Nest opt out with an employer

carolmiers

Hello, I am 65 so just under 2 yrs to go until I get a state pension

I have started part-time work and it's for a not for profit. I don't understand the UK rules (and I 've just read a little about Nest and 8% contribution) - I have been living in Europe.

So the bosses said they are opting me out of the scheme and putting in the money of their contributions into my holiday fund and that I have to make an 8% contribution from my wages to a pension scheme ? I am not earning very much - so - is this a good idea ? What does it really mean? Am I better off opting out? If I don't opt out being as I am near to retirement will it make any difference ?

Are they saying that if I opt-out I am paid their 3% is it ? contribution into my account to put in myself ?

They said it would be an awful lot of paperwork not to opt me out, they are small and as I say a not for profit enterprise. Thank you please explain slowly !

El_Torro

My first impression when reading your post is that your employer is doing something dodgy. I might be misinterpreting it though, or maybe you are.

Legally your employer should allow you to enroll into a pension where they pay a minimum of 3% of your salary into. I don't see paying into a holiday fund instead of your pension being a valid reason for them not to contribute to your pension.

Reading your post again it looks like you're actually saying that your employer does not want you to opt out of the pension, not that they are offering you an alternative. It's a good thing for you not to opt out, your employer's contribution is essentially free money for you after all. Opting out would be like accepting a pay cut.

JoeCrystal

I did do some reading and it seems if the overseas employee does not "Ordinarily Working" in the UK then it doesn't apply apprantely. But it might be more complex than I think.

itsthelittlethings

Legally you have to choose to opt out - it’s your choice. If you insist on being in the pension, they have to put you in (although you say you’re part time - are you earning over the limit for auto enrolment).

If enrolled, you do have to contribute to your pension from your wages. The employer contribute too - hence you will not be missing out on the free money the poster above refers to as you say they have said they’ll put it in your holiday fund.

Firstly this is a complex set up and it will be hard to keep track that you're getting the money you’re entitled to. It depends how much you trust your employer. Secondly it’s always good to build up a pension.

Ultimately it’s your choice. You’re entitled to a pension if you fulfill certain conditions and whether it’s too much paperwork for your employer is neither here nor there.

Marcon

https://forums.moneysavingexpert.com/discussion/6655182/nest-opt-out-with-an-employer

There are already plenty of comprehensive explanations available, which you can then read at your leisure (and re-read as necessary!).

Try https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/automatic-enrolment-an-introduction

carolmiers

Thanks I will ask them for a clear explanation of what they are suggesting as I don't understand it

They said this

The pension is Nest so you can look it up on line. You have to opt in or opt out. if you opt in the shop gives you an amount and you have to give at least 8% of your wages to it. It all comes out of your wages before you recieve amount as tax does. Or you opt out and do your own pension, both don't get taxed. If you want to get advice or look online at it please do and we can have a chat when next in

Albermarle

Normally an employer is forced to contribute to your pension, but there some get outs when it comes to very low earners.

You need to post your income, to get better responses from the forum.

itsthelittlethings

It’s not opt out or opt in. You are auto enrolled and then can choose to opt out.

8% isn’t right, I think it’s 6% and employer’s contribution 3%.

itsthelittlethings

I’m wrong. It’s 4% from you, with another 1% added by the government as tax relief and 3% from the government making 8% in total.

You can still opt in if you don’t earn enough for auto enrollment. However your employer may actually be being rather generous if you don’t earn enough for auto enrollment.

MallyGirl

3% from employer?

itsthelittlethings

https://forums.moneysavingexpert.com/discussion/comment/81883483#Comment_81883483

Sorry yes should be 3% from employer.