Anybody who understands pensions? Help!!!

[Bookworm]

Any whizzkid with pensions who could assist us?

 

DH has just received the details of the proposed changes to his work pension, from which he needs to opt-out and tbh, that is one area where I suffer from brain blindness.

 

Anyone who can help? I'll post details if someone comes forward, what I really need is a financial advisor, but guess what, as someone on the breadline, I seldom have use for one!

[ErikaPNP]

Is it to do with occupational pension and state pensions, or is it to do with occupational pension affecting another benefit?

 

If he's planning for his state pension he can get a forecast here

[Bookworm]

No, he has a pension with his employer, and they are planning to change it to a smart pension. They present it as a good thing for everyone, where his pay packet would be slightly higher through the NI being paid before instead of after, and with a reduction in salary at source?

 

If I understand this right, it's basically a tax loophole for the employer, but which benefits the employee as well.

 

Well, you know what they say, if it sounds too good to be true... As far as I can make out, the only ones losing out would be the "pot" for state pensions as less NI being paid all the way round, and that's it.

 

We have to decide whether to opt-out or not (28 days) and could really do with someone more versed into this to advise whether there is a catch we can't see or whether this is really as good as it appears to be.

 

Thank you.

[ErikaPNP]

Sorry, Bookie I'm not well versed in occupational pensions and tax. Would someone in the employment forum possibly be able to help? I'll flag it up for Site Team, see if any of them have an idea about this....

[Bookworm]

Thanks Erika. It's really a wild shot in the hope that a CAGger somewhere will be versed into that kind of thing.

[MARTIN3030]

This looks an interesting link;

 

Previous Questions - The Pensions Advisory Service (TPAS)

[MARTIN3030]

Here too;

 

Pensions

[MARTIN3030]

your money: What does 'opting out' or 'contracting out' of S2P or SERPS mean? - from workSMART.org.uk

[IdaInFife]

we had this last year introduced at work - i cannot find where i put the info I got but when checking with someone who understands these things basically explained it -

 

this is more beneficial to the younger and people who work less hours ( i fit into both cats ) = it is all about what you would be putting towards your second state pension - i found it quite hard to understand

[pedross]

Hi Bookworm

 

This is the link you need to explain the details:

 

Class 1 NICs: Earnings of employees and office holders: The Smart Pensions Scheme

 

You will find all of the information you need. You just need to decide either way, it may not make a big difference whichever way you go. If it saves the employer costs thats always a good thing to help preserve jobs.

 

The main saving that I expect they will make is if (or maybe when) the government make employer contributions compulsory with increasing minimum levels. This will increase the employer contribution and help ensure that they are above the minimum.

 

Ida is thinking about something different I believe, sorry Ida.

 

I would not lose any sleep over it and I hope this helps you.

 

Pedross

[Bookworm]

Thanks everyone, I think I've got it worked out. Isn't it terrible that when you see something which may be of benefit to you presented to you by your employer, the first thought is always: "What's the catch?"

[MARTIN3030]

I know what you mean I had this experience myself-only it wasnt an employer it was the ex wife:p

[pedross]

Thanks everyone, I think I've got it worked out. Isn't it terrible that when you see something which may be of benefit to you presented to you by your employer, the first thought is always: "What's the catch?"

 

Glad you got it sorted in the end.

 

Pedross