Tag: Pension

Pension for Nannies

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How does it work?

A percentage of your pay is put into the pension scheme automatically every payday.

A deduction is taken from your pay, your employer makes a contribution and HMRC also contribute by giving tax relief.

The employer and HMRC contributions cost you nothing.

How much would I pay?

You would pay an amount based on your earnings and contribution levels. The summary tables below show how much would be paid in total *

*Table is based on 2016/2017 tax year tax free earnings, qualifying pensions earnings and statutory minimum pension contributions.

FAQs

What if I am working two-part time jobs?

If you are an eligible job holder, you will be enrolled into both employer’s pensions schemes. You will then pay contributions based on your pay at each employer.

It is possible to combine pension pots when you come to retirement. It is recommended you speak to a financial advisor when doing so.

When can I get my pension and how much will I get?

This will all depend on your retirement age and how much you have paid into your pension before retirement. Pensions are invested in stocks and shares and therefore grow with interest, a bit like a savings account.

As you get nearer to retirement age, more of your pension is moved into cash so there is less fluctuation in is value when you want to take it.

The actual amount you could get will depend on many things. Some of these are under your control, like how long you save and the contributions you make. Some of them aren’t, like the contributions your employer makes and how much your retirement pot grows through investment.

You can use the link below to estimate your pension value on retirement:

NEST Pensions

Can I change my mind and get my money back?

You can change your mind and opt out of the pensions scheme. You cannot opt out until after you’ve been automatically enrolled.

The opt-out period is one month from when active membership is created, or you receive their letter with the enrolment information, whichever is latest.

You will be automatically re-enrolled every 3 years so you must write to your employer every 3 years if you want to continue to opt out.

The employer will issue a full refund within a month of receiving a valid notice of any contributions made to your auto enrolment pension.

If you decide to leave the scheme outside the opt out period, you will instead be ‘ceasing active membership’. Whether you get a refund of contributions will depend on the pension scheme rules.

What if I leave the country? *

Option 1 – leave your pensions in the UK pension plan.

Your pension will continue to be held by your pension provider until you claim it. You can request early payment of these pensions from age 55 at which point you may be able to take up to 25% of the value as a lump sum and use the remained to provide a pension for your lifetime. This is based on the UK laws applying to pensions and retirement.

Option 2 – transfer your UK pensions to an approved arrangement in your new country of residence.

It may be possible to transfer your UK pensions to a pension arrangement overseas if the pension plan is a Qualifying Recognised Overseas Pension Scheme (QROPS). In order to qualify as a QROPS and in order to transfer to a QROPS certain conditions must be met.
*information provided via https://www.pensionsadvisoryservice.org.uk/about-pensions/when-things-change/moving-abroad

Starting to work for the employer When your pension should start
Between April 2012 and March 2013 01-May-17
Between April 2013 and March 2014 01-Jul-17
Between April 2014 and March 2015 01-Aug-17
Between April 2015 and December 2015 01-Oct-17
Between January 2016 and September 2016 01-Nov-17
Between October 2016 and June 2017 01-Jan-18
Between July 2017 and September 2017 01-Feb-18

Work Place Pension and Auto Enrolment

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Work Place Pension and Auto Enrolment

Auto enrolment – What is it? and how does it affect you?

Auto enrolment is a government initiative to get more people saving as part of their pension scheme at work.

As from 2018 this ill good news to all employees as all employers will have to set up a pension scheme for all eligible employees. Employees will also benefit from additional contributions from their employer, additionally they will enjoy tax relief on their own contributions.

Although enrolment is a legal obligation (If you are already enrolled you should have been informed by your employer with details of  how much both of you will contribute, when you were added and how to leave. If you want to, you can opt out of participating in the scheme, but only after you have been enrolled. This raises the all-important question – should you remain in such a scheme? Or opt out?

It’s important you understand the details so that you can make an informed decision about your pension/savings for the future.

With that, start with understanding eligibility. If you are between 22 and state pension age (you can check that here, https://www.gov.uk/state-pension-age) earn over £10,000 per year, and work in the UK, your employer must auto enrol you. If you don’t meet that criteria, you still have the right to request that your employer enrols you in a work place pension scheme.

Next look at contributions. As part of this initiative, both employee and employer must make minimum contributions, and these are rising in three steps each year from 2016. The exact minimum contributions take into account how much you earn, but roughly speaking the minimums look like so:

  Employer minimum Employee minimum* Total minimum
To 5-Apr-18 1% 1% 2%
6-4-18 to 5-Apr-19 2% 3% 5%
From 6-Apr-19 onwards 3% 5% 8%

* Should your employer pay more than the minimum, then this may mean your minimum is actually lower, so long as the total minimum is met.

The other benefit will be tax relief on your contributions. This means is that the government will give back some of the tax you would normally pay as part of your contribution.

Simply put, by joining the scheme, you will benefit with more money paid into your pension scheme, compared to your own personal savings plan.

It remains your choice however as a current best option ensure you are enrolled. Simply speak to your employer and make the most of your pension opportunity.