Workplace pensions – are you in?
Have you ever thought about how much you'll be able to enjoy life when you retire? Possibly not – after all, for many of us, the day when we draw our pensions is still a long way away.
Your later years can be the best of your life. You can take up new hobbies, spend more time with family and even indulge yourself with treats such as extra holidays. But it's a fact of life that to have a good time, you'll have to have enough money. And – no matter how old you are – the time to start thinking about that is NOW.
If you're young or perhaps raising a family, you'll have other things on your mind – nights out, clothes, trips away with mates or childcare for instance. But it really is worth saving at least a little money for the future, because the earlier you start, the more chance you will have of saving enough to have a better time in retirement.
Starting from 1 October, you may find your company will enrol you into a workplace pension scheme. It's all part of a plan to ensure we have enough cash to ensure our future financial security.
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Automatic enrolment into a workplace pension means that working people who are currently NOT in such a scheme, and who meet the qualifying criteria, will now be placed in one. Your employer will automatically enrol you – they do all the paper work while you sit back and watch the money build up.
The best news of all is that you actually get extra money. You pay in a bit of your salary and your employer pays in too. You'll also get some tax relief from the government. So it's actually helping you to fund your retirement.
It's a great idea. Of course, pensions can go down as well as up, but for more than 95 per cent of people the expected increase in income is greater than the cost of their contributions plus inflation. Most people will actually get far more than this – the majority of savers can expect to get back more than twice what they put in.
Why is everyone being so generous? That's simple. The UK is facing pensions pressure, so everyone needs to be encouraged to save to build their own future financial security. At the moment, only one in three workers in the private sector are contributing to a workplace pension. And, incredibly, 11 million people aren't putting away enough money to pay for the kind of retirement that they would like.
We're also all living longer. Obviously that's a good thing, but it means that it won't be unusual to be around until your 80s, 90s or even 100s. So the law is changing to encourage us all to save more for our retirement.
And you won't be alone. If your friends and family don't currently have workplace pensions and they qualify, they will almost certainly be enrolled too.
You can opt out if you like, but if you do so, you'll be missing out on an opportunity to help yourself and your retirement. Every time you put money into your workplace pension via Automatic Enrolment, it's invested for you.
If you were to start now, say when you're 35 years old, then the cash you've put in – even if it's just a small amount – could have been invested for 30 years by the time you decide to retire.
Also, it couldn't be easier. Your contributions are deducted automatically from each of your pay packets and your employer has to ensure that they're being invested in a workplace pension scheme that meets minimum government requirements.
You can stop paying in at any time if you feel you need to, but you won't get the employer contribution or the tax relief.
There aren't any complicated forms to fill in and to help you keep a track of your cash, your pension provider will let you know how your investments are performing every year.
Automatic enrolment will be introduced to largest companies first (starting from October 2012) and will then roll out to medium and small-sized companies over the next few years.
Comments
by Robnoxious
Sunday, September 23 2012, 11:34AM
“Yes the Labour party were committed to the rise in pension age. The question being, Would it have been implemented differently? Because on the face of it, this hasn't. If someone was taking money out of your pension pot like the lady posting on here, approx 6 years ,which is equating to £5,000-00 a year . That is £30,000-00 by my calculation, so i think all these women that it is affecting have a right to feel aggrieved that they have been discriminated against. If this was a company that was doing this or bankers, there would be an outcry. Daylight robbery. But i suppose if it doesn't affect you directly , why care about other people. One person retires, One person becomes employed, and hopefully off benefits, and yes before you say it, i know its not that simple. But this has got to implemented on a much fairer basis across the board,men included.in this. Because ultimately when this reaches its change for everyone in age eligibility for claiming your pension, the loses that have been forced on these people will be paying for it”
by Anti2Moaner
Sunday, September 23 2012, 10:24AM
“Perhaps if all the people in jobs where they are able to retire in their 50s were to work , and contribute to the NI fund, it wouldn't be necessary to raise the age so high or so fast, It's a shame those people who are blaming THIS government don't accept that the Labour party are also committed to raising the retirement age.”
by warren-lloyd
Sunday, September 23 2012, 10:20AM
“Fags and ale and big f'off TVs they can't afford.”
by Martha_Tydfil
Sunday, September 23 2012, 8:47AM
“THEIR money Warren, THEIR money.
Good grief.”
by warren-lloyd
Saturday, September 22 2012, 11:59AM
“Been in for years, but you can bet you'll have one or two local idiots yelling about people not needing o tell them what do with there money and be claiming poverty in retirement or before due to over use o beer and fags.”
by ghosts
Saturday, September 22 2012, 11:09AM
“Thanks Robnoxious for understanding my comments...if the changes had been more fairer across the board, say 2 years instead of my 6 years added then I wouldn't be so grumpy about it....but if we all just agree with the government and don't voice our opinion then just imagine how they would like us to live...thanks again...”
by Robnoxious
Friday, September 21 2012, 11:14AM
“stokieme- You might be missing the point that ghosts is trying to make. I don't think the rise in the pension age is the real issue she has. It is the way it has been implemented, and the fact that this particular age bracket, I think if you are currently approx 58-59 a certain group of these people are bearing the brunt for the years to be added on before you are able to draw your pension.For the sake of months where you would have been able to draw your pension at 60 , 4-5 years have been added on. There should have been a more gradual increase in years added on . As previously posted, a maximum as to years added on 2years for example. There are always going to be winners and losers in things like these. but surely in the cases like ghost , totally wrong, which i believe this issue was brought to attention to the M.Ps by various groups as to their concerns .The unfairness of it. I even brought it to the attention of my own M.P. I was under the impression at the time of this parliament was looking at this again so it was more fair across the board with a possible max years attached to it. But in reply, nothing has changed and they should hang their heads in shame. If anyone had found themselves in this very same situation they would not be happy how this has been implemented.”
by Robnoxious
Friday, September 21 2012, 10:07AM
“Good in theory, bad in practice. Just another example how working and saving does not pay. Because although we are living longer is not to say your quality of life or health will be that much better, and sooner or later they will be taking what ever money or assets you might have to pay for any care that you might require, be it at home or going into care of some description. So like muzzer57 points out, What is the point? You can't get to the level of money you can claim through benefits. As pensioners anyway you are already being targeted by this government , your living standards being eroded in various shapes and forms. We are all in it together, they say. We are, it's called the S * * *”
by Johntoe
Friday, September 21 2012, 10:04AM
“Well, I will be 60 next year (June) I left school at 15 in 1968, I have worked for the vast majority of those years, But almost always in low paid factory jobs, and then there was the 'black decades' of the 80s and 90s (most of my 30s and 40s) when I should have been planning my future, but instead went from redundancy to dole and back to redundancy again,
I think my longest period of employment in the 80s and early 90s without being made redundant was 3 years (thats in the 19 years from 1980 to 1999) my longest period out of work was 2 1/2 years, Thanks Thatcher,
So I could never afford to 'put something away' for a pension, in fact, I remember hearing some MP on TV saying that it would be pointless for anyone over 40 in a low paid job, (I was both at the time) to start putting a bit aside for a pension, and that they would actually be in a far better position if they just went for a state pension,
So, it's a 'state' jobbie for me,
I am currently self employed anyway, and health allowing, have NO intention of stopping work in 5 years time,”
by spudder56
Friday, September 21 2012, 9:35AM
“by muzzer57Friday, September 21 2012, 8:46AM
"My advice is stay away from pension schemes, if you have one you get no help in your old age.
If you have a basic state pension then you can claim for everything.
If you have worked hard, have a pension and own your own home you will get nothing whereas someone who has never worked will continue to be looked after by the State until the day they die."
Its morally wrong but alas you are 100% Correct in what you say Pensions are a con and if you have the misfortune to work hard and own your own house you will get nothing just like me as I say morally wrong but morals dont pay bills so sad but true”