Compulsory Company Pension Schemes

Majestic 12

As the title says. My company is starting up their company stakeholder scheme in July. I have already collected 3 company pensions from previous employment, all of which will be virtually worthless come retirement. I do not want another one. Why am I not given the choice of having the money invested in ISAs or similar (all poor returns, but I am led to believe that pensions/annuities are not better and if I snuff it the annuity becomes forfeit, seems unfair).
I have asked to opt out, as I do not wish to see my already low wages reduced by compulsory deductions. Are there any experts on the forum that can advise?

Thank you in advance.

nathancom

You get tax allowance and your company will generally contribute as well. If you can afford to make the contributions you are not realistically going to get more for your money via another investment unless you strike it lucky buying into the next bitcoin/Facebook/another extremely unlikely scenario. You can transfer previous pensions into your new pension I believe though I am sure someone with more experience than me with pensions will be able to give you more detailed advice.

freezing77

In the last budget the requirement to buy an annuity was stopped.

Chancellor George Osborne has rocked the annuities market to its foundation by stripping away all caps and limits on drawdown in today’s (19 March) Budget.

Mr Osborne said: “Pensioners will have complete freedom to draw down as much or as little of their pension pot as they want, anytime they want.

“No caps. No drawdown limits. Let me be clear: no one will have to buy an annuity.”

kajjal

It is a useful investment if you work it out as the contributions come out of your income before tax and your employer also contributes. This is especially true now with the removal of the compulsion to buy an annuity. Work out what you need / want from a retirement income and see what your options are. If you are younger pension contributions now really give a good return. On low wages it is more difficult to find the funds to contribute to a pension but see what the minimum you can contribute is.

Mikey23

I have loads of letters from the the provider my company uses for its stakeholder pension scheme urging me to join. I am tired of telling them that I'm over 60 and have a perfectly adequate civil service pension thank you very much

Majestic 12

Cheers for replies. I may look at transfer values of others to put into one big pot. Still think its a bit stiff that its compulsory. Whatever happened to democracy and ones right to choose. Anyone would be given to think we are living in the USSR.

bikes`n`guns

You`d be better off buying Rolex watches and hiding them under the floorboards

freezing77

Majestic 12 wrote:

Cheers for replies. I may look at transfer values of others to put into one big pot. Still think its a bit stiff that its compulsory. Whatever happened to democracy and ones right to choose. Anyone would be given to think we are living in the USSR.

It is compulsory for the employer not for the employee. You can opt out.

https://www.gov.uk/workplace-pensions/if-you-want-to-leave-your-workplace-pension-scheme

Majestic 12

freezing77 wrote:

Majestic 12 wrote:

Cheers for replies. I may look at transfer values of others to put into one big pot. Still think its a bit stiff that its compulsory. Whatever happened to democracy and ones right to choose. Anyone would be given to think we are living in the USSR.

It is compulsory for the employer not for the employee. You can opt out.

https://www.gov.uk/workplace-pensions/if-you-want-to-leave-your-workplace-pension-scheme

Thanks for the link.
As someone has already stated, better to invest in Rolex watches. Funny it should be mentioned. I know of someone that has a stash of high end watches in a strong box in their attic. I have only seen it once but their is def a Rolex, Omega and Phillipe Patek in collection.

pinno

Majestic 12 wrote:

freezing77 wrote:

Majestic 12 wrote:

Cheers for replies. I may look at transfer values of others to put into one big pot. Still think its a bit stiff that its compulsory. Whatever happened to democracy and ones right to choose. Anyone would be given to think we are living in the USSR.

It is compulsory for the employer not for the employee. You can opt out.

https://www.gov.uk/workplace-pensions/if-you-want-to-leave-your-workplace-pension-scheme

Thanks for the link.
As someone has already stated, better to invest in Rolex watches. Funny it should be mentioned. I know of someone that has a stash of high end watches in a strong box in their attic. I have only seen it once but their is def a Rolex, Omega and Phillipe Patek in collection.

I very much hope they aren't fakes.

orraloon

Majestic 12 wrote:

I know of someone that has a stash of high end watches in a strong box in their attic. I have only seen it once but their is def a Rolex, Omega and Phillipe Patek in collection.

In the attic, you say. What's the postcode there again?

plowmar

Not very helpful to the OP is it, as he says he cannot pay for a pension from his pay, how is he to be able to afford a high end watch. With their expensive services - my tag heur will cost in the region of £100 when the battery runs out and gets replaced with a full strip down and clean.

Today's Q S will give more details re pension combination I've been told. As others have implied if you can do a small amount do so the tax benefits and employer contributions are so much in your favour in the long term. You will also get an annual 'invite' to start a pension so it isn't a one and only decision.

pinno

Pensions are a mess because the rising cost of living seems to be exponential.

drlodge

Majestic 12 wrote:

I have already collected 3 company pensions from previous employment, all of which will be virtually worthless come retirement.

Why will they be "virtually worthless"???

bikes`n`guns

plowmar wrote:

Not very helpful to the OP is it, as he says he cannot pay for a pension from his pay, how is he to be able to afford a high end watch. With their expensive services - my tag heur will cost in the region of £100 when the battery runs out and gets replaced with a full strip down and clean.

Today's Q S will give more details re pension combination I've been told. As others have implied if you can do a small amount do so the tax benefits and employer contributions are so much in your favour in the long term. You will also get an annual 'invite' to start a pension so it isn't a one and only decision.

A Tag with a Battery is not really a high end watch though.

If you look around, you will find Jewellers who will sell you high end watches on interest free credit, so spreading the cost, and far better than standard investments.

The Mechanic

I think the OP is talking about auto enrollment (not the same as "stakeholder"). It is a bit of a dilemma for employers as well. My company didn't have a company scheme but gave each employee a sum to put in their own scheme. Under the new rules, if a person opts out, the company cannot make such payments as it is seen to be an inducement to opt out.

plowmar

I was only saying that there are extra ongoing costs to watch ownership and if these are affordable plus the credit repayments then I still think the additional benefits re co. pension far outweigh the increase in value of a watch which is paid out of taxed income.

From experience interest free credit is not going to extend past five years so that your rolex's etc -good one from jewellers . 40/50% mark up are going to be at least £5k - £100 per year? From original post it would seem that OP may not be able to afford that, or perhaps not willing to forego some of his existing pleasures to do so, new kit/bike ?