Pensions Regulator

[bigtime]

My business employs 1 person on 16 hrs min wage. As the min wage has increased I will be paying the employee over 10k per annum so have to pay and set up a pension for her. I've looked on the Pensions Regulators website with a list of providers below. Does anyone know if any of them below are free or charge minimal costs? Seems like a waste of time as my employee has stated she will opt out the scheme as soon as she gets notification she's been opted in.
Collegia Pension
Creative Pension Trust
Cushon Master Trust
The Lewis Workplace Pension Trust
National Employment Savings Trust (NEST)
NOW: Pensions
Penfold Auto Enrolment Workplace Pension Scheme
The People’s Pension
Smart Pension Master Trust
Standard Life Workplace Pension
True Potential Investments

[Sheepshanks]

I wasn't involved in the admin but I had to be enrolled into Nest and then opt out. Everyone in the (small) company had their own arrangements.

No cost was ever mentioned and I had to authorise payments and I don't recall seeing one to them.

A quick glance at the Nest website suggests there's no cost to employers - but I didn't delve deeply.

[AndyAudi]

We use NEST for simple family staff.

It’s a doddle & free to use.

You key in their details then they will get a pack they can opt out of if they wish, if you think they will opt out do it soon so they can opt out before you need to make deductions.

Think it’s every 3 years you’ll need to put then back in & do this process again.

No idea what their reasoning for opting out is- each to their own, but they may change their mind on receipt of the pack. It’s a pretty easy way of saving which doubles as soon as they put money - getting tax added (even if they don’t pay tax) & your contribution.

Edit - be careful not to encourage them U.K. opt out, you’re not meant to do that.

[Ham_and_Jam]

You need to use NEST, it’s the scheme set up by the government and its a free to use service.

I’ve used it for all our employees over the years. I enrol them, they opt out the next day.

[AndyAudi]

Off topic but

We’d an old guy retired on min wage rate retired in Feb & cashed in all his accumulated pension

He’d £14k all in I think (& he paid a chunk of it in tax to
taking it out in Feb, his thinking’s not looking so daft now!

[AndyAudi]

Ham_and_Jam said:

You need to use NEST, it’s the scheme set up by the government and its a free to use service.

I’ve used it for all our employees over the years. I enrol them, they opt out the next day.

Curious question, why do they all opt out, surely some consider saving for the future?

[Ham_and_Jam]

AndyAudi said:

Curious question, why do they all opt out, surely some consider saving for the future?

Just the sector, demographic and the age of our staff.

Most are part time positions on near minimum wage. They are slightly older and have no prior private pension provision.

They were all horrified when I said their wages would be lower due to auto enrollment pension contributions.

[AndyAudi]

We actively encourage all ours to take up, depressing thing is that the values are so tiny.

We make it available for all pay (at slightly lower %) not just pay over the £6k threshold, so lower paid do save a bit more.

Edited by AndyAudi on Wednesday 9th April 23:33

[bigtime]

Thanks everyone and I’ll look into NEST tomorrow. I only looked at one of the providers that were going to charge £20 per month plus VAT.

[MustangGT]

Ham_and_Jam said:

AndyAudi said:

Curious question, why do they all opt out, surely some consider saving for the future?

Just the sector, demographic and the age of our staff.

Most are part time positions on near minimum wage. They are slightly older and have no prior private pension provision.

They were all horrified when I said their wages would be lower due to auto enrollment pension contributions.

Their wages are not lower, their take home amount is. They will also gain the company contribution into the pension scheme and an extra contribution by HMRC. Minimum contribution is 8%, legal minimum by employer is 3%, employee 5%, normally done as 4% direct, 1% HMRC.

Prior to opt out they are supposed to have received proper advice on the matter. Simply saying their wages will be lower is not proper advice.

[Ham_and_Jam]

MustangGT said:

Their wages are not lower, their take home amount is. They will also gain the company contribution into the pension scheme and an extra contribution by HMRC. Minimum contribution is 8%, legal minimum by employer is 3%, employee 5%, normally done as 4% direct, 1% HMRC.

Prior to opt out they are supposed to have received proper advice on the matter. Simply saying their wages will be lower is not proper advice.

They received all the information required. I did not give them any advice as I am not allowed to by law.

I simply paraphrased what happened.

[Ham_and_Jam]

AndyAudi said:

We actively encourage all ours to take up, depressing thing is that the values are so tiny.

We make it available for all pay (at slightly lower %) not just pay over the £6k threshold, so lower paid do save a bit more.

Edited by AndyAudi on Wednesday 9th April 23:33

I would be very happy for any of my staff to join. All our staff, a small number, are above the threshold but are mostly about 20 hours a week so all qualify regardless. They just didn’t want to.

We pay them above the minimum wage albeilt only about 10% more, but is more than than a lot in our sector and neighbouring businesses. We also pay them an annual bonus and have done for 20 years which is probably equivalent to the contributions.

Our staff retention is excellent so assume they are happy with us.

[AndyAudi]

Ham_and_Jam said:

They just didn’t want to.

Our staff retention is excellent so assume they are happy with us.

Just to be clear I’m not having a go at what you do or how you operate, it’s the people I struggle to understand sometimes.

For some they have valid reasons to opt out but society has failed to educate many more, that guy I mentioned that retired with £14k had never logged in or looked at his NEST account just blindly accepted it as a payroll deduction! He’d the original info pack but never did anything & had to register & take control in the run up to retirement….
Another staff member on a little over the £6k/yr (we pay % on all earnings) said they had their own pension they paid a fixed amount into monthly (set up by someone who came round their workplace about 25years ago) - it wasn’t my business to ask but she thought it was just about £5/mth…. She was proud she’d never stopped paying it.

Our default even for short term seasonals on just over min wage is to put them in immediately (no 3mth deferal) & they never seem to opt out cause it’s in place from day 1.
They keep coming back so just pick up where they left off

[Sheepshanks]

AndyAudi said:

Just to be clear I’m not having a go at what you do or how you operate, it’s the people I struggle to understand sometimes.

Even madder - loads of people opt out of public sector pensions. One of my daughters works for the NHS and she reckons hardly any of the younger staff are in the pension (she is). Think at her level the contribution is 10%. With student loan repayments, plus all the other deductions, half their pay is gone.

[Ean218]

bigtime said:

Thanks everyone and I’ll look into NEST tomorrow. I only looked at one of the providers that were going to charge £20 per month plus VAT.

You might want to check out People's Pension. NEST have been in the news recently about not actually being low cost, running a deficit and paying executives handsomely.

[MustangGT]

Ham_and_Jam said:

MustangGT said:

Their wages are not lower, their take home amount is. They will also gain the company contribution into the pension scheme and an extra contribution by HMRC. Minimum contribution is 8%, legal minimum by employer is 3%, employee 5%, normally done as 4% direct, 1% HMRC.

Prior to opt out they are supposed to have received proper advice on the matter. Simply saying their wages will be lower is not proper advice.

They received all the information required. I did not give them any advice as I am not allowed to by law.

I simply paraphrased what happened.

Thanks for the update. It is nice to see somebody complying properly, so many do not.