Can't afford to join my works pension scheme

Aria1986

I opted out of my work pension scheme when I
First joined,now I'm being told if I don't join their workplace pension I will have to go with a private pension or be fined by the government is this correct? I can't afford to pay in to my work place pension scheme it's £80 a month and it's money I just can't afford to lose. I could if by law and forced to I would join a private pension but maybe could only afford £30-£40 a month,is there anything that will even offer to allow me to pay this little?
Sorry if this has already been asked but I'm very unsure about all of this and just looking for a little advice,thank you

xylophone

http://www.adviceguide.org.uk/wales/debt_w/debt_pensions_e/debt_types_of_pension_e/workplace_pensions.htm re auto enrolment/opting out.

Stakeholder pension is a basic option but you won't get an employer contribution.

https://www.gov.uk/new-state-pension/overview

CLAPTON

Aria1986 wrote: »

I opted out of my work pension scheme when I
First joined,now I'm being told if I don't join their workplace pension I will have to go with a private pension or be fined by the government is this correct? I can't afford to pay in to my work place pension scheme it's £80 a month and it's money I just can't afford to lose. I could if by law and forced to I would join a private pension but maybe could only afford £30-£40 a month,is there anything that will even offer to allow me to pay this little?
Sorry if this has already been asked but I'm very unsure about all of this and just looking for a little advice,thank you

It isn't compulsory for you to join a pension scheme of any kind
who's telling you otherwise?

it may well be unwise not to pay, especially if your employer pays in (free money) and of course you get tax relief on your own contribution

dunstonh

I'm being told if I don't join their workplace pension I will have to go with a private pension or be fined by the government is this correct?

No it is not correct. The employer gets fined if it does not offer auto enrolment. They have to opt you in automatically but you have to choose to opt out if you dont want to join it.

I can't afford to pay in to my work place pension scheme it's £80 a month and it's money I just can't afford to lose.

£80 will actually cost you £64 due to tax relief.

SeduLOUs

Don't forget that the £80 doesn't come out of your 'net pay' (i.e. what hits your pocket). With the tax relief, that £80 only actually costs you £64, plus your employer will be paying into the pot aswell.

If you genuinely can't afford it then nobody can force you to be in a pension scheme, and if you are auto-enrolled you are entitled to opt out, but it may be worth looking at whether you can stretch your budget to make it work as you may regret not contributing to it in the long run.

Joanthebone

I do hope you can find a way to joining your employers pension scheme. Due to circumstances beyond my control, I have no private pension. The state pension is hardly enough to live on now, goodness only knows what you will get in the future.


If you can find a way to afford it, even if it leaves you really skint, do it!! take it from one who is suffering now, pension time comes round very quickly!

Aria1986

Thank you for the replies im so confused about the whole thing. I was offered the workplace pension when I first joined and I opted out to which they have offered me it again. The reason I can't really afford it at the moment is im due my first baby any day now and it was my manager who told me I would be fined if I didn't get myself some sort of pension starting from this month due to the new changes. I will join a pension at some point I just can't right now but my manager has made me worried now about being fined. But if needs must I could manage £40 a month but really no more but my work doesn't even give you the option of how much you decide your putting in.

hugheskevi

If you receive (or will receive post baby) any means-tested benefits, they may well increase if you contribute to a pension which would further reduce the net cost. When making your decision be sure to work out exactly how your net income would change if you contributed to a pension.

You will not be fined by anyone for opting out of the pension, your manager has misunderstood how everything works so just ignore anything s/he says.

jamesd

Aria1986 wrote: »

I'm being told if I don't join their workplace pension I will have to go with a private pension or be fined by the government is this correct?

It is not true. There are no fines for employees regardless of what they do to enrol or not in workplace pensions. Nobody will fine you if you do not join the work or a personal pension.

Employers can be fined if they refuse to auto-enrol an employee. They are not allowed to accept a request not to be enrolled, they must enrol them then have the employee opt out if they don't want to be in it.

So your employer should just enrol you when required then you can opt out when you get the letter with the paperwork telling you how to do that. The regulations mean that this will come from the pension firm, not your employer.

Even if an employee opts out, the employer has to opt them in again a few years later, so that employees who might change their mind get opted in unless they again choose to opt out. So just let your employer do what they have to do, then opt out again and repeat this every few years so you both follow the rules properly.

The purpose of this cumbersome system is in part to make it harder for employers to apply pressure to employees not to join the pension scheme and in part because many employees won't bother to opt out, so end up in the scheme anyway even if they wouldn't have chosen to join if asked.

atush

You will not be fined, and it will only cost you 64 quid for a pension of 160 being paid in each month. I cant see how you can afford NOT to join?

Factor in CB once baby is born, and streamline your outgoings. See if you can afford it. Ask the baby's father for help. If you are married or life partners it will benefit him for you to have a pension.

seven-day-weekend

Joanthebone wrote: »

I do hope you can find a way to joining your employers pension scheme. Due to circumstances beyond my control, I have no private pension. The state pension is hardly enough to live on now, goodness only knows what you will get in the future.


If you can find a way to afford it, even if it leaves you really skint, do it!! take it from one who is suffering now, pension time comes round very quickly!

Absolutely agree. When I saw the OP's post saying they couldn't afford to join, my initial reaction was 'they can't afford not to'.

They will really regret it at retirement.