FabSwingers.com forum: So this new pension thing ...

By (user no longer on site) OP
over a year ago

... what exactly am I paying for ?

All I know is that I have 'x' amount less in my net pay than I had last month.

Am I now paying for my own state pension on a monthly basis or am I paying for some sort of booster pension that will pay me more than the state pension would be when I hit retirement age ?

I know I should really understand these things better but hey, we can't be up to speed on everything

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By *ranny-CrumpetWoman
over a year ago

The Town by The Cross

When you find out BUSSY , and you will, let me know please :=)

ooo ... I have a mussy

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By *HaRiFMan
over a year ago

Beyond the shadows.

Its a top up too your state pension.

Any way it's free money depending on how generous your employer is. Mine for example pays in 2000 for every 1000 I pay in.

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By *erbyDalesCplCouple
over a year ago

Derbyshire

Simple.

You are paying for the illusion that one day, in the future, you may be able be retire on a generous pension.

Eventually you will come to realise that the future is a moveable date, and the word 'generous' is a matter of opinion, not a defined figure....

I wouldn't worry about it.

Mr ddc

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By (user no longer on site)
over a year ago

Are you in a public sector pension scheme? If so it's the end of contracting out. You used to get a rebate on NI contributions because you weren't entitled to the second state pension (due to paying into a public sector scheme) - but now that there's the new flat state pension the rebate has ended.

So, you are paying more to not get any more. Sorry.

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By (user no longer on site)
over a year ago

Are you via umbrella ?

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By *icketysplitsWoman
over a year ago

Way over Yonder, that's where I'm bound

The little used PensionWise service might help.

Whatever we're paying it benefits current pensioners. They'll move the goal posts again before we draw our pensions Bussy.

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By *abioMan
over a year ago

Newcastle and Gateshead

"Are you in a public sector pension scheme? If so it's the end of contracting out. You used to get a rebate on NI contributions because you weren't entitled to the second state pension (due to paying into a public sector scheme) - but now that there's the new flat state pension the rebate has ended.

So, you are paying more to not get any more. Sorry. "

right with the 1st bit........ slight wrong with the second bit...

if you were "contracted out" you would have been playing an NI rate of 10.6% instead of 12%...... now that perk is now longer available....

actually with the new state pension each year under the new scheme is worth more in real pension money then was under the old system (and a lot more for those people who for example were low paid, self employed, and those women who stayed home to look after children....)

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By (user no longer on site)
over a year ago

So, you are paying more to not get any more. Sorry.

right with the 1st bit........ slight wrong with the second bit...

if you were "contracted out" you would have been playing an NI rate of 10.6% instead of 12%...... now that perk is now longer available....

I stand corrected, thanks Fabio. All I know is it's costing me about £50 extra a month in NICs for something where there is not a hope in hell of it still existing in any form when I'm 70.

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By *oodmessMan
over a year ago

yumsville

Before you start sticking the majority of your salary in, you want to know the return on the investment your employer will be putting your money into. If the expected return is shit - put your money into something else. Some employers will do the best and shop around for good pension schemes, others will just plump for the first they see and get 0.3% return or something. So you'll be putting £100 or £200 a month in when you could be better investing it privately. You should ask them for a portfolio or some kind of guide to their pension.

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By *oodmessMan
over a year ago

yumsville

That's my take on it anyway

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By (user no longer on site) OP
over a year ago

To clarify

I am in full time permanent employment and pay tax and NI thru normal PAYE deductions.

I earn a reasonable crust (above average, but below super duper)

This month I appear to have had NI deducted AND a pension deduction.

Knowing my employer, wherever they can, they will pay the minimum they can get away with.

All I know is I have £77 quid less going in the bank this month than I had last which is say my council tax or most of my weekly grocery bill or my car insurance or my utility bill

So, where has my £77 gone or what's it going to ?

That's the bit that is perplexing me.

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By *icketysplitsWoman
over a year ago

Way over Yonder, that's where I'm bound

[Removed by poster at 19/04/16 21:36:29]

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By *icketysplitsWoman
over a year ago

Way over Yonder, that's where I'm bound

You pay a minimum of 0.8% rising to 4% in 2018.

Your employer pays 1% of your qualifying earnings, rising to 3% in 2018.

The government pays tax relief at 0.2%, rising to 1% by 2018.

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By *abioMan
over a year ago

Newcastle and Gateshead

"To clarify

I am in full time permanent employment and pay tax and NI thru normal PAYE deductions.

I earn a reasonable crust (above average, but below super duper)

This month I appear to have had NI deducted AND a pension deduction.

Knowing my employer, wherever they can, they will pay the minimum they can get away with.

All I know is I have £77 quid less going in the bank this month than I had last which is say my council tax or most of my weekly grocery bill or my car insurance or my utility bill

So, where has my £77 gone or what's it going to ?

That's the bit that is perplexing me."

are you absolutely sure it is not your council tax... just because my council take council tax over 10 payments as opposed to 12... so i get march and april off...

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By *abioMan
over a year ago

Newcastle and Gateshead

"You pay a minimum of 0.8% rising to 4% in 2018.

Your employer pays 1% of your qualifying earnings, rising to 3% in 2018.

The government pays tax relief at 0.2%, rising to 1% by 2018.

that is going to be the big jump that i think is going to shock everyone in a workplace pension in oct 18......

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By (user no longer on site)
over a year ago

Basically, invest in something that is more predictable....

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By *icketysplitsWoman
over a year ago

Way over Yonder, that's where I'm bound

"You pay a minimum of 0.8% rising to 4% in 2018.

Your employer pays 1% of your qualifying earnings, rising to 3% in 2018.

The government pays tax relief at 0.2%, rising to 1% by 2018.

that is going to be the big jump that i think is going to shock everyone in a workplace pension in oct 18......"

My problem is that because I do some jobs on PAYE and most of my work is invoiced I'm going to have all these odd little amounts all over the place and I have no idea what they're invested in or how I access them.

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By (user no longer on site) OP
over a year ago

"You pay a minimum of 0.8% rising to 4% in 2018.

Your employer pays 1% of your qualifying earnings, rising to 3% in 2018.

The government pays tax relief at 0.2%, rising to 1% by 2018.

Towards what though ?

That's what I would like to understand

Is this the first step towards us being rid of state provided pensions ?

In other words, am I 'saving up' so I can have a pension of some sort when I retire rather than adding to a pension that the state provides ?

Apologies if I am being thick here

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By *icketysplitsWoman
over a year ago

Way over Yonder, that's where I'm bound

"You pay a minimum of 0.8% rising to 4% in 2018.

Your employer pays 1% of your qualifying earnings, rising to 3% in 2018.

The government pays tax relief at 0.2%, rising to 1% by 2018.

Towards what though ?

That's what I would like to understand

Is this the first step towards us being rid of state provided pensions ?

In other words, am I 'saving up' so I can have a pension of some sort when I retire rather than adding to a pension that the state provides ?

Apologies if I am being thick here

I think it is the beginning of the end of state pensions. The original rhetoric was that the state pension doesn't give you enough and the government needed to get people to start saving. This bit is supposed to be the non-state pension element.

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By (user no longer on site) OP
over a year ago

"To clarify

I am in full time permanent employment and pay tax and NI thru normal PAYE deductions.

I earn a reasonable crust (above average, but below super duper)

This month I appear to have had NI deducted AND a pension deduction.

Knowing my employer, wherever they can, they will pay the minimum they can get away with.

All I know is I have £77 quid less going in the bank this month than I had last which is say my council tax or most of my weekly grocery bill or my car insurance or my utility bill

So, where has my £77 gone or what's it going to ?

That's the bit that is perplexing me.

are you absolutely sure it is not your council tax... just because my council take council tax over 10 payments as opposed to 12... so i get march and april off..."

No, sorry Fabio, I meant the amount less in my wages is (roughly) equivalent to a months council tax for me

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By *abioMan
over a year ago

Newcastle and Gateshead

Towards what though ?

That's what I would like to understand

Is this the first step towards us being rid of state provided pensions ?

In other words, am I 'saving up' so I can have a pension of some sort when I retire rather than adding to a pension that the state provides ?

Apologies if I am being thick here

in effect what the government want people to have are in effect 2 pension pots.... 1 state pot and 1 private pot, because people were leaving it well into their late 30s/early 40's before they were thinking about pensions.....

obviously the earlier people start, the bigger pots are going to be, and the less reliant they will be on the state in later life....

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By *icketysplitsWoman
over a year ago

Way over Yonder, that's where I'm bound

Towards what though ?

That's what I would like to understand

Is this the first step towards us being rid of state provided pensions ?

In other words, am I 'saving up' so I can have a pension of some sort when I retire rather than adding to a pension that the state provides ?

Apologies if I am being thick here

obviously the earlier people start, the bigger pots are going to be, and the less reliant they will be on the state in later life...."

I started my pot in my early 20s. As I now start the approach to being able to draw on that pot (at 55 if need be) it's worth bugger all as a pension. It is a lump sum that's worth more if I die. The kids will benefit.

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By (user no longer on site)
over a year ago

If you have joined a pension scheme you will have been informed if it by your employer. You gave the right to opt out but I wouldn't recommend doing so. But the choice is yours. Go back through your papers there and work emails you will have been sent something.

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By *lik and PaulCouple
over a year ago

Flagrante

If you want to opt in to your companies pension scheme(in reality you are in unless you opt out) then it has to be a better bet because they have to also pay into it so it's free money.

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By *mmabluTV/TS
over a year ago

upton wirral

"Simple.

You are paying for the illusion that one day, in the future, you may be able be retire on a generous pension.

Eventually you will come to realise that the future is a moveable date, and the word 'generous' is a matter of opinion, not a defined figure....

I wouldn't worry about it.

Mr ddc"

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By *isa 59Woman
over a year ago

Newcastle

"... what exactly am I paying for ?

All I know is that I have 'x' amount less in my net pay than I had last month.

Am I now paying for my own state pension on a monthly basis or am I paying for some sort of booster pension that will pay me more than the state pension would be when I hit retirement age ?

I know I should really understand these things better but hey, we can't be up to speed on everything

I was gonna pm you about this but I'm outside your age range...lol. If you still don't quite get it then feel free to pm me.

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By (user no longer on site)
over a year ago

Let's face it we'll all be working till were 80

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By *icketysplitsWoman
over a year ago

Way over Yonder, that's where I'm bound

"Let's face it we'll all be working till were 80

I'm planning to die at 60 to avoid that.

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By *ax777Man
over a year ago

Not here

"To clarify

I am in full time permanent employment and pay tax and NI thru normal PAYE deductions.

I earn a reasonable crust (above average, but below super duper)

This month I appear to have had NI deducted AND a pension deduction.

Knowing my employer, wherever they can, they will pay the minimum they can get away with.

All I know is I have £77 quid less going in the bank this month than I had last which is say my council tax or most of my weekly grocery bill or my car insurance or my utility bill

So, where has my £77 gone or what's it going to ?

That's the bit that is perplexing me."

Was there a pension deduction in the previous month? If so, was the same amount in March?

How do the PAYE and NI payments in March compare to the payments in April?

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By *iforfun999Man
over a year ago

Haverfordwest

Every pay day, probably monthly, your employer pays an independent pension company an amount which will form your pension in the future, totally separate from the state pension.

The minimum percentage is set by the government and gradually increases each year for the next few years. I don't have the exact figures to hand, but the employee minimum is different to the employer's minimum.

The percentage you pay is based on 'qualifying pay', so that is what gets deducted from your pay. The employer sends that, plus an additional percentage as their contribution to the pension company. That amount has a small deduction as fees, but the government then add on their percentage to the funds.

So, your pension pot grows each month with your contribution, your employer's contribution and the government's contribution, minus a small fee from the pension company. It grows from there, according to how it is invested by the pension company,

There are three main pension companies which are recommended by the government, each having different features, but usually you can access the account data online for each, once started. Check with your employer which one they have chosen and their reasons. If you want to use another pension company, it could be possible to do so, if your employer is willing, especially if changing employer in the future .

It's law, it's unavoidable, but you can opt out, but it's free money from the government, so think carefully before opting out. It's a minimum percentage which is law, so your employer may be contributing more or you might be able to top it up with personal funds, depending on the pension company. The earlier the funds are in, the longer it has to increase in value, is the way I think of it.

I am not a financial advisor, I just did the research for my employer and while it was fresh in my mind, changed our start date to be next month, instead of August, as originally scheduled.

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By *inaTitzTV/TS
over a year ago

Titz Towers, North Notts

I'm a big believer in pensions, I've been boosting my private pension as I rather like the idea of enjoying my retirement

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