hi all, Ive just been auto enrolled into the workplace pension , my employer contributes the minimum of % 1.00, I contribute % 1.00 , and there is a management charge of % 0.5 annually, im mid 40s and earn approx 29 grand a year, …at my age and earnings, is it worth it ? should I opt out ? your opinions pls, thanks
roadcrew:
hi all, Ive just been auto enrolled into the workplace pension , my employer contributes the minimum of % 1.00, I contribute % 1.00 , and there is a management charge of % 0.5 annually, im mid 40s and earn approx 29 grand a year, …at my age and earnings, is it worth it ? should I opt out ? your opinions pls, thanks
What is the ratio if you contribute more? Do they match or is it fixed at half of one percent from them?
It’s a no-brainer really as it is in effect free money (OK, it’s only 290 quid a year but it’s free money all the same). I’d say take it unless there’s an option to choose higher contributions (matched by the employer), in which case take that instead.
James the cat:
roadcrew:
hi all, Ive just been auto enrolled into the workplace pension , my employer contributes the minimum of % 1.00, I contribute % 1.00 , and there is a management charge of % 0.5 annually, im mid 40s and earn approx 29 grand a year, …at my age and earnings, is it worth it ? should I opt out ? your opinions pls, thanksWhat is the ratio if you contribute more? Do they match or is it fixed at half of one percent from them?
He said it was 1% from the employer. 0.5% is the management charge by the pension company.
Id agree put in all you can, especially if matched by the company. As said its free money. Coming out of your payroll it`s invisible, so easier to part with. The more you can put into a pension earlier, is a better investment than putting it in later.
Roymondo:
James the cat:
roadcrew:
hi all, Ive just been auto enrolled into the workplace pension , my employer contributes the minimum of % 1.00, I contribute % 1.00 , and there is a management charge of % 0.5 annually, im mid 40s and earn approx 29 grand a year, …at my age and earnings, is it worth it ? should I opt out ? your opinions pls, thanksWhat is the ratio if you contribute more? Do they match or is it fixed at half of one percent from them?
He said it was 1% from the employer. 0.5% is the management charge by the pension company.
If your company contributions go up with increased employer contributions I would look at increasing if you can afford it. A company pension regardless is better than state
Roymondo If the company charges you the half a percent at gross itself and reduces the contribution in real terms to half of one nett annually that is very different to a contribution of 1 nett with a seperate half going to a management company as you would have aggregate interest on 1 percent year on year. The latter case is the better. You have to check the small print. Regardless it’s better than nothing.
Is this the auto enrollment pension that the government operate? My understanding is that whatever percentage you put in your employer must match up to a maximum of 4%. If you put in 10% they still only have to put 4% in.
James the cat:
Roymondo If the company charges you the half a percent at gross itself and reduces the contribution in real terms to half of one nett annually that is very different to a contribution of 1 nett with a seperate half going to a management company as you would have aggregate interest on 1 percent year on year. The latter case is the better. You have to check the small print. Regardless it’s better than nothing.
Where do you get this idea of 0.5% of salary going to the management company? The 0.5% management charge is levied on the pension pot (as that is what is being “managed” - the management company has no idea of what his salary is, only how much he (and his employer) are contributing).
After the first year his pension pot would stand at about £580 (assuming zero growth), so management fees would reduce it by the princely sum of £2.90, leaving about £577.
To achieve that £577 in his pension pot, his net pay would have been reduced by only £222 (due to tax relief on his contributions of £290). So he is £350 better off than he would otherwise have been.
I’m in a company pension paid in £72 so far company paid £90
I’m roughly paying £3 a week so less than a price of a pint
Roymondo:
Where do you get this idea of 0.5% of salary going to the management company?
from here
Roymondo:
0.5% is the management charge by the pension company.
James the cat:
Roymondo:
Where do you get this idea of 0.5% of salary going to the management company?from here
Roymondo:
0.5% is the management charge by the pension company.
Yes - the pension company charge 0.5% of what is in the pot.
“The Peoples Pension” is a typical scheme. This is what it says in their FAQ section:
What are my employees being charged?
Answer
We charge employees a low Annual Management Charge (AMC) of 0.5% of the fund value. This means that we charge them just 50p a year for every £100 they have invested.The AMC is reflected in the unit price of the fund they’re invested in, it’s not a standalone charge. This charge is to cover the costs associated with investing and administering their pension pots
fatboystu1:
Is this the auto enrollment pension that the government operate? My understanding is that whatever percentage you put in your employer must match up to a maximum of 4%. If you put in 10% they still only have to put 4% in.
I think it’s 3%, I pay in 4% my company pay 3% and they won’t go higher as I’ve asked the question, I’ve had a pension in every job (all 5 of them) since I was 18 yrs old and just wouldn’t do without one now, I don’t understand folks who think they can rely on the state pension for their retirement and some will have to wait till late 60’s to get that.
yes, it`s a flat rate charge on the whole pot of % 0.5, my employer will only contribute the minimum they have to, but the minimum contribution rates are set to increase in the next couple of years, I suppose its better than nothing
bald bloke:
fatboystu1:
Is this the auto enrollment pension that the government operate? My understanding is that whatever percentage you put in your employer must match up to a maximum of 4%. If you put in 10% they still only have to put 4% in.I think it’s 3%, I pay in 4% my company pay 3% and they won’t go higher as I’ve asked the question, I’ve had a pension in every job (all 5 of them) since I was 18 yrs old and just wouldn’t do without one now, I don’t understand folks who think they can rely on the state pension for their retirement and some will have to wait till late 60’s to get that.
For auto-enrollment, there is (as far as I know) no requirement for employers to match employee contributions to any particular level. There is a minimum level of contributions (currently 2% of pay), of which the employer must pay at least 1%. This is due to change in 2018 to a minimum of 5% of pay, with employers paying at least 2%.
roadcrew:
yes, it`s a flat rate charge on the whole pot of % 0.5, my employer will only contribute the minimum they have to, but the minimum contribution rates are set to increase in the next couple of years, I suppose its better than nothing
It really is a no-brainer. Your employer is going to give you an additional 1% on your salary and the taxman is going to bung you a few quid as well.
This year it will be 2% one percent from each.
Next year is 5%, 3% from you and 2% from your employer.
Year after that will be 8%, 5% from you and 3% from your employer.
There is nothing to state that the employer must or should match your contributions. You can opt out but every 3 years you will be auto enrolled again and you have to opt out again. You can put in more if you choose to and you can opt to drop it back again. You must put in the minimum above and if you move jobs you will have to start over again. Most schemes will allow you to combine other pensions into one.
Just to rub it in, my wife pays in 3% and her employer pays in 7%. In those infamous lyrics - I hope she dies before I get old 
Honked:
This year it will be 2% one percent from each.Next year is 5%, 3% from you and 2% from your employer.
Year after that will be 8%, 5% from you and 3% from your employer.
Not quite correct - The total contributions in current and future years must meet the 2%, 5% and 8% minimums stated, and the employer contributions must meet the 1%, 2% and 3% figures quoted. But there are no minimum levels for employee contributions as long as the total figure is achieved. e.g The current minimum of 2% could be contributed entirely by the employer, and in future years all or part of the 5% and 8% totals can be contributed by the employer with part or none of it coming from the employee.
Thanks Raymondo, didn’t know that and I am glad I know now 
roadcrew:
hi all, Ive just been auto enrolled into the workplace pension , my employer contributes the minimum of % 1.00, I contribute % 1.00 , and there is a management charge of % 0.5 annually, im mid 40s and earn approx 29 grand a year, …at my age and earnings, is it worth it ? should I opt out ? your opinions pls, thanks
In your mid forties,retirement seems light years away,and pensions don’t seem too important.
Trust me,time passes very quickly the older you get 
Both your employer and the government are giving you money,bloody well take it