New pensions law from Oct 2012

ashleymp777

Ok, so hpw many people on here know about the new law bought in from October last year that means that employers (starting with the larget first and gradually over 4 years going down to smaller employers) will have to automatically put people into a pension scheme if they meet certain age and earnings criteria? And if so, how did you know?

For my sins I work for a pension provider who helps employers meet their new legal requriements and I'm fascinated to know how far this message has got.

daviesee

I do.
Self employed.
All employers should be aware of it. Push for it if they deny it.
http://www.dwp.gov.uk/policy/pensions-r ... n-reforms/

Anonymous

I know.
Worked for a V large accountancy firm

Mikey23

I work in social care and my employer was quick off the mark. All employees are opted in unless they opt out. I have my pension already and it took me three goes before they realised I didn't need it...

graeme_s-2

I vaguely remember the publicity in the press when the law was first announced. I think I've read something about my employer (a University, so a reasonably large employer) announcing it to staff, but I'm already in the pension scheme so didn't really pay that bit any attention.

redvee

Only been with my employer since October 2012 but have had a letter with the last wage slip about it and also a letter from Legal & General.

pliptrot

ashleymp777 wrote:

I work for a pension provider

So you're part of the industry that imagines that our investments will return 3% per year and offers annuity rates of 6%. And yet when ordinary citizens steal money from others they end up in jail.

Pep

pliptrot wrote:

ashleymp777 wrote:

I work for a pension provider

So you're part of the industry that imagines that our investments will return 3% per year and offers annuity rates of 6%. And yet when ordinary citizens steal money from others they end up in jail.

It's called financial industry. And this country is very proud of it (no, not me). They are not thieves, they are called "wealth creator".
Financial market: if you gain, it's because the gurus did a good job, that's why they charge a fortune. If you lose, bad luck mate, try again next round (mind you, they still charge a fortune).

BelgianBeerGeek

daviesee wrote:

I do.
Self employed.
All employers should be aware of it. Push for it if they deny it.
http://www.dwp.gov.uk/policy/pensions-r ... n-reforms/

Now I'm confused. If you're self-employed, isn't your pension your business? Are you made to get one?
As you can tell, I'm not self-employed.

daviesee

BelgianBeerGeek wrote:

daviesee wrote:

I do.
Self employed.
All employers should be aware of it. Push for it if they deny it.
http://www.dwp.gov.uk/policy/pensions-r ... n-reforms/

Now I'm confused. If you're self-employed, isn't your pension your business? Are you made to get one?
As you can tell, I'm not self-employed.

As a limited company employer, I am obligated to provide my employees (me) with a pension.
Unless as an employee, I opt out.
As a pension is tax efficient, I opted in. :P
It can be confusing at first but the company and the people are completely separate entities. And yes, there are legal obligations to be met.

pliptrot

daviesee wrote:

As a pension is tax efficient

If you're forced to buy an annuity then the only efficiencies are realized by the likes of ashleymp777's employers, who usefully use your pension pot to cream off excessive fees and provide inadequate returns. The tax saving is of little consequence when you see the pathetic returns on offer.

daviesee

pliptrot wrote:

daviesee wrote:

As a pension is tax efficient

If you're forced to buy an annuity then the only efficiencies are realized by the likes of ashleymp777's employers, who usefully use your pension pot to cream off excessive fees and provide inadequate returns. The tax saving is of little consequence when you see the pathetic returns on offer.

Simply not true and based on out of date perceptions.
http://www.thisismoney.co.uk/money/pens ... chine.html

rabk

pliptrot wrote:

ashleymp777 wrote:

I work for a pension provider

So you're part of the industry that imagines that our investments will return 3% per year and offers annuity rates of 6%. And yet when ordinary citizens steal money from others they end up in jail.

This ^^

VTech

But the company have to pay a premium along with the employee ?
Dont you think this will have a negative effect on jobs and job creation ?
Ive never quite understood the necessity to demand implementation, rather to give the best information and take of it what you will.
I know a lot of people who have saved a working lifetime to be left potless with failed investments in pension funds. It is often more than cruel.

daviesee

VTech wrote:

But the company have to pay a premium along with the employee ?
Dont you think this will have a negative effect on jobs and job creation ?
Ive never quite understood the necessity to demand implementation, rather to give the best information and take of it what you will.
I know a lot of people who have saved a working lifetime to be left potless with failed investments in pension funds. It is often more than cruel.

1. Yes.
2. Possibly.
3. That's what "they" have been doing and the result is that the majority have little or no provision for old age.
4. True. Which is why I waited until you could control the pension and after the crash.

Smug mode - I had been predicting the crash since 2000. Nobody listened then, and nobody listens now.

VTech

I listened to a very good interview a few years back and it was with an asian fella who was being questioned about making future provisions. He said something along these lines.

The average UK guy buys a house he can ill afford and spends the rest of his life trying to pay for it whereas more people in the asian community buy several cheaper houses, live in one and rent the others out then as we get older we sell the properties for a profit and thats our pension.

I found a lot of soul searching from that 20 minute interview and it changed a lot of the way I was thinking about future provisions.

pliptrot

daviesee wrote:

pliptrot wrote:

daviesee wrote:

As a pension is tax efficient

If you're forced to buy an annuity then the only efficiencies are realized by the likes of ashleymp777's employers, who usefully use your pension pot to cream off excessive fees and provide inadequate returns. The tax saving is of little consequence when you see the pathetic returns on offer.

Simply not true and based on out of date perceptions.
http://www.thisismoney.co.uk/money/pens ... chine.html

I'm guessing by the irrelevance of the article to which you link and how this has nothing to do with the fees involved in pension provison you work in the financial industry as well.

daviesee

Re VTech.
There is a lot of truth in that.
I know couples (not cash wealthy) that have 5 bedroom houses and I ask myself, why?

daviesee

pliptrot wrote:

I'm guessing by the irrelevance of the article to which you link and how this has nothing to do with the fees involved in pension provison you work in the financial industry as well.

You guess wrong.
I am fully aware of what is happening. Just as I am fully aware that I cannot depend on anyone else in my dottage.
And I am equally aware that putting things off does not help.
Research and make your own decisions based on your circumstances but you have to do something.

VTech

@daviesee, I think the issue is that due to there being no trust, where do people invest, what do they do ?
My mom lost a lot of money with a very low risk Barclays Bank fund, the money was partly from my fathers life cover and 70% went in a year, she didnt get any letters or information to tell her that the low risk was indeed being spread on US bank loans. To cut a long story short, she got her initial money back after seeking legal advice but my point is, she is very astute at planning and was "duped" by a so called trusted bank, what chance does the average person have ?

Pep

pliptrot wrote:

daviesee wrote:

As a pension is tax efficient

If you're forced to buy an annuity then the only efficiencies are realized by the likes of ashleymp777's employers, who usefully use your pension pot to cream off excessive fees and provide inadequate returns. The tax saving is of little consequence when you see the pathetic returns on offer.

+1

daviesee

VTech wrote:

@daviesee, I think the issue is that due to there being no trust, where do people invest, what do they do ?
My mom lost a lot of money with a very low risk Barclays Bank fund, the money was partly from my fathers life cover and 70% went in a year, she didnt get any letters or information to tell her that the low risk was indeed being spread on US bank loans. To cut a long story short, she got her initial money back after seeking legal advice but my point is, she is very astute at planning and was "duped" by a so called trusted bank, what chance does the average person have ?

I am not in the industry and wouldn't want to be so the following is not advice, simply the ramblings of a cyclist.

It is not easy, that's for sure. 10 years ago you could pick and choose what to invest in, now there is little to choose from.
..............
I started a whole ramble here but a few beers into a movie and it probably wasn't the best thing to do. Plus, I want to get back to the film.
Sorry.

dynamicbrick

Yes, I knew about it - mainly because my employer (one of the mobile telcos) sent everyone numerous communications saying they'd be opted in, even though I'm already in the company scheme.

I've been paying into pensions since I was 18, and now approaching 37 I can safe sit and ponder the amount of money I'll have when I jack it all in in another 30 years time. I'll have loads of money, frankly.

However, the problem is it won't be worth anything in 2043. For example, last month, one of my funds gleefully told me; At the current rates, your pension could be worth £9000 per year (in today's money)' So I should be able to sort myself with a loaf of bread, a tin of catfood, and maybe half a bitter in the pub (assuming there's any of them left) on a Friday afternoon then. No chance of nursing home or anything else.

The really depressing thing in all this is that with the various life policies and so on, I'm actually worth far more dead than alive.

VTech

I think that's the case for most. But even then, they would do all they can not to pay out !!

Courage Monsieur

I'm aware of it.

To give the government some credit it is quite a bold reform. Something the UK needs. Half the workforce isn't saving, and that's just storing up some big problems.

The whole pensions landscape in the UK is grotesque and a prime example of inter-generational unfairness.

Those in final salary pensions, both public and private (but going forward mostly public) are on very generous heavily guaranteed deals that the younger generation is subsidising, even though they struggle to save themselves, or don't bother because they're not interested.

And even if they do save they end up in much weaker and riskier 'defined contribution' pensions, which is what millions of low-paid workers will be auto-enrolled into. And yes, the industry takes some of the pot in charges and returns are low these days. The charges thing is improving though.

It'd be hard to make up an unfairer system.

Mikey23

Very fortunate here as I was a civil servant for 35 years and missus a teacher for nearly 40. I feel a tad guilty that I was able to retire at 60 on final salary pension scheme with lump sum and she will do the same next year and i also have bus pass, winter fuel payments free prescriptions etc and still able to work part time in a job that I enjoy doing as well as being fit enough to cycle. I think that is something that should not beyond a civilised society to provide for its citizens but sadly that does not seem to be the case these days

pliptrot

Courage Monsieur wrote:

deals that the younger generation is subsidising

How so?

Courage Monsieur

pliptrot wrote:

Courage Monsieur wrote:

deals that the younger generation is subsidising

How so?

1. Taxes - though we're all paying those the younger generations will pay them longer for pensions they themselves don't get. They'll be left holding the bill, and it's a huge bill and it's growing.

2. Working capital of firms (and charities, and local councils) - these pensions are hellishly expensive. Firms have to keep shovelling money into them. That's cash that could go on job creation, investment, returns to shareholders, rather than keeping some ex worker on 2/3 of his final salary for two decades.

University fees? All those protesting students might've asked a few pointy questions about the benefits being accrued and protected by the gigantic university pension fund, USS, that their fees are going directly into. But it was easier (and of course justified) to shout at Clegg...

mr_poll

Irrespective of the rights and wrongs this is happening so to the well informed I have a question.

My employer will be auto-enrolling very soon I have been told that they have assigned us a pension provider from our supplier list (of one company), when we enroll the employers NI they would have paid in salary will go with our contribution as our monthly payment.

1 - Do I have to go with the pension provider? If I don't like their portfolio or the charges can I choose my own?

2 - If I do choose my own does my employer have to pass the NI on to my choice?

Courage Monsieur

Mr Poll

1. Yes, you have to go with the provider your employer picks. However, most of them offer a huge range of funds and you can pick the portfolio you like, so you can customise it. (well done if you do, most people don't)

2. Not sure. You'll have to check. Doubt it.

The NI thing you're talking about is, I think, salary sacrifice. It's a (legal) tax dodge of sorts. Many employers do it.

What has been overlooked here in the totally understandable wariness about fees and the finance industry is that the pension is still worth doing as:
- you'll get tax breaks, even more so if you're a higher earner
- the main thing is you get the employer contribution (note that this is not the NI). That's the real gain. Extra pay. Free money. Find out what your employer contribution is and see how they'll match it with yours.

rabk

Courage Monsieur wrote:

Extra pay. Free money.

Ha ha

ROFL

You are kidding ...........aren't you?