my partners salary is £11000 is it worth her being in company pension

snowyy

my partner works for a very large cleaning company and has been enrolled in the new pension scheme,even though she is not aware of this(english is her second language)and no doubt many others who work with her are probably unaware.
I have just seen her pay slip and she is contributing £1.60p a month and so is the company.Is it worth it personally i don't think so.
I am quite sure that she has no idea how to claim her pension when she retires.
I think there will be small amounts of money left in the pension companies because lots of the low paid are not english and wont know how to access them.

jamesd

Yes. Not a lot of other ways where you can more than double your money on the first day of investing it. She'll need income of some sort when she retires and this is a useful part of it. Because each person has their own income tax personal allowance it's generally a good idea for each to have some pension provision.

atush

so, what do you two plan to live on when you both retire?while 1.60 a week, With tax relief that is only 200 or so a year.

So yes, it is a pittance and is not enough. But will be better than nothing (as there will no longer be pension credit to top up those who refuse to save.

what you gonna do about it? Are you going to pay in more? Or are you going to live poor?

rs65

atush wrote: »

so, what do you two plan to live on when you both retire?while 1.60 a week, With tax relief that is only 200 or so a year.

The OP said £1.60 a month.

Think I would be having a close look at the charges on the scheme. Would it be a percentage?

JohnB47

I work part time in the NHS, with a salary around £7000 gross. I pay into the pension scheme and expect to get 'only' around £60 net a month if I retire at age 65 (i.e. after 8 years of employment).

Was I wise to give up around £20 a month for that? Of course I was. I'll break even after only a few years and from then on it's free money for the rest of my natural.

I would join any pension scheme that had contributions from the employer, however small the eventual payout. If your partner leaves the employer early (typically before 2 years), they get their contributions back anyway, so there's no big loss.

real1314

1.60 per month?
So with the employer it's £3.20.
And that will most likely be the gross amount.

The actual effect on her wages is a loss of about £1.12 a month to get £3.20, so in terms of the value gained against what it costs it's great

but.....

even assuming its really £1.60 a week, which makes it £166 a year with the employers part; and then assuming an investment rate that beats inflation by 2.5%; you'd be looking at a fund of about £14,300 after 50 years, giving £60 a month assuming an annuity rate of 5%.

You'd pay in £8320, you'd get that money back after 12 years.

snowyy

Thanks everyone who commented I guess something is better than nothing so i will tell her to keep it going.

citykid5

wouldn't this also include some form of life insurance?
be worth it just for that

InsertWittyName

Another point is that if the sum of all pension pots is small enough, all of it can be taken as a lump sum: http://www.hmrc.gov.uk/pensionschemes/small-pen.htm#4