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New Pensions Law comes into effect today.
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Author:  Amnesia10 [ Mon Oct 01, 2012 5:47 pm ]
Post subject:  New Pensions Law comes into effect today.
Britons 'drifting towards pensions iceberg' as flagship Government scheme launches

http://www.telegraph.co.uk/news/uknews/ ... nches.html

Quote:
A study by the National Association of Pension Funds (NAPF) also found that a third of people work for a company that does not offer any form of pension at all.
The dire warning about Britain’s savings culture comes from the NAPF, which represents the pensions industry. It coincides with the launch of the Government’s so-called auto-enrolment scheme, which will see all workers automatically given a workplace pension.
The flagship scheme will be introduced by large companies with over 120,000 staff today, while the smallest firms have until 2018 to implement auto-enrolment.
Steve Webb, the Pensions Minister, believes that 11 million Britons will be eligible for a pension under the scheme, although they have the option to opt out.
Joanne Segars, the NAPF’s chief executive, urged people to “stick with” auto-enrolment or else risk poverty in their old age.

The problem is that for many who are low paid this will actually lower their incomes and make them poorer now and with no guarantee of any benefit in the years ahead when they retire. There is no cap on fees and even the government scheme looks expensive. So this looks like a nice earner for the pensions industry who will rake in millions in fees and small pension savers will find that their meagre savings are gobbled up in fees.
Author:  jonbwfc [ Mon Oct 01, 2012 7:33 pm ]
Post subject:  Re: New Pensions Law comes into effect today.
I can't agree with all of that. Yes, the low paid will be out of pocket now but the whole point is they will end up having something at the point of their retirement. It may not be much, but it won't be nothing. And, of course, if you really desperately need the fiver a month it works out to be for someone on the minimum wage, you can opt out at any point (although I'm not sure if you can opt back in again at a later date). This is a good idea at some level. It'd be better if the scheme was somehow insulated from the vagaries of the stock market and the hyperactive chimps who inhabit it but it's better than feck all, which is what most of the people it matters to would have had otherwise.

The thing that... irked me (this may surprise you) is the attitude of the employers who will also be forced to contribute. There was a guy on the radio this afternoon who was complaining it was going to cost some small businesses 'upwards of two thousand pounds a year' and devastate the SOHO sector.

OK, firstly, you've had a year's warning it was going to happen already. And it's being pushed from the big companies down to the small ones gradually, so the type of business he was talking about won't have to implement it until 2018. And secondly, if a 2K yearly bill you get six years notice about is going to send your business down the swanee, you're a pretty sodding poor businessman anyway.
Author:  Linux_User [ Tue Oct 02, 2012 12:47 am ]
Post subject:  Re: New Pensions Law comes into effect today.
Not only do you have to opt-out, but you will be automatically enrolled every few years and must opt out each time.

On the whole I think it's probably a good idea, though it remains to be seen whether the schemes set up by employers will actually be any good (not to mention the government's NEST scheme).

As things stand I am currently 43 years away from state pension age and have just recently started paying into my workplace pension scheme and also a private pension. I still don't anticipate being particularly comfortable in retirement, assuming there's even such a thing as retirement in 2055.
Author:  Amnesia10 [ Tue Oct 02, 2012 2:44 am ]
Post subject:  Re: New Pensions Law comes into effect today.
I suspect that retirement ages will rise inevitably so the rich do not have to subsidise our very short retirement.

Whilst I have no objection in principle to a pension savings system, in the long run it is essential I do think that there need to be changes. First the dependence on a stock market investment when the FTSE has gone nowhere over the last decade. So not only would your investment be put into a volatile investment that has not appreciated in the last decade they sting you for annual fees. So you could have less than you paid in. I do see merits in an ISA pension where the employer contributes but cannot be withdrawn as easily. Though that would require us to be in a normal interest rate environment. That will at least be free to manage and will only fall in value because of inflation.
Author:  l3v1ck [ Tue Oct 02, 2012 7:39 am ]
Post subject:  Re: New Pensions Law comes into effect today.
I blame Brown and is dividend tax grab for our pension crisis. Final salery schemes were doing fine until he did that.
Author:  Amnesia10 [ Tue Oct 02, 2012 10:42 am ]
Post subject:  New Pensions Law comes into effect today.
Maggie started the pensions tax grab with caps on surpluses.


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Author:  tombolt [ Tue Oct 02, 2012 10:57 am ]
Post subject:  New Pensions Law comes into effect today.
Well Gordon really ran with it!
Author:  HeatherKay [ Tue Oct 02, 2012 11:31 am ]
Post subject:  Re: New Pensions Law comes into effect today.
What annoys me about this whole pensions thing is how much of a scam it all is.

I paid into various pension schemes over the years. I've paid in way more than I'll ever get back. I'd have been better off paying the same amounts into a savings scheme.

I read somewhere the other day you'd need a pension pot of around £150,000 to get anything like the basic state pension of £105 per week. No-one working at a supermarket will ever be able to save that amount on their salaries, let alone those who are long-term unemployed.

On hearing the news yesterday, my first thought was I wonder how long the state pension will be around. If the government can get everyone to pay into pension schemes, then eventually the state pension could be disbanded altogether.

Another nail in the coffin of the welfare state.
Author:  hifidelity2 [ Tue Oct 02, 2012 1:54 pm ]
Post subject:  Re: New Pensions Law comes into effect today.
Amnesia10 wrote:
I suspect that retirement ages will rise inevitably so the rich do not have to subsidise our very short retirement.


It will rise becuase we are all living longer and it should have been raised since the 50's or earlier
Author:  JJW009 [ Tue Oct 02, 2012 2:38 pm ]
Post subject:  Re: New Pensions Law comes into effect today.
hifidelity2 wrote:
Amnesia10 wrote:
I suspect that retirement ages will rise inevitably so the rich do not have to subsidise our very short retirement.


It will rise becuase we are all living longer and it should have been raised since the 50's or earlier

Indeed.

The very concept of paid retirement is a curious one. I believe the average duration of a state-paid pension was only a year or so when it was first conceived, because most people worked until they were dead or very nearly.
Author:  Amnesia10 [ Tue Oct 02, 2012 3:10 pm ]
Post subject:  New Pensions Law comes into effect today.
Yes the retirement age should be raised. As mentioned the process should have started years ago. Though I suspect that many will have serious health problems long before they actually retire.


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Author:  davrosG5 [ Tue Oct 02, 2012 4:08 pm ]
Post subject:  Re: New Pensions Law comes into effect today.
While I'm not against the principle of the scheme I am concerned that it will be used to weaken existing schemes that are better than the now madated state minimum. I can see exisiting schemes becoming closed to new members then being transfered wholesale over to the state minimum scheme once enough people have been put in the basic scheme. Same way a lot of companies stopped people joining final salary schemes.
Author:  Amnesia10 [ Tue Oct 02, 2012 5:30 pm ]
Post subject:  Re: New Pensions Law comes into effect today.
HeatherKay wrote:
What annoys me about this whole pensions thing is how much of a scam it all is.

I paid into various pension schemes over the years. I've paid in way more than I'll ever get back. I'd have been better off paying the same amounts into a savings scheme.

I read somewhere the other day you'd need a pension pot of around £150,000 to get anything like the basic state pension of £105 per week. No-one working at a supermarket will ever be able to save that amount on their salaries, let alone those who are long-term unemployed.

On hearing the news yesterday, my first thought was I wonder how long the state pension will be around. If the government can get everyone to pay into pension schemes, then eventually the state pension could be disbanded altogether.

Another nail in the coffin of the welfare state.

I saw an interesting article last year about ISA pensions. You save like any other pension but put the money into an ISA. It will not cost anything to run apart from the pension wrapper, and because there are no risks of shares going down it would have actually outperformed many traditional share based pension schemes over the last decade.
Author:  hifidelity2 [ Wed Oct 03, 2012 9:32 am ]
Post subject:  Re: New Pensions Law comes into effect today.
davrosG5 wrote:
While I'm not against the principle of the scheme I am concerned that it will be used to weaken existing schemes that are better than the now madated state minimum. I can see exisiting schemes becoming closed to new members then being transfered wholesale over to the state minimum scheme once enough people have been put in the basic scheme. Same way a lot of companies stopped people joining final salary schemes.

That is a risk although once it gets to the maximum payments then it will not be that different to many company schemes

Also (although most people dont) you should look at your total package - I am willing to take a slightly lower wage for a better pension and one reason I took this job over others was the good pension
Author:  bobbdobbs [ Wed Oct 03, 2012 10:35 am ]
Post subject:  Re: New Pensions Law comes into effect today.
Considering the demographic timebomb whereby there are more and more older people recieving a pension and less and less young people actually paying the taxes that support the pension system any way to help people supplement the state pension should be applauded.
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