Auto Enrolment Pension - Is it worth it ?

jasonsony735

jasonsony735

jasonsony735

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Auto Enrolment Pension - Is it worth it ?

I don't currently have one and my work have mentioned it too me today . they also have to pay % in as well so looks like a good idea .

What is your view on this ? Why would people op out ? and why should I stay in It ?
 
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I'm an employer and we went to a seminar the other week about this, though we don't have to start introducing it until next year.

I'd opt in (not opt out, really) if I was you, the contributions and matches are so small it won't effect your day to day living but every little helps when it comes to retirement.

As an employer it's a bit of a pain though. We're a tiny company, currently employ 2. The costs of it doing it will be another thing in the list of why we can't afford to employ someone else.
 
Not sure how old you are but if you think you are going to make something of your life to support you when you retire then this is what is going to top up your state pension (if it exists by then) to provide you for hopefully a few decades.
 
Go for it. As already stated the amount that comes out each month depends on what you earn but it's minimal either way. If you don't have a pension it's especially important.
 
Put it this way, your employer basically gives you free money. If you can afford the contribution from your salary each month then your employer will give you more money on top of that in your pension. Even better, HMRC add money on top of that too!
 
For most people this is worth having due to the employer contributions. It becomes a little more complex when you have more income and are a higher rate tax payer, but like I said, for most people this is an easy decision.
 
Unless you already have significant other investments (unlikely or you wouldn't be asking this question) then yes, staying opted in is a no brainer.
 
Burnsy2023 said:
For most people this is worth having due to the employer contributions. It becomes a little more complex when you have more income and are a higher rate tax payer, but like I said, for most people this is an easy decision.
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amigafan2003 said:
Unless you already have significant other investments (unlikely or you wouldn't be asking this question) then yes, staying opted in is a no brainer.
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Echoing these gentlemen and for the reasons and caveats mentioned.
 
I pay 6% and my employer pays in 6%. Well worth it imo. I don't want to spend my twilight years being broke.
 
Employer contributions means its absolutely worth it. If your employer is matching you at say ~4, then you're basically saving at well above what most banks are offering right now.

That said, I do question whether I'll ever get to retire anyway.
 
Thompson_NCL said:
Employer contributions means its absolutely worth it. If your employer is matching you at say ~4, then you're basically saving at well above what most banks are offering right now.
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Plus there is interest on top of both you and your employers contributions. How much depends on the scheme you are with and what choices you make.
 
Burnsy2023 said:
Plus there is interest on top of both you and your employers contributions. How much depends on the scheme you are with and what choices you make.
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Not sure about interest (you mean growth?), but you get the tax back straight away.

It's pretty much always worth joining.
 
fendi said:
all depends on how your final pension is calculated. but odds on it is worth it.
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Someone's a couple of decades behind the curve (or a public sector worker) :p

Final pension is decided on how much cash you have in your pension investment. It's all based on how much gets put in and how much it grows.
 
Can I pick a % to pay in ? As standard is just 1% Right ?

Example If I pick 6% does my work have to match it ? I'm worried if this is the case they might get upset.
 
jasonsony735 said:
Can I pick a % to pay in ? As standard is just 1% Right ?

Example If I pick 6% does my work have to match it ? I'm worried if this is the case they might get upset.
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Depends what your particular employer's rules are. Where I am, you get 8% for free and they match up to another 4%...so you could get 16% for a cost to you of 4% before tax relief
 
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