Workplace pension increase

[The binman chronicles]

Just been reading that the automatic workplace pension contributions are going up from 3% to 5% in April. This is apparently going to affect up to 10 million people who've been auto-enrolled in the past few years. They've worked out that the take home pay of someone earning £15,000 will typically be £49 lower, if they pay contributions on their entire salary and someone on £30,000 will take home £253 less (£21 per month).

The only saving grace is that the personal allowance is also going up in April which will help negate the above.

Just wondering what people's views are on this, good idea or bad? Anyone who falls into the above cheesed off that the government can keep on upping this lowering take home pay?

 

[mahermi1]

Just been reading that the automatic workplace pension contributions are going up from 3% to 5% in April. This is apparently going to affect up to 10 million people who've been auto-enrolled in the past few years. They've worked out that the take home pay of someone earning £15,000 will typically be £49 lower, if they pay contributions on their entire salary and someone on £30,000 will take home £253 less (£21 per month).

The only saving grace is that the personal allowance is also going up in April which will help negate the above.

Just wondering what people's views are on this, good idea or bad? Anyone who falls into the above cheesed off that the government can keep on upping this lowering take home pay?

Does that mean all employers have to match this ? Or has their contribution remained the same.

 

[roydo]

Just been reading that the automatic workplace pension contributions are going up from 3% to 5% in April. This is apparently going to affect up to 10 million people who've been auto-enrolled in the past few years. They've worked out that the take home pay of someone earning £15,000 will typically be £49 lower, if they pay contributions on their entire salary and someone on £30,000 will take home £253 less (£21 per month).

The only saving grace is that the personal allowance is also going up in April which will help negate the above.

Just wondering what people's views are on this, good idea or bad? Anyone who falls into the above cheesed off that the government can keep on upping this lowering take home pay?

Its not compulsory mate. And the company pays a share as well.

And before anyone starts "Scummy Tories" shouts, all this was put into motion by Labour, ages ago.

 

[roydo]

Does that mean all employers have to match this ? Or has their contribution remained the same.

IIRC, the employer matches the employee contribution, up to the prescribed minimum.

 

[The binman chronicles]

Its not compulsory mate. And the company pays a share as well.

And before anyone starts "Scummy Tories" shouts, all this was put into motion by Labour, ages ago.

Can you opt out and still pay the 3% or once you opt out you have to sort it out yourself with a private pension?

 

[roydo]

Can you opt out and still pay the 3% or once you opt out you have to sort it out yourself with a private pension?

Why would you opt out and still pay in?

edit. Or do you mean, can you opt out, then opt back in? If so, yes. In fact, every year or so, you will automatically be opted back in, unless you decide to opt out. Clear as mud isnt it?

 

[The binman chronicles]

Why would you opt out and still pay in?

edit. Or do you mean, can you opt out, then opt back in? If so, yes. In fact, every year or so, you will automatically be opted back in, unless you decide to opt out. Clear as mud isnt it?

Sort of thinking along the lines you were happy paying x amount in and getting the employer contributions, but if you weren't keen on paying the extras then you could remain on the lower percentage.

If the employer matches those increases it is a no brainer to stay in, but it is healthy whack a month extra.

 

[roydo]

Sort of thinking along the lines you were happy paying x amount in and getting the employer contributions, but if you weren't keen on paying the extras then you could remain on the lower percentage.

If the employer matches those increases it is a no brainer to stay in, but it is healthy whack a month extra.

I am reasonably sure that if you decide not to pay the new level, then that is in effect opting out, and so the employer contribution will stop as well.

So if you are now paying 3%, then 6% goes in. If you pay the new 5%, 10% will go in.

If you decide to pay only 3%, only 3% will go in.

In 30 years in the pension world, I never ever met a client who was annoyed they paid too much into their pension. That said, times aint easy.

Please dont take this as gospel. I jacked that world in a while back, so rules could well have changed, but your employer, or the insurance company running the scheme, will be bang up to date.

 

[mahermi1]

Its not compulsory mate. And the company pays a share as well.

And before anyone starts "Scummy Tories" shouts, all this was put into motion by Labour, ages ago.

So the Tories still brought it in then.

 

[roydo]

So the Tories still brought it in then.

Nah, been on the statute book for about 20 years. Maybe a bit less, but it was a Blair/Brown thing. Its not actually a bad idea, but as per, communicated poorly. Hence this thread I guess.

edit. Like the OP. Not unreasonably worried the take home pay will be down £30 a month or whatever. If they had been engaged/informed, (NOT their fault), the stance might have been, "Sound, an extra £60 in my pension each month".

It was all bought in by stealth by Brown, all so he was long gone when this stuff got bought up.

 

[The binman chronicles]

Does that mean all employers have to match this ? Or has their contribution remained the same.

Just been reading some more about it, the employers were paying 2% minimum on top of the 3% that employees were putting in and their minimum has been put up to 3%. So should be 8% going in if everything is at the lower end from now on.

 

[duncs pigeon]

No brainier to stay, try and help yourself as much as you can for the future.

 

[roydo]

Just been reading some more about it, the employers were paying 2% minimum on top of the 3% that employees were putting in and their minimum has been put up to 3%. So should be 8% going in if everything is at the lower end from now on.

Rings a faint bell that. But whatever the actual % is, if you pay the minimum, the employer pays sommet.

(Christ, I used to run seminars on this stuff. Hope to god no one took actual notes ffs)

 

[roydo]

No brainier to stay, try and help yourself as much as you can for the future.

Affordability aside, yep. And with the rule changes a few years ago, once you get to 55, a pension fund is kinda like a virtual bank account now. Deffo more use than they used to be anyrate.

looks at date. 52 weeks and 2 days to go

 

[duncs pigeon]

Affordability aside, yep. And with the rule changes a few years ago, once you get to 55, a pension fund is kinda like a virtual bank account now. Deffo more use than they used to be anyrate.

looks at date. 52 weeks and 2 days to go

Sure is mate. Crystallised mine and did the drawdown, been a godsend. Pay the maximum you can into a workplace pension, goes in before you are taxed on your gross income.