Workplace Pension Is It Worth It?

[lankeela]

Can anyone advise me? I am 62 and won't be able to retire officially until I am 66 although I doubt I will ever actually be able to retire! Is it worth me having the Workplace Pension - I earn in the region of £1000 per four weeks.
I have tried the Money Advice Service calculator but it won't let me put in my earnings - nothing happens. I feel my employer is trying to discourage me from joining by saying I would be better off having the money in my bank rather than paying it monthly. Chris can you advise?

[bhg481]

It's always worth paying into a workplace pension because the employer also has to pay into it for you. That's probably why your employer is trying to talk you out of it.

[Old_Geezer]

IMO it is worth saving as much as possible since after retirement there won't be much more than whatever pension you have, to live on.

At 62 it seems a little late to be considering the situation, but better late than never I trust. IMO whatever little you project you will get out of it (and your employer should be able to show you the predicted income) it has to be worth it. Although only you can put the figures into the spreadsheet, create the graph, and get a feel for your particular situation.

At the amount the bank pays these days it be EXTREMELY unlikely leaving it there would be best. Ad that would be the case even if the banks started paying a realistic rate because pension schemes play the same markets and the employer adds their share.

Anyway, I was under the impression that unless you put money into a private pension scheme then the employer was legally obliged to enrol you into theirs.

[ubasses]

2 good answers, plus you and your employer paying in so does the taxman by way of tax relief.

[Cloverjo]

I am in the process of sorting out workplace pensions for the employees of the company I work for. I have a letter which states that all employees earning £10,000 + and are between 22 and state retirement age must be enrolled.
Your company will pay a penalty if it does not comply.

[chelle7272]

Cloverjo is right the comapny HAVE to enrol you. You can opt out after if you weish but as your employer also has to contribute it seems worthwhile.
Employer contribution calculator here

http://www.workplacepensions.gov.uk/employee/employer-contribution-calculator/

[fiction-factory]

Type Your Answer Here...The employer does pay in and there is tax relief on your contribution (although the tax is only deferred if you are a taxpayer in retirement.
The problem though is the amounts are so small at present you may feel it's not worth it. If you pay 1% and employer pays 1% then that amounts to £20 a month or £280 a year. If you pay in for 4 years at that rate you would have a pot valued at £1120 plus any growth. Let's assume £1200. That would buy an annuity of maybe £40 a year.
Okay, the minimum rate of contributions will increase over time under the rules but still we are not going to be talking about much more than £1-£2 a week extra pension at age 66

[fiction-factory]

For some reason I used 14 months in a year- the actual fund ill be less than I said

[Bazile]

Will 4 years in a pension , yield anything worth writing home about ?

[fiction-factory]

Fund will be worth around £1000 (or maybe a bit more allowing for increased minimum rates over time -I'd need to look up the exact rules). Could give a cash sum tax free sum of £250 plus £1 a week pension annuity for life

[dasherman]

You no longer have to buy an annuity with any of your pension pot and can theoretically receive all monies saved tax free, although that would depend on other income you may have.
This gives more info: https://www.moneyadviceservice.org.uk/en/articles/defined-contribution-pension-schemes

[fiction-factory]

Yes, draw down schemes for example are possible. The main point Iw as trying to make is that these minimum payment schemes are only ever going to be small part of retirement planning as the amount won't be life changing. On balance if someone can afford to pay in then it's worth it for the free employer contribution provided you have plan for drawing the money (annuity rates are pitiful), realise that charges may offset any benefits) and can deal with the admin

[fiction-factory]

Hopefully chris ( Buenchico ) will see the thread at some point and give you his advice/thoughts

[lankeela]

Need to make a decision soon whether to opt out or go for it - now being 'encouraged' to opt out with warnings of there being no benefits available to me if I have a pension in place (that's the general gist!) which I find very difficult to believe. Also as the only person where I work who will be eligible being made to feel responsible for others not getting a pay rise if I opt for the pension as employer cannot afford both!

[chelle7272]

That's not right, your employer is not allowed to encourage you to opt out! And unfiar too playing a guilt card.
Can you get independent advice?