What is seen as 'the best' workplace pension provider?

JustAnotherSaver

I suspect that this isn't a question that can really be answered but i'll ask all the same.

I was only really aware of 2 providers although I knew there were more. Became aware of a third this week after a relative joined up with a new company and was put on to their scheme.

I'm familiar with Now Pensions & NEST and this week became aware of The People's Pension and just wondered if any is seen as being the best and why (or if not best then is there any seen as not so good - either due to how the money is invested or the charges maybe)?

I know with Now Pensions you have little say beyond do you pay in the minimum or do you want to pay in extra. As for how it's invested they have their views and that's the way it is, end of.

I'm familiar with NEST also and it gives the user an option at least, where they can invest in something a little more adventurous than the default. I haven't actually compared the charges on those two providers.

Albermarle

There are a lot more workplace pension providers than these .

The ones you mention are relatively new, and were set up to cope with the big increase in ( mainly small value ) pensions after compulsory auto enrolment started .

Before that many ( better/bigger  ?) employers voluntarily ran workplace DC pensions , mainly with traditional insurers, like Standard Life, Aviva, Aegon, Prudential, Scottish Widows etc 

JustAnotherSaver

Albermarle said:

There are a lot more workplace pension providers than these .

The ones you mention are relatively new, and were set up to cope with the big increase in ( mainly small value ) pensions after compulsory auto enrolment started .

Before that many ( better/bigger  ?) employers voluntarily ran workplace DC pensions , mainly with traditional insurers, like Standard Life, Aviva, Aegon, Prudential, Scottish Widows etc 

Ahh. In that case I can see my question is going to get tripped up by those people who work for decent employers who go above and beyond and have been doing so since day dot. I remember a thread a bit ago and most people on this message board seem to have these kinds of employers, as people responding to it who were in a situation like mine (got bare minimum) were pretty rare, even though in offline-life, I know very few people who get paid above bare minimum. The majority of people I know get exactly that - minimum.

So therefore, if it's even possible, I'm talking about those who without the compulsory auto enrolment wouldn't even be on a workplace scheme because the workplace wouldn't give them an extra penny if they didn't have to. I would assume (possibly wrongly?) that they all dashed for a quick last minute fix and went for a quick 'that'll-do' before getting back to 'proper work'.

Out of curiosity, do different providers affect the employer in different ways the same way it affects the employee?

My wife and I are with different providers - Now & NEST. There's different charges on the funds I'm sure, I'd be very surprised if they were the exact same. Do the employers get charged anything different when picking one over the other or is their only charge the 3% they put in?

Marcon

JustAnotherSaver said:

I suspect that this isn't a question that can really be answered but i'll ask all the same.

I was only really aware of 2 providers although I knew there were more. Became aware of a third this week after a relative joined up with a new company and was put on to their scheme.

I'm familiar with Now Pensions & NEST and this week became aware of The People's Pension and just wondered if any is seen as being the best and why (or if not best then is there any seen as not so good - either due to how the money is invested or the charges maybe)?

I know with Now Pensions you have little say beyond do you pay in the minimum or do you want to pay in extra. As for how it's invested they have their views and that's the way it is, end of.

I'm familiar with NEST also and it gives the user an option at least, where they can invest in something a little more adventurous than the default. I haven't actually compared the charges on those two providers.

There are very many providers. 'Best' depends on what you're looking for. If you are a few years away from retirement and want to pay in a lot of cash, then NEST's contribution charge of 1.8% isn't good news - but if you are in your 20s and want minimum fuss, it looks much more appealing. If you fancy making your own investment choices, NOW isn't going to offer that - but if you don't want to take investment decisions, it fits the bill perfectly.

But as it is for the employer to choose the scheme, there's not much point agonising.

ewaste

I've got both a NEST and People's Pension kicking about from previous short term employment a few years ago. I personally preferred the People's Pension, there wasn't the contribution charge and for whatever reason, as daft as it sounds, preferred the website. However I changed my defaults for both on pretty much day one of getting details.

Although as you pointed out being on this forum typically means we aren't the usual punter who doesn't know the first thing about pensions or personal finance. I also had a SIPP throughout which is where I paid in any pension contributions over what the employer would match. 

The employer offering NEST was legal minimums, as you said 'that'll-do' box ticked back to 'proper work'. However the employer with the people's pension matched beyond minimum contributions although that was likely more to do with with being a small employer with <50 staff owned by an older gentleman with nobody to really leave the business to. 

triplea35

You are right, many are in the position you describe and I do fear that the knowledge they are in a pension fund may mislead them into thinking they will be be ok in retirement. My son, 29,  works in hospitality and although on a semi reasonable salary of around £30k his employer pays the minimum contributions ( 5% employee 3% employer) and does not include the first  £6k of salary in the calculation which they are allowed to do. He has moved around quite a bit and all his employers have been the same. 

He has been with Nest a couple of times and I cant say I liked the 1.8% contribution charge. It put me off making substantial contributions into it for him so we just opened a general SIPP and I intended to transfer into Nest thereby avoiding the contribution charge and just paying the .3%amc.

He changed employer again and is now with  The Peoples Pension (B&CE). They charge .5%amc but have a rebate system for larger amounts so by transferring his SIPP into it we have got the charge down to .27% 

I also have a pension which I don't intend to draw upon and will leave to him and have recently transferred to Nest ( Peoples Pension do not seem to want sole traders) and into the Sharia Fund (100% Equities) It is very much the same as The Peoples Pension Sharia fund as they both track the Dow Jones Islamic Titans Index.

Fundwise have you had a look at the performance of the funds. Using Trustnet you can explore and compare all the fund choices of Nest, B&CE- The Peoples Pension, and Now. Although past performance is not be relied upon for the future you will see that NOW is not particularly impressive!

LHW99

Better or not unfortunately is not going to be a question for most of those whose employer uses these schemes, because that's what the employer uses and many won't see a need, or even have the financial space to invest elsewhere.

The employers are likely to be small / micro companies and may also not have the knowledge / financial stability to use a traditional provider with more / better choices of funds.

Albermarle

I think also these autoenrolment providers made the process simpler for employers and employees than it was traditionally with the larger providers .

I also have a pension which I don't intend to draw upon and will leave to him and have recently transferred to Nest ( Peoples Pension do not seem to want sole traders) 

I think as a sole trader you can have your pension with a much wider range of providers, like the SIPP providers often mentioned on here. .
They are geared up for dealing with individual investors , whereas the providers you mention are more focused on workplace pensions .

Albermarle

Ahh. In that case I can see my question is going to get tripped up by those people who work for decent employers who go above and beyond and have been doing so since day dot. I remember a thread a bit ago and most people on this message board seem to have these kinds of employers, as people responding to it who were in a situation like mine (got bare minimum) were pretty rare, even though in offline-life, I know very few people who get paid above bare minimum. The majority of people I know get exactly that - minimum.

It is not just a matter of good or bad employers , it can also related to the type of business they are in , how large they are and the type of employee.
If for example the company is a large IT company , or manufactures aircraft parts , it needs a lot of skilled people who will be in demand , so they need to offer a good package to retain staff.
Also the more skilled staff or managers , may be on a better pension package than more unskilled workers .
Although in the private sector the majority of the really generous final salary schemes are no more .

It is supply and demand . The more you are needed as an employee and the more difficult it is to replace you , the better employment package you get . Or with pensions you can work in the public sector, where all staff get a good pension , although not necessarily a good salary.

JustAnotherSaver

Marcon said:

There are very many providers.

But as it is for the employer to choose the scheme, there's not much point agonising.

Ahh.

I was under the [incorrect] impression that when the auto enrolment came out and those employers who didn't pay in who were then forced to, that there were a small handful of providers for the employer to select from.

And as for agonising ... don't worry, that isn't the case. There's a difference between being curious and agonising

triplea35 said:

You are right, many are in the position you describe and I do fear that the knowledge they are in a pension fund may mislead them into thinking they will be be ok in retirement. My son, 29,  works in hospitality and although on a semi reasonable salary of around £30k his employer pays the minimum contributions ( 5% employee 3% employer) and does not include the first  £6k of salary in the calculation which they are allowed to do. He has moved around quite a bit and all his employers have been the same. 

He has been with Nest a couple of times and I cant say I liked the 1.8% contribution charge. It put me off making substantial contributions into it for him so we just opened a general SIPP and I intended to transfer into Nest thereby avoiding the contribution charge and just paying the .3%amc.

He changed employer again and is now with  The Peoples Pension (B&CE). They charge .5%amc but have a rebate system for larger amounts so by transferring his SIPP into it we have got the charge down to .27% 

I also have a pension which I don't intend to draw upon and will leave to him and have recently transferred to Nest ( Peoples Pension do not seem to want sole traders) and into the Sharia Fund (100% Equities) It is very much the same as The Peoples Pension Sharia fund as they both track the Dow Jones Islamic Titans Index.

Fundwise have you had a look at the performance of the funds. Using Trustnet you can explore and compare all the fund choices of Nest, B&CE- The Peoples Pension, and Now. Although past performance is not be relied upon for the future you will see that NOW is not particularly impressive!

Jeez, if 30k is considered 'semi reasonable' then I and pretty much every person I know must be on something that can only be classified as 'dire' then. Also ties in with the fact that I do feel that 99% of this forum are in a different (considerably higher) pay bracket to not only me but pretty much most I know too.

I agree with you with NOW though. I wasn't that impressed. Information seemed awkward to get. I much preferred NEST, it was so much easier to navigate and get info. I've been with NOW throughout though.

For myself, I just pay in the minimum required to get the employers maximum, which is basically the minimum required - 5% to get 3%. Beyond this I pay in to my SIPP and this year will be using the LISA as well.

LHW99 said:

Better or not unfortunately is not going to be a question for most of those whose employer uses these schemes, because that's what the employer uses and many won't see a need, or even have the financial space to invest elsewhere.

The employers are likely to be small / micro companies and may also not have the knowledge / financial stability to use a traditional provider with more / better choices of funds.

Speaking for my own employer, I don't think it comes down to knowledge, I think it comes down to caring - and my employer will do absolutely zero on that front  when it comes to caring about your pension.

If it costs them more to choose NEST over NOW then they will opt for NOW. In other words, if picking A rather than B, C, D, E etc costs them the least then that will be how they select. If it makes zero difference then it will have been a simple case of eenie meenie, hurry up and pick something and then get back to proper work. It honestly will. With my wife for example, I can dare bet that her employer who isn't that bad actually, probably selected NEST based on that's a pretty well known one that's getting mentioned at the moment so it must be good (so yeah, knowledge on that front).

triplea35

I think as a sole trader you can have your pension with a much wider range of providers, like the SIPP providers often mentioned on here. .
They are geared up for dealing with individual investors , whereas the providers you mention are more focused on workplace pensions .

I actually transferred it to Nest from a mainstream SIPP provider for simplification, fund choice and cost. The preferred fund choice, HSBC Islamic Global Equities has a fund charge of .95% + platform costs  whereas with Nest fund choice which is further invested into the same HSBC fund has a combined fund and platform cost of .3%. I hope I got that right.