Workplace pension.
Discussion
I am currently opted out of my workplace pension scheme. I have been informed that I am going to get opted back in again soon.
To me I cant see the point of it, I opted out and I am still wanting to be out so why I have to go through the opt out again is beyond me but that not the reason for this thread.
In the three years I have been out of the scheme I have saved what would have been my contributions, I have been able to use this money on occasion as a fund for larger purchases that I have then paid back into my own pot which has grown and been added to, I have no loans and a small mortgage on a 550k house. We have savings and other investments.
In terms of missing out on employers contributions I am employed in the family business so I would be paying my contributions twice in a roundabout way since although I am an employee I run the place with my Father.
Has anything radically changed in the last three years and is there a good reason that I am missing that I should be "in" as it were ?
To me I cant see the point of it, I opted out and I am still wanting to be out so why I have to go through the opt out again is beyond me but that not the reason for this thread.
In the three years I have been out of the scheme I have saved what would have been my contributions, I have been able to use this money on occasion as a fund for larger purchases that I have then paid back into my own pot which has grown and been added to, I have no loans and a small mortgage on a 550k house. We have savings and other investments.
In terms of missing out on employers contributions I am employed in the family business so I would be paying my contributions twice in a roundabout way since although I am an employee I run the place with my Father.
Has anything radically changed in the last three years and is there a good reason that I am missing that I should be "in" as it were ?
Getragdogleg said:
I am currently opted out of my workplace pension scheme. I have been informed that I am going to get opted back in again soon.
To me I cant see the point of it, I opted out and I am still wanting to be out so why I have to go through the opt out again is beyond me but that not the reason for this thread.
In the three years I have been out of the scheme I have saved what would have been my contributions, I have been able to use this money on occasion as a fund for larger purchases that I have then paid back into my own pot which has grown and been added to, I have no loans and a small mortgage on a 550k house. We have savings and other investments.
In terms of missing out on employers contributions I am employed in the family business so I would be paying my contributions twice in a roundabout way since although I am an employee I run the place with my Father.
Has anything radically changed in the last three years and is there a good reason that I am missing that I should be "in" as it were ?
The tax benefits for both yourself and the family business makes it worthwhile to take a pension surely?To me I cant see the point of it, I opted out and I am still wanting to be out so why I have to go through the opt out again is beyond me but that not the reason for this thread.
In the three years I have been out of the scheme I have saved what would have been my contributions, I have been able to use this money on occasion as a fund for larger purchases that I have then paid back into my own pot which has grown and been added to, I have no loans and a small mortgage on a 550k house. We have savings and other investments.
In terms of missing out on employers contributions I am employed in the family business so I would be paying my contributions twice in a roundabout way since although I am an employee I run the place with my Father.
Has anything radically changed in the last three years and is there a good reason that I am missing that I should be "in" as it were ?
I take it the tax relief is of no interest to you?
https://www.moneyadviceservice.org.uk/en/articles/...
https://www.moneyadviceservice.org.uk/en/articles/...
An opt-out from the pension scheme normally lasts for three years. If you've opted out, or stopped contributions to the scheme, your employer is required to automatically enrol you into the scheme at a later date (normally every three years), if you're an eligible jobholder at that time.
You are missing out on the tax relief & employer's contributions though?
You are missing out on the tax relief & employer's contributions though?
IanJ9375 said:
I take it the tax relief is of no interest to you?
https://www.moneyadviceservice.org.uk/en/articles/...
It might be if I could make head or tail of it. I suspect the relief I'm missing is more than made up for in avoiding charges on stuff we buy instead of HP or take out a loan for, like a car or the roof when we got that done.https://www.moneyadviceservice.org.uk/en/articles/...
This is why I am asking though, I dismissed it as a bad idea initially and to a degree I have been correct to view it with suspicion, the other guy who works here stayed in and he has seen his contributions rise quite a lot, he is not happy about this and feels the original amount was low to keep him in, now he cant opt out unless he changes jobs.
It all depends upon whether you (and the company) want a highly tax efficient way of diverting profit for your retirement and today's corporation tax bill.
As other have said, your company has a legal responsibility to re-enrol you every 3 years. That is the law, not their choice, and you are free to opt our every time.
You have to realise pensions are just tax allowances. How you invest the money is (within the rules) entirely your choice.
It is highly tax efficient for a company to make a pension contribution for you, as this is offset against corporation tax for the company and also offset against income tax and (in many cases) NI for you (and Employers NI for the company).
Just ask if you would like more information on this.
Edited to remove stupidity (income tax with corporation tax!)
As other have said, your company has a legal responsibility to re-enrol you every 3 years. That is the law, not their choice, and you are free to opt our every time.
You have to realise pensions are just tax allowances. How you invest the money is (within the rules) entirely your choice.
It is highly tax efficient for a company to make a pension contribution for you, as this is offset against corporation tax for the company and also offset against income tax and (in many cases) NI for you (and Employers NI for the company).
Just ask if you would like more information on this.
Edited to remove stupidity (
Edited by JulianPH on Thursday 16th January 17:18
JulianPH said:
It all depends upon whether you (and the company) want a highly tax efficient way of diverting profit for your retirement and today's corporation tax bill.
As other have said, your company has a legal responsibility to re-enrol you every 3 years. That is the law, not their choice, and you are free to opt our every time.
You have to realise pensions are just tax allowances. How you invest the money is (within the rules) entirely your choice.
It is highly tax efficient for a company to make a pension contribution for you, as this is offset against corporation tax for the company and also offset against income tax and (in many cases) NI for you (and Employers NI for the company).
Without wanting to be guilty of thread hi-jacking, I'd be interested to know if this tax efficiency is still effective if your SIPP is already at the lifetime allowance?As other have said, your company has a legal responsibility to re-enrol you every 3 years. That is the law, not their choice, and you are free to opt our every time.
You have to realise pensions are just tax allowances. How you invest the money is (within the rules) entirely your choice.
It is highly tax efficient for a company to make a pension contribution for you, as this is offset against corporation tax for the company and also offset against income tax and (in many cases) NI for you (and Employers NI for the company).
omniflow said:
Without wanting to be guilty of thread hi-jacking, I'd be interested to know if this tax efficiency is still effective if your SIPP is already at the lifetime allowance?
Yes, from the company Corporation Tax POV. No from your (individual) POV.There are ways of making it work sometimes, but generally speaking once you hit the LTA most bets are off.
Have a chat with Nik on the IM sticky if this could apply to you. It is all about personal circumstances and you may very well want to keep these private.
2 sMoKiN bArReLs said:
....I am so glad that I invested in the various schemes that were available to me. The combination of tax relief, employer contributions and market growth have served me well.
Well said, Sir. It truly is that simple.The question isn't "why would you?" - the question is "why wouldn't you?".
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