fossyant
Ride It Like You Stole It!
Yup, it's a lot from the employer - we're finding many youngsters not opting into the scheme as they'd rather have a few more bob in their pockets. It's a big part of your overall benefit's package !
Employers call it derisking. They have thrown the problem over the wall to the employee, and it's no longer anything they need to worry about. The surplus/deficit in DB schemes used to be swept under the carpet until FRS17, which made companies put it on their balance sheet. The closure of schemes started shortly afterwards.I have 3 I regularly check, and all have taken a hit by varying degrees though fortunately none that badly, and I have time on my side for them to recover (hopefully). Knowing what, if anything, to do about it is another matter! You'd kinda hope the pension companies might re-evaluate their default... but to what?
Tbh, it angers me that people's retirement savings are being handled in this manner, requiring financial advisors to understand. If your retirement pot is decimated, wtf are you supposed to do? Just accept 'the price of stocks can go down as well as up' and smile your way through old age poverty?
Looking at it like that yes I agree.
But a young 20 something - perhaps earning around £20k - is a bit reluctant to shell out £200pm for scheme that will most likely change its terms and conditions - IE retirement age - % contribution - I have to say they have a point -if was 20 right now -i wouldn't join.
Yes £200 or so is better fun to blow when you are 20. Ive been paying in since I was 16.
Yup, it's a lot from the employer - we're finding many youngsters not opting into the scheme as they'd rather have a few more bob in their pockets. It's a big part of your overall benefit's package !
Nasty discovery today - I want to take approx. 11% of my total pension savings as tax-free cash, and was hoping to clean out the crappy DC pot (annuities being rubbish) and leave the DB pension alone to provide income. The DC pot, which my employer dumped us in when they closed the DB scheme 2 years ago, is a fraction of the size.
But you can't aggregate pots like that, for no good reason. I would have to take 25% from the DC, the rest from the DB scheme, and buy a small annuity with what's left in the DC pot, but that represents a loss in income of about £150/month because the DB scheme gives far better VFM for a given fund value. Annuities from a DC pot are nowhere near.
Is there any way around this? The DC scheme is well above the small pots rules, so I can't use that loophole. Also the DB scheme doesn't allow transfers in, obviously.