Employer pension contributions %

RE: Employer pension contributions %

Rob Loxley — Fri, 05 Feb 2021 08:26:53 GMT

[quote userid="11590" url="~/001/nonclinical/f/life-in-practice-discussions/29640/employer-pension-contributions"]seems to contribute the minimum 3%[/quote]

Be aware that contributions are based on earnings between £6,240 and £50,000 per year, not on your total salary. Anyway, a common rule of thumb is save, as a %, half your age at which you start your pension - ie 15% for a 30 year old. So I'd be topping up beyond the workplace minimum, making use of pension tax reliefs etc

RE: Employer pension contributions %

Julian Earl — Mon, 01 Feb 2021 16:50:36 GMT

[quote userid="6550" url="~/001/nonclinical/f/life-in-practice-discussions/29640/employer-pension-contributions/228254#228254"]A good independent financial advisor is only good if you have money to put away! By the time you have paid for their advice per hour it is likely they will not be worth their weight in anything unless you have a good size pot for them to play with.[/quote]

I can respond to that with a sincere recommendation:

Financial planning firm in Sale, Manchester | Suttons (suttonsifa.co.uk)

I have used Suttons my entire career and I find them reliable, honest and trustworthy. The chap I started with was Michael Moore, still associated with Suttons but retired and in the background. Thanks to Nichael et al, I was able to retire early after my accident in 2012 and now live on a healthy pension from Standard Life, via Surttons. The two chaps in charge are Martin Roberts and Harvey Sutton both of whom I am more than happy to deal with. Tell them Irecommended them if you feel appropriate. Good luck with this...

RE: Employer pension contributions %

Clive Ansell — Mon, 01 Feb 2021 13:08:36 GMT

[quote userid="3169" url="~/001/nonclinical/f/life-in-practice-discussions/29640/employer-pension-contributions/228241#228241"]I don't think it is coincidence that the government has brought in compulsory workplace pensions. Has to be part of a bigger plan?[/quote]

There needs to be a sensible and honest debate about provision for retirement, and the states role in that.

There is a growing, in real numbers and percentage, of elderly retired folk, more of whom are living longer than before. Fewer working people, and relatively more in low paid jobs, not only paying little or no tax, but needing state handouts to live. who's going to pay?

RE: Employer pension contributions %

Clive Ansell — Mon, 01 Feb 2021 13:03:21 GMT

[quote userid="2457" url="~/001/nonclinical/f/life-in-practice-discussions/29640/employer-pension-contributions/228251#228251"]As Clive has said, getting a pension is not as important as getting the right pension - a good independent financial advisor is worth their weight in gold![/quote]

If could rewind 35 years I would have bought property in the 80's, then let it out to buy further properties. Would have beat any pension fund hands down.

RE: Employer pension contributions %

Clive Ansell — Mon, 01 Feb 2021 13:01:22 GMT

[quote userid="6550" url="~/001/nonclinical/f/life-in-practice-discussions/29640/employer-pension-contributions/228254#228254"]If you have debts you are better off clearing those unless the interest rates are very low.[/quote]

They are very low, as low as zero in some cases. I know many people that seem to survive day to day on 0% credit cards - I've got 2, which add up to around £20k of free credit - just keep up monthly payments and be sure their paid off within the 2 years.

Going back to pension's, it must be hard for the younger folk to get started. I was talking with a newish grad recently who had £90k of student debt, her partner had about £60, trying to save a deposit to buy their first home, bogged down with general living costs. She didn't think she would ever clear her debts. Folk of my era were very lucky I guess. Feels like their snookered before they even start.

RE: Employer pension contributions %

Bob Russell — Mon, 01 Feb 2021 12:38:54 GMT

A good independent financial advisor is only good if you have money to put away! By the time you have paid for their advice per hour it is likely they will not be worth their weight in anything unless you have a good size pot for them to play with.

The point of having a workplace pension is the pot is large therefore some higher risks and fees can work.

If you have debts you are better off clearing those unless the interest rates are very low.

RE: Employer pension contributions %

Gillian Mostyn — Mon, 01 Feb 2021 11:00:23 GMT

[quote userid="5012" url="~/001/nonclinical/f/life-in-practice-discussions/29640/employer-pension-contributions/228239#228239"]I wonder, actually, if it is worth having a pension at all unless it is very large? My Mother has 4 pensions including very good NHS and MMB ones. She is financially comfortable in her 80's, but some of her friends with little or no pensions seem to have as much disposable income - nanny state steps in and picks up the tab - whether that can or should continue, who knows? [/quote]

It won't - it is unaffordable.Too many old folk these days to be financially viable. I suspect that one day there will be just be a benefits system that just includes the elderly, not a specific pension one.

As Clive has said, getting a pension is not as important as getting the right pension - a good independent financial advisor is worth their weight in gold!

RE: Employer pension contributions %

Michael Woodhouse — Sun, 31 Jan 2021 18:49:50 GMT

[quote userid="5012" url="~/001/nonclinical/f/life-in-practice-discussions/29640/employer-pension-contributions/228239#228239"] nanny state steps in and picks up the tab - whether that can or should continue, who knows? [/quote]

I don't think it is coincidence that the government has brought in compulsory workplace pensions. Has to be part of a bigger plan?

I don't think £134.25 per week goes that far, really. It's under £7,000 take home per year. (remember that the vets on £30-40K think they are badly underpaid)

RE: Employer pension contributions %

Neil Wheadon — Sun, 31 Jan 2021 18:41:05 GMT

[quote userid="5012" url="~/001/nonclinical/f/life-in-practice-discussions/29640/employer-pension-contributions/228239#228239"]nanny state steps in and picks up the tab[/quote]

Slightly contentious but true

I was caught by a government pension adviser in Morrisons 20 years ago

'If you are unemployed do you get years counted to your State Pension'

Lady

'Yes'

'Who's the mug'

Lady

'You are'

Neil

RE: Employer pension contributions %

Clive Ansell — Sun, 31 Jan 2021 18:36:50 GMT

[quote userid="8958" url="~/001/nonclinical/f/life-in-practice-discussions/29640/employer-pension-contributions/228209#228209"]So I repeat, get a pension, don't listen to the doom merchants, put something away every month because it does grow and you won't notice it leaving your salary[/quote]

Good advice, but I would say based on my experience of private pensions to read the small print and get good independent advice.

As I said, my 2 private pensions taken out the 1980's have not performed all that well - they've not lost money, but have been nowhere as profitable as I was lead to believe they would be. The sales BS would have had me believe that I could have retired early 50's with an income on par with Richard Branson

Also there are alternatives; property, stocks and shares etc. The carrot on the stick with private pensions is the ability to reclaim tax which is paid into the fund - downside is that when you take the money out it is taxable.

The biggest benefit I have had from a private pension is that I have saved money, which in all likely-hood I would have otherwise just spent . Just not sure a private pension is the best means of saving/investing.

I wonder, actually, if it is worth having a pension at all unless it is very large? My Mother has 4 pensions including very good NHS and MMB ones. She is financially comfortable in her 80's, but some of her friends with little or no pensions seem to have as much disposable income - nanny state steps in and picks up the tab - whether that can or should continue, who knows?

RE: Employer pension contributions %

Sarah Keir — Sun, 31 Jan 2021 11:40:01 GMT

I think the effect of inflation is hugely underestimated in how it affects savings. I'm under no illusions that my pension pot will be big enough on its own but sadly my dream from my 20's of buying into a partnership is very unlikely to happen so I'll need to rely on other investments such as property.

RE: Employer pension contributions %

Julian Earl — Sat, 30 Jan 2021 14:55:01 GMT

Might I humbly draw attention to my tangent on this subect " Savings"? Sort of

It is, Ibelieve a very, very important aspect! Thank you for your understanding.

RE: Employer pension contributions %

Neil Wheadon — Sat, 30 Jan 2021 13:00:20 GMT

[quote userid="6550" url="~/001/nonclinical/f/life-in-practice-discussions/29640/employer-pension-contributions/228204#228204"]Most of these schemes are little more than savings schemes and will limit pay rises as the employer contributions climb. Money trees are in short supply.[/quote]

I'm not going to discuss my personal pension pot on a public forum, but I've just done the maths out of interest

If I take the total amount and divide this by 29 years and then by 12, I get the amount that I would have put away every month to get to this figure

Bear in mind that I have taken no risks, I took out an AVIVA pension with very low management charges, going for medium risk investments.

The monthly amount that is there is FOUR times what I would have put in at the time, therefore it is far more than a savings scheme. Also bear in mind that I have very rarely been eligable for 40% tax relief. The Government adds 20%

So I repeat, get a pension, don't listen to the doom merchants, put something away every month because it does grow and you won't notice it leaving your salary AKA Student loan

Neil

RE: Employer pension contributions %

Michael Woodhouse — Sat, 30 Jan 2021 12:48:18 GMT

[quote userid="11590" url="~/001/nonclinical/f/life-in-practice-discussions/29640/employer-pension-contributions"]Are we allowed to discuss what is reasonable and the going rate for this? [/quote]

This may sound harsh, but as an employer I have done the bare minimum to comply with the legislation, and we contribute 3%, and I think the employee contributes 5% so 8% go in. I don't dare put other people's money at risk, so it's a very low risk, relatively low return pension. Agree with the suggestions that start early, and this is one way of making people do that.

I'm employed by my limited company but have opted out of the workplace pension - if that tells you anything. I'd comfortable with greater risk and potentially greater reward.

What I think I'm saying - is get good advice, but a few extra percent into a workplace pension isn't going to make the world of difference when you retire!

RE: Employer pension contributions %

Gillian Mostyn — Sat, 30 Jan 2021 10:07:57 GMT

[quote userid="6897" url="~/001/nonclinical/f/life-in-practice-discussions/29640/employer-pension-contributions/228197#228197"]But with interest and annuity rates where they are these days it will give you b*gger all back all when you start drawing on it.[/quote]

bugger

Oh well, it currently looks good on paper....time will tell I guess.

I have to say that our biggest gains have always been in property. Always buy, don't rent for any longer than necessary. Our rental properties already provide a good income.

RE: Employer pension contributions %

Bob Russell — Fri, 29 Jan 2021 18:41:57 GMT

It was suggested that my first pension would provide a lump sum at 55 and a fair but adequate life style. It will easily cover the running cost for my car, no lump sum, no income worth speaking about.

The returns are pathetic except for the people that set up and run the schemes. They have made a good living out of pensions until recently. Now many of them are getting the square root of bugger all as well.

Most of these schemes are little more than savings schemes and will limit pay rises as the employer contributions climb. Money trees are in short supply.

We will need to keep working in some form or other to survive. Running our house as a b&b is one option. Renting it out and living in Thailand was a plan. Grandchildren are likely to put the mockers on that one!

RE: Employer pension contributions %

Clive Ansell — Fri, 29 Jan 2021 17:24:17 GMT

[quote userid="6897" url="~/001/nonclinical/f/life-in-practice-discussions/29640/employer-pension-contributions/228197#228197"]I have a pathological hatred of pension firms...[/quote]

Me too.

I've paid into mine since the 1980's, although it was placed on hold during my time at university.

I withdrew my 25% tax free allowable amount a year ago for a house purchase. When I crunched all the numbers I discovered the money would have earnt as much in a standard savings account, despite being told that it had performed brilliantly etc etc. Seems like an elaborate legalised scam.

In 2008 during Labour's financial mess my (and many others too) pension fund lost £20k in a week, but despite this the head man still wallows in a £7million a year pay package.

The idea is great, but read the small print and consider other investment options.

RE: Employer pension contributions %

bob lehner — Fri, 29 Jan 2021 16:49:26 GMT

[quote userid="2457" url="~/001/nonclinical/f/life-in-practice-discussions/29640/employer-pension-contributions/228196#228196"]WILL end up being a lot.[/quote]

But with interest and annuity rates where they are these days it will give you b*gger all back all when you start drawing on it.

[quote userid="2457" url="~/001/nonclinical/f/life-in-practice-discussions/29640/employer-pension-contributions/228196#228196"]I started paying as much as I could afford right from my first wage packet. [/quote]

Me too - into a 'Gold Standard' pension company called Equitable Life. Guess what - they went belly-up some years later, leaving a phenomenal mess.... I have a pathological hatred of pension firms...

RE: Employer pension contributions %

Gillian Mostyn — Fri, 29 Jan 2021 15:54:17 GMT

[quote userid="8958" url="~/001/nonclinical/f/life-in-practice-discussions/29640/employer-pension-contributions/228190#228190"]Regardless though if any new graduate of person in their 30's is reading this. Start a pension and do it now.[/quote]

Or, even better, in their 20s....

We had a financial advisor give us all a lecture when I was in my final year - and it meant I started paying as much as I could afford right from my first wage packet. The thing is, it doesn't actually need to be that much...anything that is there for 40 years WILL end up being a lot. With pensions, it is all about how long the money is sitting there....trying to catch up later is impossible.

RE: Employer pension contributions %

Neil Wheadon — Fri, 29 Jan 2021 09:57:46 GMT

It depends on the employer. In the USA, it's all about the benefits (My best friend lives there)

3% is the minimum, one of the better government initiatives, but you need to match it. I guess you can discuss it, salary sacrifice comes to mind IVC do it.

Regardless though if any new graduate of person in their 30's is reading this. Start a pension and do it now. I did from very early contributing about 15% of earnings throughout my career. At 56, I now have that choice to stop whilst others need to carry on.

Neil