Work based pensions....

[CallmeGoose]

Right, having never had a pension, my work are introducing this Work based pension scheme....

Im 28, never had a pension, even though ive been qualified for 6 years now, and ive never saved a penny.. i need to get a grip on this for my futures sake! but... this work based pension scheme, im pretty ignorant to the facts so maybe a few of you can enlighten me and educate me.

let me get this straight. i recieve a monthly wage which i get taxed on each month...

if only 25% of your pension is tax free, that means the other 75% is taxable. so whats to stop me just putting £100 out of my wage by every month into a little box under my bed (which i already get taxed on) rather than putting money by into a pension which ill ALSO get taxed on??????? i just dont understand why i would want to be taxed twice on my money?

some people will say "your work place will pay in (money for free) also your money may grow more and beat inflation in a pension than under the bed at home"..

but If you think about it, they aren't really paying money in for free. To the masses it might appear as though 'your work are giving you free money' but the government end up taxing your pension anyway and taking that money back! And let's face it, the government haven't exactly been good with money these past few years. Im on the fence about this one, I don't have all the info yet, just what I'm reading I snippets here and there

Basically I want to know, at 28 years old, and considering / TRYING is probably a better word! to get a shore based job, is this work placed pension scheme worth it, or should i just put £100 in a box / bank account every month for the next 30 odd years?

cheers folks! need some educating on this subject!

[ivrytwr3]

my mrs said she didn't intend on staying in the job she was in and so didn't bother with their matched pension - she has been there 15+ years now!!

Civvy coppers put in about £400 per month and at the end of 30 years get £140k lump sum and £18k per year.

If it is the bog standard governmnet one your company has introduced then it's better than nothing, but whatever the company is offering it IS free money - start one now!!!

Have a read, there is even a basic calculator:

http://www.moneysavingexpert.com/sav...count-pensions

[akimba]

Yeah get a Pension
a. You put £100 in a month, ur boss will match your contributution up to a % of your gross wage a month (prob 4%) so your £100 a month is actually £200 also as your pension contribution is taken from your gross wage you get tax relief on it.

b. When you retire you get a tax free lump sum from your pension pot up to 25% of the whole amount the rest is paid weekly/monthly.

c. if you pop ur clogs before retirement you can fill a form in that will mean a nominated person will receive you pension tax free, if you don't fill this form in the it will go in with your estate and then for be eligible for inheritance tax etc.

[greaseweasel]

The inflation aspect is very important too.

Money devalues very quickly (thats the point of inflation, its a government tactic to reduce debt to neglible amounts over many years), so your box under the bed is worth bugger all by the time you retire.
You need to get the money working to keep its value, and thats basically what a pension does. The employers contributions help this along by doubling the earning potential of your cash.

[CallmeGoose]

Cheers lads. Think I'll opt for it and put a bit by every month. About time I started saving something!


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[akimba]

Your work should be opting you in automatically every other month anyhow but yeah worth doing as long as you not going to miss it each month.

[liveseytowers]

I've messed up at my work, they used to offer a decent pension but made it tricky to join by hiding the information. But now the only one they offer is the workplace on and the maximum they contribute is 1%. Feeling pretty mugged off by it, this new workplace pension is better than nothing but its allowing companies that used to offer a pension as a benifit to offer a big pile of shite.

Annoyed with myself that I left it too late to join.

[dpSparhawk]

I currently contribute £110 /month towards my pension. I then get the tax relief. Then, my employer matches that so I actually see £324/month go into my pension.

Plus I'm not a the maximum contribution. Something I will increase it to when we get our annual options window (Bit where we can modify our private health care, add people on etc. and also make changes to our pensions, plus apply for salary sacrifice schemes such as Cycle to work)

[Over Carl]

This thread is all assuming that our pension systems don't collapse. I wouldn't be surprised if there are some big shocks coming in the next decade or two.

[CallmeGoose]

Right I just had a phone all from the financial advisors dealing with all of this... they are called Futura Investments.

I have to pay in 1% of my monthly wage to this pension scheme and my employer will match that 1%.

1% of my monthly wage works out at £20... Twenty bloody quid!

My money then gets passed on to a pension company called Carey Pensions - http://www.careygroup.gg/services/pensions/

They then pass my money onto a company called Quilter http://www.quiltercheviot.com, who then invest that money in the stock market. The younger you are the more riskier investments they will invest in, the older you get, they will invest in safer investments.

Seacor (my company) will raise their contributions to 2% in 2017 and your contribution will increase to 3%

They will then raise their contributions to 3% in 2018 with my contributions having to increase to 5%

So based on 30 years working...

2% ( 1 from me and 1 from work ) for 3years ＝ 480 per year approx x 3 ＝ 1440
5% ( 3 from me and 2 from work ) for 1 year ＝ 1200
8% ( 3 from work and 5 from me) for 26 years ＝ 51,840

Do all pensions involve the stock market???

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[DavidF]

Apart from Over Carl's very real warning which I also think could happen.....The value of adding to your workplace pension can be even bigger than you think. Lets say you are just over the 41k basic tax threshold -you can use your pension contributions to bring you back down into the basic tax band. This also means you would not loose family allowance (if applicable). So a smart move may be to even over pay into it.....but as said it's a bit of a gamble..but leaving cash under the bed you can only be sure of one thing....it wont be worth as much even this time next year....infalation is a killer mate. You have to try to do something with cash even buying gold is better than doing nothing. It our all depends on your income your job/income and employment status on what you could/should do to sort out your future.

[Geko]

I'm on a final salary pension. They will probably put an end to it at some point as it costs them a fortune. But... I have had it for 15 years so far, and will probably ring fence it when it ends and start another contributions based one to top it up.

[Zippeyrude]

Mate 1% is feck all. I put away more than the average because my employer is generous and matches up to 10%, it is a hard sacrifice but as said above it is free money and tax efficient.

Id consider going with a decent percentage asap, and cant see the merit in this scaled approach.

[hoponbaby]

The reason for the scaled approach is probably 2 fold - employees that currently save nothing wouldn't be impressed by an immediate (say) 5% decrease in their take home pay - not good politically. Secondly it's an enforced increase to the costs for business in a time when many are still struggling. Most large companies who have both the financial ability to manage and the HR capacity to administer the schemes already have pensions in place, the real hit is on the small businesses who have a few employees.

[CallmeGoose]

But you have to remember this is the oil and gas industry I work in, these cunts are most definitely not struggling to make ends meet.

£25,000 per ship per day on average they get and we have about 20 ships...


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[akimba]

1% dream on!!!

I am like Zippy and my employer gives a good contribution by matching up to 5% so I put away 5% I also get a cafeteria allowance which half pays for me gym membership and the other half goes into me pension ;-)

Most pensions are against the stock market but are pretty much linked to BP and that's why there was a big Funk about pensions when BP had to "compensate" the USA for that oil spillage

[greaseweasel]

1% is pitiful, id sort out a good personal pension, or look to put the money in property or something that you can sell when you retire.

[CallmeGoose]

I know I was expecting at least 2-3%.

So what companies are good for personal pensions?


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[lagigolo]

You will never get a personal pension better than a crap work one. No personal pension will match or add to any of your contributions.

Most pensions invest your money in a safe option plan, but most give you the option to change to a more riskier one with better returns. You can normally change yearly, so you could if your starting out, jump in a risky one as you have less to lose to get it up a bit, then change.

If anybody went with the non-standard option it would be great to hear if it was a good move or not.

[funkyg]

I put 5% in, my employer puts 17% in, it's an awesome pension!