. I just do not like the facade of these pension deals and advertised widely without people actually thinking about what is going on behind the scenes. I would rather keep my money invested in areas I want i.e. in my control..that is really the underlining issue for me as opposed to someone else's control.

The operative word is 'control'..and this is what you lose with these pension schemes.

Loopgames

Anyway, back to selling and investing...au revoir.

Pincher

Tom_Brine wrote: »

You just hear so many stories of them failing, get letters saying yours is in deficit (and question how that is possible) and all the horror stories.

You are thinking endowment mortgage and pension mortgages.

Life was good when return was 13%, but you get 8%, because the fund manager needed the 5% for Ferraris and diamonds for totties. When the returns fell, they still took the 5%, so the fund value went nowhere, possibly getting less, even though you were still paying £300 a month into it. The fund manager or the lender sends you a yellow alert, then a red alert, around the early 1990s. Your target was for the fund to grow to £100k to pay off your INTEREST ONLY mortgage. At 8% growth, after 25 years, £300 a month was fine, but at -1% growth after the fees, they suggest £700 a month to "keep you on track".

I would like to think these borrowers became suicide bombers and went into fund managers offices for a chat, but I'm sure they just got repossessed and died on the streets of pneumonia.

Tom_Brine wrote: »

Someone tells you something is in deficit that has been running for years. Would you like to invest long term, by the way if it fails (as some have) you will lose your money. But your employer is contributing to the ever increasing defict as well so its a good deal. Would you do it? Thats how it seems to the layman.

Equitable Life was the darling of Middle England, starting from a humble beginning over 200 years ago. It held a major chunk of the UK pension market.

Has it failed? Has it suffered almost zero growth for more than ten years? Did policy holders who try to leave have to suffer massive Market Value Adjustment? Does the government pay out only 25% of loss incurred, after twelve years?
Have people died before seeing any of the compensation?

Even at this stage, does the government say "Take your money and go."?

No, they say, "You have to leave your money in Equitable Life, where it hardly grows at all, until you are 67, which is nearly 20 years away."

"Or you can suffer a 15% MVA hair cut if you want to transfer to another company; and don't expect any more compensation either."

So, the money does indeed have 40 years to grow, at 1%: IF I'm lucky!

It's actually good that it happened when I was under forty. It made me see the illusion of wage slavery, and started doing something else. The £20k or so languishing with Equitable Life is now a Life lesson, and a joke when it does bear fruit. Not a joke with an ex-BA stewardess I knew, who was just about to retire when it happened, and she had contributed much longer than me.

art_for_arts_sake

For owners of smaller businesses the increasing burden of regulation has made previously attractive businesses unappealing. I predict the NEST scheme will be the tipping point with bosses of the smallest businesses approaching retirement themselves frantically lining their own pockets before closing their doors in 2015.