Page 53 - Phonebox Magazine October 2012

By the time you read this the biggest shake up in UK pensions for years will have begun a 5 year period of implementation. If you were not aware of this, you are not alone. A recent survey by Scottish Widows found 52% of UK Workers* are completely unaware of what it refers to as 'the biggest pensions shake up in decades'.
for companies with between 50,000 and 119,999 employees. This will continue until January 2016 when the smallest companies will come under the new legislation.
From October 1st 2012, the National Employment Savings Trust (NEST) will be introduced. It is designed to be a simple, low cost pension scheme and along with it comes Auto Enrolment. This new requirement will mean employers must set up a pension scheme and contribute 1% of your salary into it. In addition, you will have to pay at least 0.8% and a further 0.2% will be contributed via tax relief. From October 2017 this will increase to 2% from the employer, 2.4% from you and 0.6% from tax relief. Finally, from October 2018 the figures will rise to 3%, 4% and 1% respectively, meaning a total minimum contribution of 8%.
Many larger companies will already have schemes in place which either match or better the minimum requirements and as such they are likely to be largely unaffected. However, for medium and smaller companies this will result in many of them needing to establish new schemes. This could be a NEST scheme or could be any pension arrangement that fulfils the relevant criteria. Employees are able to opt out of the arrangement, although under the rules your employer must enrol you first and then you need to ask to leave.
However, the implementation of this is being staggered, starting with the largest employers. Each month the size of companies affected by this new legislation will reduce. Initially, in October it is for companies with over 120,000 employees. From November it is
The introduction of NEST and, in particular, Auto Enrolment, is a considerable change to the way we have approached the establishment of funds for retirement in the past. For many, however, this will be only part of their arrangements for retirement. If you would like to discuss retirement planning opportunities that may be available to you then please call us for a free initial meeting. See our advert below.
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...in 1901 the life expectancy for a boy was 45 years and for a girl it was 49. By 2010, these figures had risen to 78 years and 82 years respectively. That is an increase of 73% and 67% in just over a century.
For every year that life expectancy increases, pensions have to fund a year more of income, putting ever greater pressure on both private and public pensions.
If you wish to review your pension arrangements or you are approaching retirement, why not contact Advison and see how we may be able to help you. Remember – initial meetings are always without cost or obligation.
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Advison specialises in Investments, Retirement Planning and Protection. We offer a return to the traditional values that only a smaller company can offer, a service we find is appreciated by the more discerning client.
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If you choose to proceed on a fee basis, our typical hourly fee is £150.
Advison Ltd is an appointed representative of IN Partnership the trading name of The On-Line Partnership Limited which is authorised and regulated by the Financial Services Authority. Registered (England) No. 5009271
* Scottish Widows Workplace Pensions report 2012
Phonebox Magazine 53