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

LadBroke

Just to be clear: Although living longer also entails the possibility of working full-time at a later stage than most of us are doing now, the government will now force employees to give part of their wages to a pension-scheme I mean when it says in the DWP leaflet:


"...The government has set a minimum amount of money that has to be put into a Defined Contribution scheme by employers and workers, this starts low and increases gradually over a number of years (this is sometimes called phasing)."


This means that my monthly net pay will be reduced as soon as I have been enrolled ?

Eellogofusciouhipoppokunu

Loopgames wrote: »

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.

So you don't positively advise people, but you do give negative advice. That's takes us nicely back to my original point that certain people condeming pensions yet never give any clue as to a better alternative for retirement planning.

The wait for this information continues....

Gordon_the_Moron

dunstonh wrote: »

Is the pension contribution you make going to make any realistic difference to your ability to buy a house? No.

Lets say you do it anyway. When you have bought the house you will have another excuse as the early years of owning a house are expensive. So, you can stay opted out for longer. That will do you for another 5-7 years. Maybe you will want to move house again and you can put off the pension for another 5 years on top of that. Maybe marriage and saving for a wedding, so another few years. Then children and that will wipe out the next 25 years.

Then you are in your 50s with too little time to make much difference to your retirement provision realising you have thrown hundreds of thousands of pounds away over your working life. Luckily, you will have the property you ended up paying nearly 3 times for in interest and repayments to what it cost which you can then borrow against in retirement to raise a lump sum to live on. That interest rolling over each year and eroding the net value of your only asset. You can then spend 30 years of your life in near poverty.

You may think you are different but that is the model that so many people follow. It is hard to start paying into a pension. It gets harder the longer you leave it and the excuses for putting it off keep coming all through your life. The earlier you start. The easier it is.

Thanks for the lecture but I can't see me ever marrying or having kids, quite simply as no-one would want me, sad but true

I still live with parents and my birthday next year will be my 30th, I want to get a deposit as fast as I can, once I have it I will overpay my mortgage and contribute to a pension but at present ANY deductions from my wages are slowing my aim of building a substantial deposit.

I've only saved 61% of my wages over the last year (in a job earning about £20k), how crap is that???? :money:

Pincher

Gordon_the_Moron wrote: »

I want to get a deposit as fast as I can, once I have it I will overpay my mortgage and contribute to a pension but at present ANY deductions from my wages are slowing my aim of building a substantial deposit.

I've only saved 61% of my wages over the last year (in a job earning about £20k), how crap is that???? :money:

I have a house, therefore I Exist.

We really should have a Church of Land Registry. The faith in a computer record of ownership (No Title Deeds any more) is over taking Jesus.

Nice to know there are people who will buy my house in the future.

bowlhead99

LadBroke wrote: »

This means that my monthly net pay will be reduced as soon as I have been enrolled ?

Yes, your monthly net pay will be reduced, and the relevant amount of your monthly gross pay (a bigger number) will be put into an investment vehicle which over the long term should return a much better profit than the highest paying interest rate that you could get from a saving account or cash ISA, and it's all ringfenced just for you.

Then, your employer will also add some of its own money to that pot. Again this will belong entirely to you, and over the long term it should go up in value at a rate of return that you couldn't have got in a savings account. And this money wouldn't even be yours if you didn't join the scheme.

So (if you already understood this, apologies for being patronising) you are giving up small cash now to get big cash later, and you are also getting an extra chunk of big cash later from your employer, completely free.

If you choose to opt out, your employer will be very happy because it is money he is willing to give you, and you are turning it down.

Loopgames

Eellogofusciouhipoppokunu wrote: »

So you don't positively advise people, but you do give negative advice. That's takes us nicely back to my original point that certain people condeming pensions yet never give any clue as to a better alternative for retirement planning.

The wait for this information continues....

I feel really important strangely - you seem really interested in my advice to people. Wow, thank you so much for the interest, I really don't know what to say..I'm chuffed.:D

In any case more people should be concerned about such mass marketing for these forced new pensions. The fact that you would rather I stay silent or give alternatives is a bit flawed really after all we need more people to rebalance the imbalance of this scheme. I do wonder if those who are annoyed have a financial interest in this scheme i.e more business coming their way.

I still say keeping money in your pocket is better than put it into someone else...did you miss that original advice earlier ..pay attention love.

Eellogofusciouhipoppokunu

Loopgames wrote: »

I feel really important strangely - you seem really interested in my advice to people. Wow, thank you so much for the interest, I really don't know what to say..I'm chuffed.:D

In any case more people should be concerned about such mass marketing for these forced new pensions. The fact that you would rather I stay silent or give alternatives is a bit flawed really after all we need more people to rebalance the imbalance of this scheme. I do wonder if those who are annoyed have a financial interest in this scheme i.e more business coming their way.

I still say keeping money in your pocket is better than put it into someone else...did you miss that original advice earlier ..pay attention love.

I'm not particularly interested in your advice. I saw you made a disparaging remark about pensions and in reply I stated the fact that I have often seen people make these sort of remarks, but have never yet had any of them come up with a better strategy for building a retirement income. You came back with a reply, but it was very wide of the mark as a viable response.

Your idea of keeping money in your pocket instead of investing for growth tells me all I need to know. The wait continues for a pension 'naysayer' to come forward with a realistic alternative.

thriftymanc

How far in advance are your employers supposed to let you know about this? According to the timetables I'm supposed to get auto-enrolled in less than a month but I've not had a letter about it.

Debt_Free_Chick

thriftymanc wrote: »

How far in advance are your employers supposed to let you know about this? According to the timetables I'm supposed to get auto-enrolled in less than a month but I've not had a letter about it.

You need only be informed within one month of being auto-enrolled.

Your employer can defer your enrolment, but they must inform you of this "postponement" within one month of the day when you are first eligible for auto-enrolment

Out of interest ... how do you know you're supposed to be auto-enrolled?

thriftymanc

Debt_Free_Chick wrote: »

You need only be informed within one month of being auto-enrolled.

Your employer can defer your enrolment, but they must inform you of this "postponement" within one month of the day when you are first eligible for auto-enrolment

Out of interest ... how do you know you're supposed to be auto-enrolled?

Aren't they supposed to let you know before they enrol you so that you have the chance to opt out?

I looked at the timetable based on the size of the business.