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gonnabuildabuggy

Boring topic - Pensions

Just been doing some comparisons between Mrs. GBB's pension (career average as a teacher) and my own.

Quite scary, hers is excellent despite having worked part time for a large number of years, mine fine whilst final salary and poor since then.

Had I still been in a final salary scheme then it would be a different picture but as far as I can see those were closed many years ago.

So....any private sector employees here still on a final salary scheme?

If I compare my old final salary scheme benefits to a money purchase scheme then it's not even close to comparable in the present low interest climate.

e.g. On a 1/60's scheme with a salary of £60K then each year's service is worth £1,000 (contributions were 6% but that's irrelevant). On a contributions scheme then even at 10% per year (£6000) then it's likely to net you £500 if you are very, very lucky....I guess I'm missing the benefits of compound interest on your £6K but it's basically half the outcome for twice the investment.
cbeaks1

I'm 18 years into 1/52ths final salary and have been doing AVC's for about 5 years.

I realise that I am very lucky.
Frank Bullitt

Any public sector employees on a final salary scheme?

Not me, CARE since April 2015 which is aligned to my state pension age (67 and 122 days) although everything pre 2015 is protected.

Should I retire at 67 and 122 days my pension is excellent but I doubt I'll be working full time 'till then, but I might chose not to withdraw it until my mid 60's.

It may well change again...
Chris M Wanted a V-10

Last Christmas I transferred all but 1 of my small pensions from former employers into one pot.... total just over £100k, and I have around £30k in the final salary linked scheme that I did not transfer with all the others.   Goodness knows what sort of pension I shall end up with (but I doubt that it will be very much), current employer does not yet have a scheme and I have less than 10 years to go until I hit the "new" 66 year old nominal retirement age.  Wife was hit very badly, about 18 months before we thought she would be retiring, good old HMG increased her retirement age by 6 years in one huge leap; no phased-in increase as we had been led to believe previously
Stuntman

At least the relatively new pension freedoms mean that you don't have to buy an annuity with your money purchase pot if you don't want to.  You can take as much as you want in cash at any time, although some or all of it may be subject to tax at your marginal rate in the year you take it.  There is a lot of flexibility if you are able and willing to embrace some risk in terms of timing when you turn more risky pension investments into risk free cash.

I suspect I will end up drawing down my SIPP and using it to supplement my relatively small frozen final salary pensions from 3 previous employers, and the state pension which currently I will receive when I'm 67.
Bryan M

I have 8 years banked at final salary, we then moved onto career average blocks for the last 8 years and they are reviewing the scheme again in 2018, so I anticipate it will get worse again but much better than purchase scheme.
Big Blue

I've got about 4 pots of fuck all, including one FS. I've been fortunate thus far with investments and got lucky this year with one that has gone up by 150% in three months meaning I have less guilt about spunking a load of cash on the Gorilla earlier this year.  That investment is in my ISA so it's all mine. Which tells you what I think of pension funds.
Tim

I've just transferred my original 2 pots of fuck all into my current work scheme.
No FS anywhere in sight though.

I think in the past pensions have been pot luck, I remember speaking to a mate when we were about 30 (a long time ago!) and he had £50k in his scheme because his employer - Shell - had been putting the max in for the past 10 years or so, he hadn't even contributed. I reckon I had £1k at that point all paid by me!
Bob Sacamano

I've got a mixture of final salary when I was younger, a money purchase through work, and a SIPP. I still reckon I'll need a part-time job in B&Q - one of those nice orange aprons with "My name's Bob, how can I help" on, advising people on the right fixings to mount their flat screen TV on the wall.

Mrs Sacamano had a number of money purchase motor trade schemes that were underfunded so we transferred those into a SIPP and a good friend advised her on some investments that are now returning 15% per annum for the next 5 years, so that's helping top it up quite nicely.
Twelfth Monkey

Let's hope he's still a good friend when the five years are up!

(Not being flippant here, you don't get that level of return without some degree of risk.  High (and declared in advance) headline rates of return always make me wary.)
Bob Sacamano

Twelfth Monkey wrote:
Let's hope he's still a good friend when the five years are up!

(Not being flippant here, you don't get that level of return without some degree of risk.  High (and declared in advance) headline rates of return always make me wary.)


Without a doubt, but I'm happy with medium risk on an asset-backed investment in Germany. So far the interest is being paid 6 monthly on the nose.
JohnC

Everything in my pot has been contributed by me. I have 2 SIPPS: one where the money is invested in funds and I basically pay money in monthly and leave it alone to do its own thing.

The other is a much smaller pot into which I pay lump sums when conditions allow and is something I dabble with and take a few educated chances on.

Pot No 1 has a growth rate of f* all and pot No2 has grown by over 50% in the last couple of years but I know I have been on the lucky side with some of my timing.

I don't have the nerve to use my "expertise" on the bigger pot but if it carries on like this for another 5 or 6 years there might not be so much of a difference between them.
Big Blue

I was the same with self-managed investment but when rates are on the floor what is there to lose? I'm lucky that I can have my account open on my iPad all day if the urgent need to change a position arises plus I do a look ahead trade plan on a Sunday night. I'm not going to give up the day job but it makes saving money less dull.
gonnabuildabuggy

Bob Sacamano wrote:
Twelfth Monkey wrote:
Let's hope he's still a good friend when the five years are up!

(Not being flippant here, you don't get that level of return without some degree of risk.  High (and declared in advance) headline rates of return always make me wary.)


Without a doubt, but I'm happy with medium risk on an asset-backed investment in Germany. So far the interest is being paid 6 monthly on the nose.


That was my thought too. Getting 5% return is getting difficult without a medium level of risk.

How does the £ devaluation affect you? Does it increase or decrease the return?
gonnabuildabuggy

Big Blue wrote:
I was the same with self-managed investment but when rates are on the floor what is there to lose? I'm lucky that I can have my account open on my iPad all day if the urgent need to change a position arises plus I do a look ahead trade plan on a Sunday night. I'm not going to give up the day job but it makes saving money less dull.


I'm pondering doing similar with a small pot I've got, as you say, if nothing else it makes life more interesting and if it decreases it's easier to blame your own decisions than your IFA.
Bob Sacamano

gonnabuildabuggy wrote:
Bob Sacamano wrote:
Twelfth Monkey wrote:
Let's hope he's still a good friend when the five years are up!

(Not being flippant here, you don't get that level of return without some degree of risk.  High (and declared in advance) headline rates of return always make me wary.)


Without a doubt, but I'm happy with medium risk on an asset-backed investment in Germany. So far the interest is being paid 6 monthly on the nose.


That was my thought too. Getting 5% return is getting difficult without a medium level of risk.


How does the £ devaluation affect you? Does it increase or decrease the return?


We were lucky as when we got in 18 months or so ago the offer was 15% a year. It then dropped to 13% and due to popularity it is now 9% for new subscribers. It's still attractive enough for our company FD to put some of our cash pile into it due to the current low returns on deposit from the bank. The return is a percentage of the original investment paid 6 monthly into the SIPP account and as such hasn't changed.

The guy who introduced us to it is a very old friend and, in fact, I'm godfather to his kids, so I trust the due diligence he's done in Germany. An ex-IFA, he became disillusioned with the whole system and the fees charged and decided to strike out on his own, offering alternative investments which he'd be happy to put his own money into.
Twelfth Monkey

I'm sure it'll all work out, but it's the return of capital that is the bigger risk in any scheme arranged on these lines - after five years at 15%, you are still down 25% until capital is repaid in full.  I take it the investment itself is unregulated (meaning it is not Regulated for sale in the UK).  This isn't a problem in itself, but when something goes wrong with such a scheme (and I really am not saying it will with yours), getting recompense ain't as easy.

EDIT: I typed 35%, not 25% first off - I'd take anything I say with a pinch of salt...


EDIT EDIT: Apart from this, which is aimed at all, not at Bob.  As a general rule of thumb, be wary.  What sounds too good to be true usually is.  Returns will tend to be commensurate to risk, so a high headline rate tends to mean (but doesn't always mean) that those operating the scheme have to offer such rates to attract money.  Borrowing from a bank would be cheaper, which begs the question 'why'.  If you are satisfied with the answers, or that someone you trust implicitly is, it's your call.  

Risk become apparent after the event.  I've seen things go wrong because they were not as described, because supposed 'security' was not there, because of legal failings, regulatory failings etc etc.  Investing in the UK isn't cheap, because the degree of regulation is heavy and consumer protection is very high in comparison with most of the world.  But nonetheless be wary.

And diversity is the single most important thing you can (and should) hold in your portfolio.  Even the highest risk portfolio I run (and the one I use myself) has fifteen separate investments in it, managed by twelve different companies and no single part exceeds ten per cent.  Lower risk portfolios ratchet the diversity up massively.

Aanyway, busman's holiday.  Back to insulting my fellow road user and sneering at awful numberplates...
Bob Sacamano

Twelfth Monkey wrote:
I'm sure it'll all work out, but it's the return of capital that is the bigger risk in any scheme arranged on these lines - after five years at 15%, you are still down 25% until capital is repaid in full.  I take it the investment itself is unregulated (meaning it is not Regulated for sale in the UK).  This isn't a problem in itself, but when something goes wrong with such a scheme (and I really am not saying it will with yours), getting recompense ain't as easy.

EDIT: I typed 35%, not 25% first off - I'd take anything I say with a pinch of salt...


Yes, it's unregulated, these are alternative investments; care homes, airport terminals here and abroad, property development etc. I would recommend a mix of investments (well actually I wouldn't recommend anything as I'm not an IFA) and as you say make sure that your initial capital can be recovered. An unrelated investment that a family member put money into did go tits up but there was more than enough asset cover to ensure she quickly got all her money back.
Racing Teatray

No, my pension has always been of the defined contribution variety. My employer matches up to 5% and then adds 3%. Given that constitutes 8% of my salary which I wouldn't otherwise receive, it's a no-brainer to forego 5% of my salary (which is anyway on a salary sacrifice basis and thus tax efficient) to get it, regardless of how it performs investment-wise. But I don't see the wisdom in putting more than 5% in myself. The rest is better off in ISAs as BB notes. Same for my wife.

On the investment front, I take a super-cautious approach. Leaving the family home aside, if it's a capital at risk product, then I'm out.
Stuntman

Contributions to a SIPP are still a good deal if you are a higher or top rate taxpayer, IMO.  You get tax relief at your marginal rate (so every £100 only costs you £60, or £55) and you get 25% of your total pot tax-free when you crystallise and withdraw the cash.  The rest is taxed as income in the year you take it, so if you are then a basic rate taxpayer, far less of it will be taxed.

This absolutely will not last for much longer, IMO.  They have already curtailed the annual allowance and the maximum value of total SIPP funds (neither of which was or is currently a big concern for me) but I'm sure that the Government will curtail the marginal rate of tax relief within the next few years.  The LISA (forthcoming Lifetime ISA product for the under 40s) is a clear indication of where things are going.

When this changes, I absolutely agree that ISAs are the better option.  In the meantime (when in work) I aim to contribute sums to both products.  I take a little more risk in the ISA than I do in the SIPP, but both have a fair degree of risk although I am well diversified both by geography and company size.

Generally speaking, I make a careful decision about where I invest new cash and then forget about it.  And I make sure I have an emergency cash buffer too, which has been called up recently as I've been out of work again.  My first priority is to rebuild that cash buffer.
Twelfth Monkey

I'd be genuinely surprised if tax relief beyond basic rate were to be curtailed in the foreseeable future.  The reaction was such that the proposal was dropped post haste when recently raised.

Re pension vs ISA, if it's saving specifically for retirement why would you opt for the latter unless access is an issue?  You can hold exactly the same things within them, it's just that the latter will cost you rather less.
gonnabuildabuggy

Twelfth Monkey wrote:
I'd be genuinely surprised if tax relief beyond basic rate were to be curtailed in the foreseeable future.  The reaction was such that the proposal was dropped post haste when recently raised.

Re pension vs ISA, if it's saving specifically for retirement why would you opt for the latter unless access is an issue?  You can hold exactly the same things within them, it's just that the latter will cost you rather less.


I share Stunts view. I think the relief amount will be set somewhere between the two bands as at present it benefits the rich far more than the poor.

Plenty of higher rate taxpayers I know are busy stuffing their pensions to the max to the detriment of salary (who wouldn't), now most of us are with 10 yrs of the 55yr old withdrawal age.
PG

gonnabuildabuggy wrote:
Twelfth Monkey wrote:
I'd be genuinely surprised if tax relief beyond basic rate were to be curtailed in the foreseeable future.  The reaction was such that the proposal was dropped post haste when recently raised.

Re pension vs ISA, if it's saving specifically for retirement why would you opt for the latter unless access is an issue?  You can hold exactly the same things within them, it's just that the latter will cost you rather less.


I share Stunts view. I think the relief amount will be set somewhere between the two bands as at present it benefits the rich far more than the poor.

Plenty of higher rate taxpayers I know are busy stuffing their pensions to the max to the detriment of salary (who wouldn't), now most of us are with 10 yrs of the 55yr old withdrawal age.


The government has already introduced a cap beyond which your £40k annual contributions limit is reduced. Now yes, that is at a high level now and catches 45% tax payers, but give it 20 years and that limit not being increased properly and that inevitably means that more people will be caught by this situation.

From the gov website:
Lower allowance for high incomes

You’ll have a lower annual allowance for the 2016 to 2017 tax year if both the following apply:

   your ‘threshold income’ is over £110,000 - this is your income excluding any pension contributions (unless they’re paid as a salary sacrifice by your employer)
   your ‘adjusted income’ is over £150,000 - this is your income added to any pension contributions you or your employer make

For every £2 your adjusted income goes over £150,000, your allowance drops by £1 (up to a maximum drop of £30,000).

This is known as the ‘tapered annual allowance’.
Twelfth Monkey

Obviously I'll hope you are both wrong, GBB!  It's worth bearing in mind that these restrictions came in in a fairly steady stream a few years ago, and that after a bit of a gap the higher-rate relief idea was set up and then swiftly abandoned.  I think the next five years are safe.  Scope for famous last words, here...
PG

Chris M Wanted a V-10 wrote:
....current employer does not yet have a scheme...


Chris, your employer has to have a scheme as from September this year, by law. Even if you have one employee, as from this September, they have to be enrolled in a scheme. NEST scheme has been set up for this purpose.

If your employer has not written to you about it, they are already breaking the new rules!

http://www.nestpensions.org.uk/sc...ublic/home/contents/homepage.html
gonnabuildabuggy

Twelfth Monkey wrote:
Obviously I'll hope you are both wrong, GBB!  It's worth bearing in mind that these restrictions came in in a fairly steady stream a few years ago, and that after a bit of a gap the higher-rate relief idea was set up and then swiftly abandoned.  I think the next five years are safe.  Scope for famous last words, here...


Scrapped just before an election or was it referendum IIRC?

The government need to encourage poorer folks to save and also increase tax take so I think the "simplification" (always good to have a reason) at something like 30% is very likely.
Twelfth Monkey

Just before the budget that was supposed to bring it in, so not politically time-sensitive.

I definitely don't think like I did when I was young and idealistic - I'm far more selfish.  Maybe this is an inevitability when you're thinking about being able to stop working and on a hell of a lot of tax paid over the years.  Personally, I reckon the poor get a pretty good deal in terms of incentive.  The very low of income get tax relief on pension contributions without actually paying tax, and now have the added carrot of the only genuinely free lunch I know of in the form of compulsory employer contributions to pensions.  If someone is going to turn that down (or simply cannot afford even a basic level of contribution), I certainly feel for them, but can't see how a little more tax relief will make any difference.

Regarding the tax take, a reduction from 40% to 30% on the maximum of £40k amounts to £4k in tax, but very few people get anywhere near that.  I have clients who do, but they are the sort who were making maximum contributions when the levels were a quarter of a million or so.  Back in the broadly real world, I put in more than half of the maximum last year, so a change from 40 to 30 would have added about £2,300 to my tax bill.  I'd just have put more in, or used some other tax-deductible means of drawing my income.  Though I suppose it's less straightforward for employees.
Racing Teatray

PG wrote:
gonnabuildabuggy wrote:
Twelfth Monkey wrote:
I'd be genuinely surprised if tax relief beyond basic rate were to be curtailed in the foreseeable future.  The reaction was such that the proposal was dropped post haste when recently raised.

Re pension vs ISA, if it's saving specifically for retirement why would you opt for the latter unless access is an issue?  You can hold exactly the same things within them, it's just that the latter will cost you rather less.


I share Stunts view. I think the relief amount will be set somewhere between the two bands as at present it benefits the rich far more than the poor.

Plenty of higher rate taxpayers I know are busy stuffing their pensions to the max to the detriment of salary (who wouldn't), now most of us are with 10 yrs of the 55yr old withdrawal age.


The government has already introduced a cap beyond which your £40k annual contributions limit is reduced. Now yes, that is at a high level now and catches 45% tax payers, but give it 20 years and that limit not being increased properly and that inevitably means that more people will be caught by this situation.

From the gov website:
Lower allowance for high incomes

You’ll have a lower annual allowance for the 2016 to 2017 tax year if both the following apply:

   your ‘threshold income’ is over £110,000 - this is your income excluding any pension contributions (unless they’re paid as a salary sacrifice by your employer)
   your ‘adjusted income’ is over £150,000 - this is your income added to any pension contributions you or your employer make

For every £2 your adjusted income goes over £150,000, your allowance drops by £1 (up to a maximum drop of £30,000).

This is known as the ‘tapered annual allowance’.


This is surely only a problem for very few people. It does technically affect me but my contributions would need to be several multiples of what they are now before it became an issue, and that isn't going to happen any time soon.
PG

Racing Teatray wrote:
This is surely only a problem for very few people.


True. But governments have a history of not increasing limits in line with earnings - just look at the fiscal drag on the % of people who pay higher rate tax over the years as an example.
JohnC

PG wrote:
Racing Teatray wrote:
This is surely only a problem for very few people.


True. But governments have a history of not increasing limits in line with earnings - just look at the fiscal drag on the % of people who pay higher rate tax over the years as an example.


Indeed!

I read somewhere that the higher rate tax band should start for earnings in excess of £75,000 if the bands from the early 80's had been updated by inflation. Currently the limit is set at c£43,000
Racing Teatray

Of course. The drop in tax take would be unaffordable. But in an country where the average wage is £26k or thereabouts, it would be politically difficult.

What of course should be the case is regional variation in tax bands based on affordability calculators. The higher level of salaries paid in London for example in no way match the higher level of expense incurred, yet taxation is the same.
Martin

Wouldn't that just increase the cost of living in London further?  (Assuming cost of housing is the main cost of living driver)
Big Blue

I think Racing means we pay LESS tax down south after living and housing costs are taken into consideration.
Frank Bullitt

Big Blue wrote:
I think Racing means we pay LESS tax down south after living and housing costs are taken into consideration.


That would make rents and house prices cheaper as everyone flocks there.
JohnC

Racing Teatray wrote:

What of course should be the case is regional variation in tax bands based on affordability calculators.


And in a region with a smaller number of higher rate tax payers than the UK average, the SNP want to put taxes up in Scotland. The strange thing is that a lot of higher rate taxpayers in Scotland are Doctors, Dentists, Education Professionals and local and National Govt employees. To keep these jobs attractive in a UK context, when higher tax rates apply in Scotland means having to increase the salaries to compensate. Who pays for that - the Government. So they have to put tax up a bit more to pay for it and so on......... Remind anyone of the dark days of the 70's?

Politicians should have to study history and also be permanently plugged in to a lie detector with a big flashing red light every time they push the boundaries of truth.
Twelfth Monkey

JohnC wrote:
Politicians should have to study history and also be permanently plugged in to a lie detector with a big flashing red light every time they push the boundaries of truth.


Just imagine the carbon emissions...
Racing Teatray

Frank Bullitt wrote:
Big Blue wrote:
I think Racing means we pay LESS tax down south after living and housing costs are taken into consideration.


That would make rents and house prices cheaper as everyone flocks there.


Yes, because the system is fucked. But there must be a way around the default left-wing position of simply saying "the rich must pay more tax" because unfortunately by "the rich", unpleasant Momentum types don't mean their current bête noir Branson and his ilk, to whom the difference between paying income tax at 45% or 50% is probably completely immaterial, but rather frankly anyone whose pay takes them into the 40% tax bracket.

There is zero recognition of the fact that you can feel comfortably well-off on a household income of say £100k in the Midlands but that the same income in London will leave you feeling that you are just managing to get by and quite unable to contemplate the notion of your taxes going up.
Bob Sacamano

Racing Teatray wrote:


There is zero recognition of the fact that you can feel comfortably well-off on a household income of say £100k in the Midlands but that the same income in London will leave you feeling that you are just managing to get by and quite unable to contemplate the notion of your taxes going up.


It's probably more down to the way we've managed to organise our country. In an ever shrinking, globally connected world, we live on a small island where people believe you have to live within 10 miles of London to get on.
Tim

It would be nice, albeit incredibly simplistic, if everyone could be taxed at a flat rate but then that tax was collected in full with no dubious moving of money offshore.

Was it Mitt Romney who got caught out in the Presidential race a few years back because his overall liability to tax came in at below the basic rate across there?

I'd like to see companies taxed on income earned in the markets they trade in and stop them using loans generated from low tax countries to reduce their liability.
They always make anguished noises if someone dares to suggest it but I'm sure they'd, somehow, find a way to continue trading  
Bob Sacamano

Tim wrote:
It would be nice, albeit incredibly simplistic, if everyone could be taxed at a flat rate but then that tax was collected in full with no dubious moving of money offshore.

Was it Mitt Romney who got caught out in the Presidential race a few years back because his overall liability to tax came in at below the basic rate across there?

I'd like to see companies taxed on income earned in the markets they trade in and stop them using loans generated from low tax countries to reduce their liability.
They always make anguished noises if someone dares to suggest it but I'm sure they'd, somehow, find a way to continue trading  


Tax them on a flat percentage of turnover in the market and let them make any case for rebates with HMRC after they've paid up.
Racing Teatray

Bob Sacamano wrote:
Racing Teatray wrote:


There is zero recognition of the fact that you can feel comfortably well-off on a household income of say £100k in the Midlands but that the same income in London will leave you feeling that you are just managing to get by and quite unable to contemplate the notion of your taxes going up.


It's probably more down to the way we've managed to organise our country. In an ever shrinking, globally connected world, we live on a small island where people believe you have to live within 10 miles of London to get on.


That is certainly true in many instances. Unfortunately international financial hubs exist for excellent reasons and London is one of the top international financial hubs. Until such time as face-to-face meetings and negotiations cease to be a frequent feature of the working lives of service professionals, my office has to be near our clients, our competitors and our various service providers, which as a lawyer specialising in the international debt capital markets accordingly means it needs to be in the international financial hub called London. And unless I fancy spending 3 or 4 hours a day on a train, that requires me to also live in London. And what holds true for me holds true for very many other people who live in London.

And it's not unique to the UK. In the US, I would need to be in New York, in Italy it would need to be Milan, in France it would need to be Paris, in Germany it would need to be Frankfurt etc etc etc.
Bob Sacamano

Racing Teatray wrote:
. Until such time as face-to-face meetings and negotiations cease to be a frequent feature of the working lives of service professionals, my office has to be near our clients, our competitors and our various service providers, which as a lawyer specialising in the international debt capital markets accordingly means it needs to be in the international financial hub called London. And unless I fancy spending 3 or 4 hours a day on a train, that requires me to also live in London. And what holds true for me holds true for very many other people who live in London.

And it's not unique to the UK. In the US, I would need to be in New York, in Italy it would need to be Milan, in France it would need to be Paris, in Germany it would need to be Frankfurt etc etc etc.


I know, it's like the whole internet revolution never happened and we don't have Skype, video conferencing, email, VR... 20th century thinking in a 21st century world.
You get the feeling if the auto industry had been run by the City of London they'd still be working on that faster horse.

I had a guy onto me the other day offering VR training software and his development team was in Kathmandhu, as he said; why do they need to be in London?
Tim

Bob Sacamano wrote:
Racing Teatray wrote:
. Until such time as face-to-face meetings and negotiations cease to be a frequent feature of the working lives of service professionals, my office has to be near our clients, our competitors and our various service providers, which as a lawyer specialising in the international debt capital markets accordingly means it needs to be in the international financial hub called London. And unless I fancy spending 3 or 4 hours a day on a train, that requires me to also live in London. And what holds true for me holds true for very many other people who live in London.

And it's not unique to the UK. In the US, I would need to be in New York, in Italy it would need to be Milan, in France it would need to be Paris, in Germany it would need to be Frankfurt etc etc etc.


I know, it's like the whole internet revolution never happened and we don't have Skype, video conferencing, email, VR... 20th century thinking in a 21st century world.
You get the feeling if the auto industry had been run by the City of London they'd still be working on that faster horse.

I had a guy onto me the other day offering VR training software and his development team was in Kathmandhu, as he said; why do they need to be in London?


My current experience of working in financial services is that a lot of it is carried out via the good old-fashioned method of networking.

9am coffees and bacon rolls are clearly a firm favourite!
Racing Teatray

We have an office in Birmingham that handles regional work and non-client facing roles. IT support are in Johannesburg. I use Lync all the time to talk to colleagues.

However, client-facing service professionals build up relationships through networking and contacts, and that's incredibly hard to do remotely by telephone or VC. No junior starting out would ever get anywhere in terms of building relationships. And no we can't spend our lives travelling around like gadflies because this is a desk-heavy job and so your networking opportunities need to be on your doorstep.
Chris M Wanted a V-10

PG wrote:
Chris M Wanted a V-10 wrote:
....current employer does not yet have a scheme...


Chris, your employer has to have a scheme as from September this year, by law. Even if you have one employee, as from this September, they have to be enrolled in a scheme. NEST scheme has been set up for this purpose.

If your employer has not written to you about it, they are already breaking the new rules!

http://www.nestpensions.org.uk/sc...ublic/home/contents/homepage.html

I've checked and we were sent an e-mail on 23-Dec-2015 stating that
"the deadline for auto-enrolment is based on a Company’s PAYE code and the number of UK persons employed at 1 April 2012.

Based on our PAYE code, our auto-enrolment deadline is the 1 November 2016. In the meantime, we are looking at our options and will be giving more news on this in the New Year."


Except we've not been told any more, and a couple of new starters (since 1 June this year) have not been told anything about a pension scheme.

So is my employer breaking the law?
The NEST site seems to offer guidance for employers but little or nothing to help employees who believe that their employer is not meeting obligations to provide a scheme.

Help !!!
PG

Try here -
http://www.thepensionsregulator.gov.uk/
Twelfth Monkey

You want a paper trail, Chris.  No point going to the regulator unless you know they aren't going to meet the due date.  Forward that email to the heads of HR and finance, asking what's going on and making it clear that you know a scheme must be in place by 1st Nov.  Though it can be done more quickly it takes six months to set up a scheme in an orderly fashion, and some degree of employee consultation is certainly best practice (if not mandatory).  Having heard nothing with two months to staging is not entirely reassuring.  Do this now - if they haven't grasped the nettle, for whatever reason, there will be financial penalties.  I'd love to tell you that they'd be big enough to be a major kick in the arse to an employer that's hoping it'll all go away*, but they might not be (at least initially).  Your employer clearly does know about it though, or they wouldn't be aware of their staging date.

*It's most likely that they have been setting something up and have just been poor with communication, but it's best to find out.
canadian bacon

I have a non contributory pension through work, and put funds into a subsidized share scheme (I put in 6% they match me to 50% of that), pensions here in Canada are a bit odd, so I don't partake of them.
JohnC

Twelfth Monkey wrote:
You want a paper trail, Chris.  No point going to the regulator unless you know they aren't going to meet the due date.  Forward that email to the heads of HR and finance, asking what's going on and making it clear that you know a scheme must be in place by 1st Nov.  Though it can be done more quickly it takes six months to set up a scheme in an orderly fashion, and some degree of employee consultation is certainly best practice (if not mandatory).  Having heard nothing with two months to staging is not entirely reassuring.  Do this now - if they haven't grasped the nettle, for whatever reason, there will be financial penalties.  I'd love to tell you that they'd be big enough to be a major kick in the arse to an employer that's hoping it'll all go away*, but they might not be (at least initially).  Your employer clearly does know about it though, or they wouldn't be aware of their staging date.

*It's most likely that they have been setting something up and have just been poor with communication, but it's best to find out.


I agree with the above but in a crisis situation, a scheme can be set up within a day with The People's Pension or Now Pensions (Nest are based in India, so communication is a problem in several ways and they couldn't get a scheme set up in such short notice).

The employer can also postpone commencement of the scheme for 3 months without any input from the employees, so it might be delayed until the beginning of 2017.

The employer may have left it late but they are still operating within the law and I wouldn't want to suggest any kind of approach to the regulator until all deadlines are passed. Bringing a lot of pain to your employer is at some stage going to come back to bite you. I would agree with Twelfth and suggest that you ask when the scheme is going to start.
Twelfth Monkey

My understanding is that postponement requires notification of employees, though don't quote me on that.  Whilst it's arguably possible to set up a scheme at very short notice, it is (to put it mildly) extremely inadvisable.  This pretty much excludes scope for consultation, and there are usually several parties to involve - relevant staff, scheme administrator, payroll bureau, software/middleware (if needed) - and there may need to be changes to some of these.  But the bigger issue is that there are often teething troubles.  It's advisable to have at least two months before staging to do trial runs, and that's after everything else.  (I have used Now:Pensions for an employer I look after, and whilst I haven't got any complaints about it per se, I'd argue that setting one up in a day is pretty much impossible, and trial runs were most definitely needed.)

I think we're in agreement about course of action, though.  Approach employer with a concerned question, not the assumption of wrongdoing or stupidity on their part.
JohnC

We run a payroll bureau and do auto enrolment for payroll clients. The letter of postponement for staff just needs to be handed out prior to the staging date. One day is sufficient, if not advisable.

We are also getting a large number of companies coming to us to do their payroll and auto-enrolment because they thought they could do it themselves and then found out it was a bloody nightmare. I would wholeheartedly agree with you about the need to do things in advance if Chris' company are going to do it in-house but we are finding that even decent sized companies can't cope with auto-enrolment themselves unless they have a well qualified book-keeper doing payroll.

There are plenty of intermediaries who are prepared to take the payroll figures and then input that into an insurance company's system and do some of the monitoring but there can be a significant cost implication. We find we can do the payroll and the auto-enrolment for less a month than most intermediaries charge for just doing the auto-enrolment part.

Most employer's don't care about the performance of the scheme they are auto-enrolling into (and they have no responsibility in this respect at all) but I can see this being a major problem in 10 or 15 years time. I also think the rules need massive simplification because the employer can decided that pension contributions are paid on gross earnings, or just those earnings in the NI band or earnings excluding overtime, some employees can opt out but other can opt in - what a mess. SIMPLIFY: if you get paid, you and your employer must put a percentage into a pension based on the total gross earnings, be that a personal pension or an auto-enrolment one. The only exceptions would be those over a certain age.

EDIT: we have set two schemes up in a day for people who had left it beyond the last minute. I'd agree it was a lot of hassle and inadvisable but it is possible and much more preferable to a fine.
Twelfth Monkey

It's been a fudge, hasn't it?  And yes, simplicity is the biggest thing missing.
PG

Twelfth Monkey wrote:
It's been a fudge, hasn't it?  And yes, simplicity is the biggest thing missing.


Could not agree more. The rules are stupidly complicated. As ever with anything the government decide to do.  
JohnC

Just a small practical issue that arose this morning. By coincidence an employee of one of our clients left and joined another of our clients. Both were using the same pension provider.

It appears that the insurance company system cannot recognise this employee in her new employment because she has the same e-mail address as someone else!!!!! - yes, you've guessed it, she has the same e-mail address as herself when she was in her last job.

Oh that is a problem we are told. Why wasn't the NI number used as the constant we asked. I don't know but that would have been sensible was the reply.

They are trying to get a fix but meanwhile we have wasted an hour with stuff that won't upload.

This I am afraid is the result of rushed legislation and little or no consultation with those that know the problems. Just imagine what's going to happen with Making Tax Digital (MTD) - it's coming in 18mths and HMRC don't even know how it's going to work. No software has been written but everyone is supposed to get prepared - what for? A f*****g disaster, that's what.

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