Work pensions? - no politics pls

razil

Anyone know what the kind of average to good work stakeholder pensions are?

Wife was offered 3% matched and I'm thinking that is pretty ungenerous, I get that and 11.5% on top ( which is probably quite generous i admit, was about 8% before I hit 40)

soapy_jones

Got to admire your optimism razil...

razil

No politics pls

Lincsaddick

Anyone know what the kind of average to good work stakeholder pensions are? Wife was offered 3% matched and I'm thinking that is pretty ungenerous, I get that and 11.5% on top ( which is probably quite generous i admit, was about 8% before I hit 40)

I'll ask the forbidden question .. how old is your Mrs? ... the younger you are when you start the better .. 3% doubled is better than nothing and nowadays all pensions are portable meaning she can take the pension with her if and when she changes jobs. If it were me or my Mrs, I'd go for it .. your own pension provision is VERY generous

BIG_ROB

Tough one to answer with an apolitical answer, for me anyway...

C.Walsh'sLoveChild

Whats a pension?

Addick Addict

5% matched would be the norm for most companies.

Lincsaddick

Whats a pension?

a french one star hotel

sm

3% is the minimum companies will be required to offer from next year http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1084110927&r.l1=1073858787&r.l2=1084822773&r.l3=1073912964&r.l4=1084109972&r.s=m&type=RESOURCES

 

So the answer is that the employer is offering the minimum required by law!

If you Google pension calculators you will get several calculators calculating what your end pension is likely to be.   Once you have done so you may have more of an interest in politics!

razil

ok slight error its 5% matched, she's 31

mine is 3% matched, plus 11.5% non contrib (its 8% if under 40) - her current pension is similar to mine so it isn't unique altho possibly on the generous end, the one she is being offered is at a new firm who are trying to recruit her. I am trying to explain to her that this affects the overall package and makes the offer less appealing than at first glance. My company one was formed straight after they dropped doing final salary schemes so that is probably why its more generous than some.

 

I am certainly interested in the politics but its been done on another thread

golfaddick

A 5% matched contribution seems fair enough to me...........you are not going too get many employers paying in excess of 5-8% into a stakeholder plan.

During the  20 years I have been in the business I have always said that the bare minimum that you should be paying into a non final salary scheme is 6% (the amount that most public sector workers used to pay) but realistically it should be 10%+. I don't know many people who could afford to pay in more than 10% of their salary into a pension and still live, esp if they have mortgages, kids etc.

northstandsteve

is this definately going through next year ? If it is a lot of comapnies will go to the wall, I for one won't be able to do it, I have 10 staff.

cafcfan

If I'm out of date on pension legislation I apologise but I've been wondering for a while now whether it's actually worth contributing to a personal pension plan or whether you'd be better off long-term investing in a stock & shares ISA instead.  Okay, you don't get the upfront tax breaks BUT you do get the resulting income and capital gains tax-free AND you do get to keep your capital.  With a pension that either goes into buying an annuity or gradually fades away on income drawdown.

I appreciate that the maths might be very different if you add an employer's matched contributions on an occupational scheme though.  (Although maybe not once the pension manager's fees have been deducted!)

Lincsaddick

ok slight error its 5% matched, she's 31

mine is 3% matched, plus 11.5% non contrib (its 8% if under 40) - her current pension is similar to mine so it isn't unique altho possibly on the generous end, the one she is being offered is at a new firm who are trying to recruit her. I am trying to explain to her that this affects the overall package and makes the offer less appealing than at first glance. My company one was formed straight after they dropped doing final salary schemes so that is probably why its more generous than some.

 

I am certainly interested in the politics but its been done on another thread

To ensure a decent income in old age, your Mrs really has to pay into a pension scheme for so long as she / you both can afford it. She won't be eligible for a state pension for at least 34 years .. who knows what mess the benefits system might be in come 2045

ken from bexley

ok slight error its 5% matched, she's 31

mine is 3% matched, plus 11.5% non contrib (its 8% if under 40) - her current pension is similar to mine so it isn't unique altho possibly on the generous end, the one she is being offered is at a new firm who are trying to recruit her. I am trying to explain to her that this affects the overall package and makes the offer less appealing than at first glance. My company one was formed straight after they dropped doing final salary schemes so that is probably why its more generous than some.

 

I am certainly interested in the politics but its been done on another thread

To ensure a decent income in old age, your Mrs really has to pay into a pension scheme for so long as she / you both can afford it. She won't be eligible for a state pension for at least 34 years .. who knows what mess the benefits system might be in come 2045

I think the  state retirement age is a bit above 65 for a young lady like Mrs R...... at least in  national state requirement, 

If you go on the DWP pension  retirement calculator you will get a calculation based on what is, but that  is bound to change.

For years this was kicked into the 'long grass' by succesive goverments.

The planned forecast of retiring at 68 looks pretty fragile to say the least, in 2044.

and with all the mess on the economy at  present, who is to say that the state pension will not be 'means tested', of course they will dress it up in marketing terms  and call it 'pension plus' or some such malarky, whoever is in power. At present if you have savings of over £6,000 your benefits are affected, and I think over £24,000 you get a big fat zero, in qualifying for additional assistance, such as attending a day centre, run by the council? You are encouraged to save for your old age, and then penalised by the benefits system when you do?

According to DWP web site......

Increase State Pension age to 66Under the Pensions Act 2011 women’s State Pension age will increase more quickly to 65 between April 2016 and November 2018. From December 2018 the State Pension age for both men and women will start to increase to reach 66 in October 2020.These changes affect you if you're:a woman born on or after 6 April 1953 a man born on or after 6 December 1953The current law already provides for the State Pension age to increase to:67 between 2034 and 2036  68 between 2044 and 2046
However, the government announced on 29 November 2011 that State Pension age will now increase to 67 between 2026 and 2028. This change is not yet law and will require the approval of Parliament.

redman

3% matched  is very poor.

From a survey I saw, average employye contributions were 2.6% employye and 5.5% employer. This would give 8.1% total which would not be a great pension

 

To get a pension of half salary at 65:  a 30 year old starting to pay in needs to pay in about 15%of salary total, a 40 year old  20%. Obviously depending on investment returns

redman

Remember you do get tax relief on your pension contributions (worth 20% or 40%) and many companies now do what is called salary sacrifice which effectively will save you a portion of National Insurance

Dippenhall

Most companies pay between 3% and 5%. 

Redman's formula is as good a guide as anything, if you are just starting to pay in.  Total contributions from you and employer should be about half your age. If you start at 20 then 10% between you and your employer is adequate, compounding of investment returns does the rest. What you pay between 20 and 30 might give you perhaps 70% of your retirement fund.

Doesn't matter if it's ISAs or pensions it's saving and losing as little in charges that matters.