A workplace pension is a way of saving for your retirement that's arranged by your employer. Some workplace pensions are called 'occupational', 'works', 'company' or 'work-based' pensions.
A percentage of your pay is put into the pension scheme automatically every payday. In most cases, your employer also adds money into the pension scheme fro you. You may also get tax relief (https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief) from the government.
By 2018 all employers must provide a workplace pension scheme. This is called 'automatic enrolment'.
Your employer must automatically enrol you into a pension scheme and make contributions to your pension if all of the following apply:
Use the staging date calculator (http://www.thepensionsregulator.gov.uk/employers/tools/staging-date.aspx) to checkwhen you could be enrolled. (Your employer can delay the date they enrol you in certain circumstances.) The calculator is for employers but also works for employees.
Your employer usually doesn’t have to automatically enrol you if you don't meet the previous criteria or if any of the following apply:
You can usually still join their pension if you want to. Your employer can't refuse.
Your employer doesn't have to contribute to your pension if you earn less than:
Your employer must write to you when you've been automatically enrolled into their workplace pension scheme. They must tell you:
Your employer can delay the date that they must enrol you into a pension scheme by up to 3 months.
In some cases they may be able to delay longer if they've chosen either:
Your employer must:
Your employer can't:
There’s been a lot of press recently surrounding final salary pension schemes with the likes of British Steel and Carillion in the spotlight. We’ve partnered with True Potential Wealth Management to provide you with more information on these schemes and advise of whether or not it may be in your interests to transfer out.
An increasing number of companies are closing their final salary schemes to employees due to the schemes becoming too expensive to run. In doing so, they are offering transfer rates of up to 50x the members projected annual income.*
Transferring out of a final salary scheme could give greater value and more flexibility when you retire but it’s not an easy decision as you may lose valuable guarantees from your existing pension scheme. If your transfer value is over £30,000 then you are required by the Financial Conduct Authority to seek impartial financial advice before transferring. Pension Transfer Specialists at True Potential Wealth Management will be able to help you with this by assessing factors such as your income, health, marital status and lifestyle to see whether or not transferring could be in your best interests.
Mike and his wife live in London. He is 55. His final salary pension entitled
him to £21,000 a year from the age 55. When Mike requested his pension
transfer value, he was offered £758,000. Mike’s aim was financial security
for himself and family with the flexibility to access his pension as he wishes.
By transferring the pension, he received a larger element of tax-free cash
and can maintain his income in retirement. Mike’s children will now inherit
the balance of his pension when he dies.
1This example is based on individual circumstances and may not apply to every case.
You’ll need to get in touch with your pension provider to request a Cash Equivalent Transfer Value (CETV). These documents typically have a 3 month expiry date so it’s important to send them in quickly to ensure that you have the maximum amount of time to consider your decision once the advice has been presented.
True Potential Wealth Management do not take an upfront payment to assess your case and you will only pay a fee if you are advised that the transfer is in your best interest and then decide to transfer your pension to True Potential Wealth Management.
*Source: FT Adviser June 2017