Employer pension contributions

Agree.
My nursery bills were more than my mortgage and I was a single mum and never spent a penny on anything non essential (and sometimes skipped meals) but I still paid into my pension. I just saw it as a non negotiable expense. My pot is worth nearly £500k now (in my mid 40s)

tbh I don’t even get why anyone could perceive it as unfair. It’s a scheme available to every employee; therefore everyone is treated equitably. It’s not the employer’s business how people carve up their earnings. I know quite a few people who’ve chosen to opt out of their employer’s pension scheme (a poor decision imo but it’s their right.)

@oneinataxioneinacar when we had young children in nursery (back in the days before any childcare subsidies!) the equivalent of my take home pay was spent on the nursery bills. One of my main drivers for remaining in work was to keep my pension contributions unbroken. That’s how important it is.

if someone literally cannot pay into it and needs the money in their pocket now rather than in the future, it still doesn’t mean the employer is being unfair. What would be unfair would be for them to make some weird exception for the OP and pay into her pension while she doesn’t and keeps the money!

Yes that's how I seen it. I understand why it's perceived as unfair but it's designed as a huge carrot to push people to save for their.retirement

I've always paid in, even when I had no disposable income at all . I see it as a necessary expense like council tax, not an optional one

Exactly this. Auto enrolment was introduced primarily to incentivise people to take responsibility for saving for a time when they are no longer working. The deal is that the employer will make a contribution provided the employee also makes a contribution.

@Adultdcs you have decided you want/ need more money in your pocket in the here and now instead of paying it into the pension fund. Your reasons are irrelevant. The fact is, you are receiving higher net pay because you aren’t contributing. The occupational pension is a shared responsibility: you pay in, they pay in. You don’t, they don’t.

you completely misunderstand the whole concept!

As far as I am aware, the employer contributions isn't there for equity. It is there as an incentive for everyone to take responsibility for their retirement because there are many warnings the Gvmt pension cannot sustain the growing older generation.

You are taking the view it is a free salary built into the business model. It isn't. It is a legislative incentive for individuals pension planning. That is completely different.

Yes, that was the point I was making.

In Australia it's compulsory for employers to pay 12% into your superannuation fund (basically employee savings for pension). The compulsory rate was much lower when I first started work. Some employers then have a matching scheme to contribute more. Where I work it's 17.5% total with me putting in 3% and employer topping up the difference from 12%. Over the years there has been times where putting in the extra has been hard but once you opt out you can't opt back in. Persevering with the payments has me in a good position for retirement.

I would recommend trying to start your contributions as soon as you can. The earlier you start you'll get the benefits of compounding earnings.

deleted as I realised I was wasting my time responding!

Sorry but YABU. Employers don’t generally contribute if employees don’t. I presume that if you request to start contributing your employers will start to contribute also.

So you've opted out?
Can't you put in a miniscule % so they still have to pay something?

They are your employers, not your parents.

It's not down to them what your budgeting skills are like, they are running a business.
Or do you think they should ask your financial status at interview and weed out the broke people 🙄

@Adultdcsif employee A can only afford one child but employee B can afford three, should the employer give A two more maternity leaves? And what about employee C who might wish they could have a child but doesn’t have the option?

Does that make things a little clearer for you?

Because the UK doesn't have a superannuation scheme like Australia, where one isn't allowed to 'opt out'.

Very few UK companies (large or small) offer non contributory pension schemes now and, if that benefit is more important to you than the base salary and benefits you currently have, the only option is to research companies and look for a job in one that offers a non-contributory scheme.

If you can't afford the minimum contributions of your workplace pension, there is nothing to stop you opening a personal pension and making the level of contribution you can afford. Although you would miss out on employer contributions, at least you would be saving something (it's worth checking that this is the most financially effective method for your circumstances though).

An issue is that if you are struggling to survive now, how will your retirement look? Even worse, I guess. Pay that 5% (before tax) now and have a slightly less poor retirement.

Does everyone at your work get paid the same?

It's easy to say "I can't afford it" but I think there are choices you're making. You are prioritising other expenses such as supporting an adult dc and your own living costs. I'm not saying that's the wrong choice, but it is a choice. I personally think it's a mistake for a working adult not to make pension contributions, and I would (I'm afraid) put that ahead of giving money to an adult at uni, who can work to support themselves.

😅😅😅

yes YABU.

You are being treated equally because the same rules apply to everyone. You either remain in the scheme and pay contributions and the employer also pays a contribution, or you opt out of that arrangement.

You have opted out (or chose not to join if this was pre-auto enrolment.)

The reason you aren’t in the pension scheme is irrelevant. It’s like someone telling their employer ‘I’m not a parent but I want you to give me maternity/ paternity leave because some other employees have it’ !!!!

Have you calculated what it will actually cost you in lost net pay vs what you gain going into pension?

Itll be less than the 5%.

You’re looking for free money which is never going to happen.

just like where my company offer extra annual leave for a price. You need to ‘buy’ your benefit (be it pension or annual leave or health insurance, etc) but that doesn’t make it unfair… different people have different priorities.

I get your point, OP. If you were to contribute your employer has to, so why shouldn't they pay in anyway?

Unfortunately, that's not how the system works. I would, as others have said, work out exactly how much you would actually lose out of your pay if you do contribute the bare minimum and see if you can find a way to make it work. For instance, for someone on 20k contributing 3% you are only giving up around £30 take home, for around £100 total going into your pension. It's not huge, but the earlier you start the more it will eventually be worth.

The employer has to opt you in but you have to opt yourself out, normally within one month of it starting.

OP, what do you mean why you say that you support your child at University? Does that mean that they haven't applied for Student Loans? If you have low earnings, they would receive the maximum amount of tuition fee and maintenance loans. Can your child get a part-time job and full-time work during University vacations?

Have you checked to see whether you are entitled to any Universal Credit? Could you apply for promotion or a better paid job elsewhere?

If you don't make any pension contributions, this removes your employer's responsibility to make contributions to your pension. You really need to look at other ways to cut down on your expenditure or to increase your income so that you can make your own pension contributions which will mean that your employer will be required to make their contributions to your pension.

@Adultdcscheck with your HR team and find out what the actual impact on your salary would be if you make the minimum contribution necessary to get the employer contribution. Then post it here we may be able to help you see how to make it affordable.

Honestly you are insane not to join auto enrollment, it is free money. Surviving on the state pension alone won't be easy.

Your daughter would surely prefer to help you afford pension contributions now than be lumbered with supporting an OAP parent living in poverty when she has a job and a family in 15-20 years time. If you won't make financial provision for the future for your own benefit do it to reduce the burden on her.

It is absolutely crazy to not be paying anything into a pension. You should tighten your belt in every other sense to be able to do this.