How do i persuade step son to rejoin his employers pension??

Hoenir

Crudecheese said:

He likes to play golf maybe once or twice a month, eats out now and again, enjoys going to ‘see a show ‘now and again and he loves his Sky tv package to watch the footie….

Hardly seems excessive. Sometimes in life a balance needs to be struck. Hopefully in due course he'll find a new partner. Get on a more stable financial footing and be able to save for the longer term. 

Storcko14

The short answer is that you can't.  Could there be a reason, e.g., he's worried about pension splitting upon divorce?  It sounds like the prospect of him moving in with you is an issue for you so one thing you could try is agree that he can move in on condition he re-starts the pension since presumably you / his mum won't be charging him a market rent.

kinger101

Tell him to get saving because you're giving it all to the donkey sanctuary when you kick the bucket.

If he lived in the USA, he could get access to more Premier League games for less money.  Or if his internet lived in the US.temporarily between KO and final whistle.....

crv1963

I can understand your concerns but........you do not really have the grounds to raise this with him. His hobbies don't sound excessive for his salary, his rental and child maintenance costs will be taking their toll on his income. You have a choice about him moving in with you, you and your wife made the choices you have regards your finances.

If you must raise the issues then I would just say "can I discuss the future with you?" then say I understand the why you have stopped pension contributions but "do you know how much extra this actually brings you home after tax and NI?" and "how much your employer pays in is like taking a deliberate pay cut". "I suggest maybe once you feel better placed that you consider re-joining the pension" and finally "I know it's none of my business but if you want to think about and talk through your options, I am here for you".

I gave my sons information about pensions and planning, one came back for more advice and help planning, the other has never said a word further but I know from his brother that he has a remarkable savings rate, but probably didn't want to discuss his pans with me!

Sometimes the best support for someone who's world has changed dramatically is to simply say that you're there if they want to chat, or discuss things through.

Pollycat

If he won't listen, he won't listen....

A chap I worked with (married, 2 kids) also made the decision to come out of the pension scheme, very good final salary one.

A couple of years later, he died in an accident.
His widow would have been eligible for 4 x salary death benefit.
She was eligible for £00000.00.

In the same circumstances, your stepson's children be eligible for the same.

Moonwolf

I think a good objective is to try and have the same standard of living through your later working life and retirement.  That might mean 90% of what you could manage if you didn't save for a pension.

I admit, that is a very difficult goal early on what with student debt, getting on the housing ladder and building up emergency savings.

Once over the early hump.  Anyone who likes golf shouldn't be sacrificing retirement on the golf course for an extra round now.
Someone who likes cycling should probably eschew a third bike now in order to be able to get a good one when they are retied.

However I don't believe there is any point in having no holidays for 40 years in order to go on a world cruise in retirement, as much as anything else, because there are so many uncertainties. 

MetaPhysical

You can't put older heads on younger shoulders sometimes.

kimwp

You could make it a condition of moving in with you that he creates a financial plan with and without contributing to his pension. But at the end of the day, it's his choice

Roger175

I was also wondering whether you could link it to him moving in with you. You don't say if he will be paying you any rent, but you could, for instance, say that you would be able to offer rent-free on the proviso that he re-commences the pension. OK, you'd be paying his pension contributions, but if you can afford to help, at least he's not going to be missing out on those valuable contributions. 

Pat38493

Other than the points you have mentioned, it depends on his personality and what you think he will respond to, but the main additional points are:

- By leaving the pension, if he dies whilst still working he has probably also given up a large death in service payment which would go to his kids.
- He is giving up free money from his employer going into the pension scheme.
- The actual net amount he gains from coming out of the pension each month is not as much as what he is paying in. 

This could get (a lot) worse in the next few years as the missing pension contributions will push him into the 40% tax bracket and also put him over cliff edges that stops him from accessing certain benefits and services.
Rough example - if he was putting 5% and employer 3% (legal minimum) into the pension, his pension would get around £320 per month.  Instead, he is getting a net pay uplift of £156 per month (not sure if my maths is exacctly correct but it's in that ballpark).  

And even that is assuming that he doesn't have taxable employer benefits that pushes him into the 40% tax bracket - once he is in the 40% tax bracket which he will reach with another pay rise or two, his net gain will be £116 for surrendering £320 per month into the pension.

If he was contributing to the pension by salary sacrifice it's even worse.

If the employer is willing to match a higher % than 3% it's even worse.  Many employers will match up to 7% or more.

Even if he ends up having to split the pension with his ex, he is still worse off by not putting the money into the pension.

If he doesn't care about money and is only interested in instant gratification, none of the above is likely to work, but maybe if he understands that his short term monthly gain for giving up all that future money is not as big as he imagines!