Auto-enrollment isn't until 2017, is that a cause for concern?

orange-juice

Hi there,

As a new user, I hope this isn't an often asked, silly question.

Basically I found out recently that the staging date for auto-enrollment at my workplace isn't until 2017.
Obviously this isn't ideal but is it a cause for concern? Are pensions one of those things where you should get onto it asap? I'm incredibly ignorant of the whole pension system.

I haven't got much of an employment history having been unemployed for a while post further education.
As such, I do not have much disposable income or savings to shell out for financial advise.

Is it perfectly fine to follow Martin's saving fountain trick (HTB > high-interest current account > high interest savings > cash isa..) until my pension enrolment date?

Also, I've heard of salary sacrifice, but I'm not particularly well read on it. Is everyone free to choose it or does the employer need to offer it?

FYI, I'm earning just above minimum wage and a lower income tax rate payer.

Thanks for any help.

JoeCrystal

Well, the first thing you need to look into is does your employer offer any pension schemes that you can enter?

xylophone

There is no existing pension scheme?

The advantage of joining an employer's scheme is that the employer will usually contribute and often match, (or match up to a certain level), the employee contribution.

If you are low paid at the moment, and there is no existing scheme,you might prefer to wait until the auto enrolled scheme starts.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/508117/Lifetime_ISA_explained.pdf is available from next year.

Some information about salary sacrifice here https://www.moneyadviceservice.org.uk/en/articles/salary-sacrifice-schemes

You might wish to consider a help to buy ISA if you are eligible.

And make sure that you have the best current account(s) for your needs.

Marktheshark

The I am in pension can not give any example of what you might get out for what you put in.
With any financial product, thats the important bit in my opinion.

Hence why so many are ditching the black hole of pension funds for BTL property.

dunstonh

The I am in pension can not give any example of what you might get out for what you put in.

All pensions do this. Indeed, it is a requirement that they do it.

orange-juice

Joecrystal wrote:

Well, the first thing you need to look into is does your employer offer any pension schemes that you can enter?

xylophone wrote:

There is no existing pension scheme?

Not to my knowledge. Co-incidentally, I received an updated staff handbook recently and in the pensions bit, it says the following :-

Where the company joins an auto enrolment you will be entitled to opt-in or out dependent on your preference. Please note if you choose to opt-in you will be automatically opted in annually which will require you to opt-out each year.

When I first joined, the pensions bit in the handbook was empty!

Xylophone wrote:

You might wish to consider a help to buy ISA if you are eligible.

And make sure that you have the best current account(s) for your needs.

I'm earning £16000 per annum before tax.

I've just recently subscribed to a Santander Help-to-buy ISA and have just recently completed the transfer in form from an old cash ISA. Bit gutted that I've just realised it's 2% so I'll be sure to change provider once the transfer has completed (even if it isn't much!).

I'm currently on that Halifax current account (which I switched to for the £100 reward), and in the process of switching to the co-operative current account for the £150 reward.

I think I'll wait for auto-enrolment then.

System

I don't think that wording is correct.
You don't have an option not to join - the rules say all qualifying employees will automatically be enrolled. Any who want to leave may then do so.

redpete

Marktheshark wrote: »

The I am in pension can not give any example of what you might get out for what you put in.
With any financial product, thats the important bit in my opinion.

Hence why so many are ditching the black hole of pension funds for BTL property.

Ditching a pension scheme investment for BTL is terrible advice (IMO and caveated because we don't know all the OP's circumstances).

I certainly wouldn't want my 'pension' to depend on a single specific investment, i.e. in a house. A spread of funds in a pension scheme has tax advantages on investing and diversity (if done wisely) so you are not dependent on the performance of one sector, one geographical region (i.e. not one house in one street on one town in one region in one country), or one type of investment (shares, bonds, cash, property, ...)

xylophone

I think I'll wait for auto-enrolment then.

See https://www.gov.uk/workplace-pensions/about-workplace-pensions

I've just recently subscribed to a Santander Help-to-buy ISA and have just recently completed the transfer in form from an old cash ISA. Bit gutted that I've just realised it's 2% so I'll be sure to change provider once the transfer has completed (even if it isn't much!).

See http://www.moneysavingexpert.com/savings/help-to-buy-ISA