Auto-enrolment...?

meeshpeesh

My company has just taken on this and is going to be implemented in July (2013). Their voluntary pension scheme is 7%, and 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 if I signed up now. 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!


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 don't think I would have to wait 3 years to be re-autoenrolled. In fact we can add a pension at any time under a 'Lifestyle Event' section.

xylophone

Will auto-enrolment be 7% as chosen by the company or is it less? If it's less I'll consider staying in.

What information has your company given the staff? This is you first port of call.

CLAPTON

do note also that you get tax relief on pension payments so if 90 is the gross payment you will only actually pay £72 (i.e. 90 x 80%)

mania112

Auto Enrolment rules specify that the total contributions from 2018 need to be 8%, 3 of which comes from the employer, 5 from you, but 1 of which is made up of tax relief - So 4% will come out of your pay.

Before then, there's a tiered structure. From now until October 2016 the maximum is only 1%, so they're not forcing you due to auto-enrolment rules.