pension advice

stoveman

hello everyone,

Am just after a bit of advice if possible.

I used to work for comet (the electrical retailers) and started a pension up with them. I then left comet and started working for a local familly business.

I phoned up the company I had the pension with as it had been frozen for something like a year and they said i had £700 odd in there.

I really need to get the pension going again as im 26 now and want to be prepared for the future and as the wife has a nhs pension she is sorted but mine will be be poor if i leave it.

The family business im with now does not provide any pension at all and are not prepared to pay anything into my pension so I need to work out the best way around it.

Any recommendations on what you think would be best? Do i just continue paying what i can afford into the current pension i have or do i transfer to something else?

I know nothing about pensions. I think its a stake holders pension I have now

any advice will be great

cheers

Dithering_Dad

I would sort yourself out with a Stakeholder pension, transfer your comet pension into it and then make monthly contributions yourself.

I'd also look at finding a job that pays the same, involved the same sort of work but with an employer that does contribute towards your pension!

stoveman

cheers for the reply.
i think if i send a fax to the existing one i can continue that one so thats probably what ill do.

i need to find something but im in a job that i just wouldnt get anywhere else. will have to just keep an eye out i guess

dunstonh

The family business im with now does not provide any pension at all and are not prepared to pay anything into my pension so I need to work out the best way around it.

I suggest you talk to them again because they will be forced to from 2012. All employers will have to pay into pensions from that point. If they are not preparing for it now then the cost could come as a shock.

stoveman

thats interesting to know, thank you. 4 years away mind but at least thats something :beer:

dunstonh

Its 4 years away but many companies are phasing in provision now so they dont take the hit in one go.

i.e. start a group pension now and pay 1% into it and then increase it by 1% a year until they meet the required minimum standard.

Of course, a good number of companies dont realise this is coming until someone tells them.

stoveman

is there any documentation online that says this as I will bring it to my bosses attention, but ill know he will want to see it

dunstonh

http://www.thepensionservice.gov.uk/pensions-reform/personal-accounts.asp

Its known as the NPSS (National pension savings scheme) or personal account.

It is still to be finalised in its exact form but it is on track for 2012.

The key part is this:
There will be a duty on employers to provide a workplace pension scheme or a personal account for their employees, and also to contribute a minimum of 3% (on a band of earnings) to employee’s pensions. This will sit alongside 4% from the employee (on the same band of earnings) and around 1% from the Government in the form of tax relief.

It should be noted that the NPSS does not get higher rate tax relief so if there are employees at the workplace who are higher rate taxpayers, the company would be better off setting up a group personal pension as that will still continue to get higher rate relief. There is no cost difference to the company as the contribution limits can be identical.

A popular method for companies at present is to phase it in at 1% a year for the next 3 years so they are at the 3% mark by 2012 and dont have to worry about this. It can be priced into their annual pay review so the costs are more easily absorbed.

cyclonebri1

dunstonh wrote: »

http://www.thepensionservice.gov.uk/pensions-reform/personal-accounts.asp

Its known as the NPSS (National pension savings scheme) or personal account.

It is still to be finalised in its exact form but it is on track for 2012.

The key part is this:
There will be a duty on employers to provide a workplace pension scheme or a personal account for their employees, and also to contribute a minimum of 3% (on a band of earnings) to employee’s pensions. This will sit alongside 4% from the employee (on the same band of earnings) and around 1% from the Government in the form of tax relief.

It should be noted that the NPSS does not get higher rate tax relief so if there are employees at the workplace who are higher rate taxpayers, the company would be better off setting up a group personal pension as that will still continue to get higher rate relief. There is no cost difference to the company as the contribution limits can be identical.

A popular method for companies at present is to phase it in at 1% a year for the next 3 years so they are at the 3% mark by 2012 and dont have to worry about this. It can be priced into their annual pay review so the costs are more easily absorbed.

Am I correct in thinking that there will still be an opt out for any individual employee who does not wish to take advantage?, because given the chance some will.

dunstonh

Am I correct in thinking that there will still be an opt out for any individual employee who does not wish to take advantage?, because given the chance some will.

Yes. Although goodness knows why they will want to throw away 3% free money.

I believe the Govt is hoping for over 70% take up. The insurance companies are hoping that better investment options and higher tax relief will see an increasing number of companies use them instead of the NPSS.

stoveman

thanks for the link thats brilliant

wish it was starting this year though lol