Work pension scheme, very confused ??

[sophiesophie88]

Hi can anyone tell me any more about the new work pension scheme. I'm very confused by it all. I've tried reading up but my employer is trying to convince me to opt out and instead have the money added on to my wages as he said this can be done. Personally I don't think he wants the hassle to find a pension provider and do the paperwork.

Any one else having the same issues x x

Take no notice of him. You will be better off with a workplace pension than having the money added to your wages.

www.moneysavingexpert.com/savings/discount-pensions

www.gov.uk/workplace-pensions/about-workplace-pensions

It is illegal for your employer to try and persuade you to opt out.

Your employer shouldn't encourage you to opt out. But it is putting a strain on small businesses so I can see why some will.

Your contribution would be 1% and your employer 1% currently. This may be 1% of your qualifying earnings, which is your monthly salary - £490 (from memory). This will rise to 3% you 2% employer then 5% you 3% employer in 2019.

NEST have a forecasting tool on their website which will estimate your pension pot.

Nooooooo, under no circumstances opt out. What he is doing is at best immoral, and at worst illegal. I'm 50, if I had a time machine and could go back and speak to my younger self, honestly, I would tell myself to put more into my pension.

I've done a bit more research and I think I'm going to opt in for the pension thank you all so much for getting back to me. Thank you for the links sausagedogrolls and thank you southerncomforts this makes a lot more sense than all he other facts and figures x x

If possible pick a scheme with low administrative costs, that's important, due to the effect from earning 'interest on interest' (compound interest).

It's much more tax effective for you to put the money into a workplace pension.

And yes, as others have said he is breaking the law.

Does any one have any experience with nest as this seems to be the main one everyone is using. Or can anyone recommend any others

Many thanks Sophie x x

No, none whatsoever, but I suggest you google the exact phrase "How We Run Our Money: NEST IPE" and read the article.

NEST is the governments workplace pension. Set up as a default for all, lots of small employers use it, some consider it the lazy mans pension. It does exactly what it needs to but there are loads out there with bigger providers.

Or tell your boss to try somewhere like the Federation of Small Businesses. They offer members a workplace pension scheme at a low rate, provided by a market leader and for a small fee they will do all the admin so it means your boss won't have to hassle.

Do not opt out and it's illegal for him to tell you to or encourage you to.

Well, I don't know anything about NEST other than what I read in that little IPE article, but on the good side it seems the administrative costs are low, and if it is as Xmasfairy86 says, it's highly unlikely to be run by a bunch of lunatics at any future point, as the government will surely see to it that there are sensible people running the money. Too many interests invested in the scheme for the system to just let it go bust at some future point. That's what I'd be thinking. That's what I am thinking, actually.

As for the 'lazy mans pension', over where I have my pension (another country) it's the 'lazy mans pension' - the default alternative - that has proven to be the best one. Big scheme, low fees, sensible board of directors, high profile and watched by the press, all those little things make a huge difference. When it was first launched one had to choose, there were huge campaigns and I thought I would do better if I chose 'sensibly' but in hindsight it were all those people who hadn't chosen and who got the default alternative, who made the most money compared to all of us who tried to make the right choice. Then I asked a colleague who at the time was a professional working on the interest rate markets, and it proved he had it too! The 'lazy man scheme'. But actively chosen from knowing it was the best. That piece of information sort of settled it for me. So, you're right about feeling it's confusing and a hassle to choose "wisely" but you probably don't have to. In my view, all one has to do is to go with a good-enough and reliable scheme where there are other forces (high profile, watched by press, government interest) making it stay in check.

Thanks fiftytwoplus you've made me feel more comfortable with going with this option. It sounds a lot safer and it is highly unlikely as you said for it to go belly up due to the amount of press and coverage it has.

Thanks for all the advice, now just to get on to the boss to fill out the paperwork as time is ticking and deadline getting closer x x

It's definitely a safe place. The government are trying to promote saving for retirement, so anywhere you can stash your cash AND get an employer contribution is a good thing. When NEST was first set up it wasn't seen as the most accessible pension, a lot has changed. It's still more beneficial for the smaller employer and does just what it needs to.