Peoples Pension
Discussion
Hello
Needs some advice regarding the above.
My sister (58yr) has asked me if she should continue paying into the above, I don’t thinks she’s been in it too long.
A little bit about her :- 58yr old. On her own. Private rents. Full time at the Hilton where she’s been for around 20 yrs. No private pension. No savings. Holds down a full time job and works couple night week delivering takeaways to make ends meet and have a little extra to spend on her grand children and save for a cheap holiday once a year.
Now she’s having £30+ taken out of her wages each month.
My thoughts are to tell her it’s a waste of time given the small amount, and taking into account her age, if it’ will be worthwhile in 9 yrs time. What ever she gets in 1 hand they will deduct from the other once retired I would think.
She’s obviously going to have to rent after retirement and claim any benefits available.
hence why I’ve said the above.
If she wants to save £30+ month stick it in a S/S isa ?
Any thoughts ?
Mark
Needs some advice regarding the above.
My sister (58yr) has asked me if she should continue paying into the above, I don’t thinks she’s been in it too long.
A little bit about her :- 58yr old. On her own. Private rents. Full time at the Hilton where she’s been for around 20 yrs. No private pension. No savings. Holds down a full time job and works couple night week delivering takeaways to make ends meet and have a little extra to spend on her grand children and save for a cheap holiday once a year.
Now she’s having £30+ taken out of her wages each month.
My thoughts are to tell her it’s a waste of time given the small amount, and taking into account her age, if it’ will be worthwhile in 9 yrs time. What ever she gets in 1 hand they will deduct from the other once retired I would think.
She’s obviously going to have to rent after retirement and claim any benefits available.
hence why I’ve said the above.
If she wants to save £30+ month stick it in a S/S isa ?
Any thoughts ?
Mark
Just had another word with her.
She’s been in the scheme for a couple of years. Previously it was 2% for both employer/employee. It’s now just increased to 2% employer and 3% employee.
Yes your right if she opts out she won’t get the benefit of the Hilton’s contribution ie 2% which I assume will be £20.00 a month or thereabouts if she’s paying £30.00 on 3%.
So total in ongoing will be around £50.00 month. £600.00 per annum @9 years. Is it worth it ? I don’t know. Fag packet figures £5,500 + any increases which won’t be a lot I don’t suppose.
Let’s for argument sake say she ends up with £10,000 buying a annuity would be a waste of time, but I’ve just remembered she would be able to draw down on it wouldn’t she ???
Everyone’s situation is different though. If she can manage to pay her 3% contributions would she be better plodding ?
Mark
She’s been in the scheme for a couple of years. Previously it was 2% for both employer/employee. It’s now just increased to 2% employer and 3% employee.
Yes your right if she opts out she won’t get the benefit of the Hilton’s contribution ie 2% which I assume will be £20.00 a month or thereabouts if she’s paying £30.00 on 3%.
So total in ongoing will be around £50.00 month. £600.00 per annum @9 years. Is it worth it ? I don’t know. Fag packet figures £5,500 + any increases which won’t be a lot I don’t suppose.
Let’s for argument sake say she ends up with £10,000 buying a annuity would be a waste of time, but I’ve just remembered she would be able to draw down on it wouldn’t she ???
Everyone’s situation is different though. If she can manage to pay her 3% contributions would she be better plodding ?
Mark
I’m always amazed at the lack of knowledge when it comes to pensions.
Based on what you’ve written, it would definitely make sense to stick with the scheme.
She would be getting double what she put in back and more after 10 it so years at which point she would also be taking it out tax free.
It is free money in that sense
This seems like a no brainier to me.
Based on what you’ve written, it would definitely make sense to stick with the scheme.
She would be getting double what she put in back and more after 10 it so years at which point she would also be taking it out tax free.
It is free money in that sense
This seems like a no brainier to me.
gregs1959 said:
Just had another word with her.
She’s been in the scheme for a couple of years. Previously it was 2% for both employer/employee. It’s now just increased to 2% employer and 3% employee.
Yes your right if she opts out she won’t get the benefit of the Hilton’s contribution ie 2% which I assume will be £20.00 a month or thereabouts if she’s paying £30.00 on 3%.
So total in ongoing will be around £50.00 month. £600.00 per annum @9 years. Is it worth it ? I don’t know. Fag packet figures £5,500 + any increases which won’t be a lot I don’t suppose.
Let’s for argument sake say she ends up with £10,000 buying a annuity would be a waste of time, but I’ve just remembered she would be able to draw down on it wouldn’t she ???
Everyone’s situation is different though. If she can manage to pay her 3% contributions would she be better plodding ?
Mark
From April 2019 if she stays in, she'll have to pay 5% while her employer will have to pay 3%. That's my understanding anyway. I would continue with it without a doubt, but she can decide as she wants.She’s been in the scheme for a couple of years. Previously it was 2% for both employer/employee. It’s now just increased to 2% employer and 3% employee.
Yes your right if she opts out she won’t get the benefit of the Hilton’s contribution ie 2% which I assume will be £20.00 a month or thereabouts if she’s paying £30.00 on 3%.
So total in ongoing will be around £50.00 month. £600.00 per annum @9 years. Is it worth it ? I don’t know. Fag packet figures £5,500 + any increases which won’t be a lot I don’t suppose.
Let’s for argument sake say she ends up with £10,000 buying a annuity would be a waste of time, but I’ve just remembered she would be able to draw down on it wouldn’t she ???
Everyone’s situation is different though. If she can manage to pay her 3% contributions would she be better plodding ?
Mark
She will get paid more this way and save on tax
fat80b said:
I’m always amazed at the lack of knowledge when it comes to pensions.
Based on what you’ve written, it would definitely make sense to stick with the scheme.
She would be getting double what she put in back and more after 10 it so years at which point she would also be taking it out tax free.
It is free money in that sense
This seems like a no brainier to me.
Agree with everything except only 25% of fund will be tax free. The rest will be potentially taxable depending on other income etc.Based on what you’ve written, it would definitely make sense to stick with the scheme.
She would be getting double what she put in back and more after 10 it so years at which point she would also be taking it out tax free.
It is free money in that sense
This seems like a no brainier to me.
Thanks to everyone who has taken the time out to reply.
I’m going to suggest to keep it going if she can manage it.
Like said above though everyone’s situation is different to some people saving £30.00 month is peanuts to others it’s an awful lot and if it’s going to increase to 5% it’s something she’ll have to also consider.
I’m aware of the 25% you can take tax free, but to clarify - she has a £10000 pot takes £2500.00 leaves £7,500. Can she draw down on this at a later date ? Would she then pay tax ?
assuming she’s then retired and under the threshold with her state pension
Thanks everybody
Mark
I’m going to suggest to keep it going if she can manage it.
Like said above though everyone’s situation is different to some people saving £30.00 month is peanuts to others it’s an awful lot and if it’s going to increase to 5% it’s something she’ll have to also consider.
I’m aware of the 25% you can take tax free, but to clarify - she has a £10000 pot takes £2500.00 leaves £7,500. Can she draw down on this at a later date ? Would she then pay tax ?
assuming she’s then retired and under the threshold with her state pension
Thanks everybody
Mark
gregs1959 said:
Hello
A little bit about her :- 58yr old. On her own. Private rents. Full time at the Hilton where she’s been for around 20 yrs. No private pension. No savings. Holds down a full time job and works couple night week delivering takeaways to make ends meet and have a little extra to spend on her grand children and save for a cheap holiday once a year.
I agree with the comments that it is worth continuing with the pension. But I just wanted to comment - your sister is working bloody hard at 58 years old. Fair play to her - she must have a lot of tenacity. TBH it made me feel tired just thinking about doing that! A little bit about her :- 58yr old. On her own. Private rents. Full time at the Hilton where she’s been for around 20 yrs. No private pension. No savings. Holds down a full time job and works couple night week delivering takeaways to make ends meet and have a little extra to spend on her grand children and save for a cheap holiday once a year.
Jimmy Recard said:
BoRED S2upid said:
At the Hilton? Astonishing if true.
Really? It doesn’t sound like she’s a manager or similar. I would be surprised if she had had work contributions until it became compulsory BoRED S2upid said:
sidicks said:
BoRED S2upid said:
What’s happened to the previous 20 years contributions? You at she’s worked there for 20 years.
Presumably there was no pension scheme until it became compulsory a couple of years ago.
The trouble with pensions is they cost, but (amazingly) many employees don't see them as a benefit. (Merely an unnecessary cost..pretty much as demonstrated by OP).
So, as an employer why incur a cost that does not motivate an employee. (Even if it is for the employees' future benefit if they did but realise it)
Edited by 2 sMoKiN bArReLs on Wednesday 2nd May 11:04
gregs1959 said:
She’s a shift manager at the Hilton, but no company pension scheme in place prior to it becoming compulsory a couple of years ago.
She's a shift manager, working full time, earning £12k/yr?! Are your figures right that she's only paying £30/month for 3%? I'd imagine either she's part-time or something else is amiss as 40 hours/week at the current minimum wage is more than £16k alone.2 sMoKiN bArReLs said:
Prepared to be astonished then.
The trouble with pensions is they cost, but (amazingly) many employees don't see them as a benefit. (Merely an unnecessary cost..pretty much as demonstrated by OP).
So, as an employer why incur a cost that does not motivate an employee. (Even if it is for the employees' future benefit if they did but realise it)
It’s amazing. We introduced it when it became compulsory and over 85% of lower paid staff opted out. Talking to some of them, I realised they felt it was a pay cut and couldn’t understand the idea of pensions that aren’t the state pension The trouble with pensions is they cost, but (amazingly) many employees don't see them as a benefit. (Merely an unnecessary cost..pretty much as demonstrated by OP).
So, as an employer why incur a cost that does not motivate an employee. (Even if it is for the employees' future benefit if they did but realise it)
Edited by 2 sMoKiN bArReLs on Wednesday 2nd May 11:04
Jimmy Recard said:
2 sMoKiN bArReLs said:
Prepared to be astonished then.
The trouble with pensions is they cost, but (amazingly) many employees don't see them as a benefit. (Merely an unnecessary cost..pretty much as demonstrated by OP).
So, as an employer why incur a cost that does not motivate an employee. (Even if it is for the employees' future benefit if they did but realise it)
It’s amazing. We introduced it when it became compulsory and over 85% of lower paid staff opted out. Talking to some of them, I realised they felt it was a pay cut and couldn’t understand the idea of pensions that aren’t the state pension The trouble with pensions is they cost, but (amazingly) many employees don't see them as a benefit. (Merely an unnecessary cost..pretty much as demonstrated by OP).
So, as an employer why incur a cost that does not motivate an employee. (Even if it is for the employees' future benefit if they did but realise it)
Edited by 2 sMoKiN bArReLs on Wednesday 2nd May 11:04
) Some of these employees are educated, well qualified, but only see it as a cost rather than a future benefit. One manager was amazed (and I suspect did not believe me) that I was putting almost 18% of my salary into my pension, and yet I drive round in an 11 year old car.... He is late 30s, no savings, leased car, iPhone X, little pension provision, mortgage and two kids....It makes me wonder what is going to happen in 30 years.....
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