PePiPoo Helping the motorist get justice Support health workers

Welcome Guest ( Log In | Register )

Convincing son not to opt out of pension
stamfordman
post Tue, 24 Sep 2019 - 17:06
Post #1


Member


Group: Members
Posts: 23,582
Joined: 12 Feb 2013
From: London
Member No.: 59,924



My oldest, who's started his first job, in the NHS, wants to opt out of the pension scheme as he just wants more cash. I've told him that's mad as the NHS employer contribution is huge - now about 20.7% - but I'm failing to convince him as he just doesn't see retirement at his age of course. His contribution is 9.3%.

Any arguments that could work?
Go to the top of the page
 
+Quote Post
3 Pages V  < 1 2 3  
Start new topic
Replies (40 - 49)
Advertisement
post Tue, 24 Sep 2019 - 17:06
Post #


Advertise here!









Go to the top of the page
 
Quote Post
The Rookie
post Tue, 1 Oct 2019 - 09:53
Post #41


Member


Group: Members
Posts: 56,198
Joined: 9 Sep 2003
From: Warwickshire
Member No.: 317



QUOTE (spanner345 @ Tue, 1 Oct 2019 - 10:25) *
to put it bluntly, how did he manage to qualify as a doctor if he is that stupid?

Modern education, we have people in our accounts team who don't understand pensions as well as us engineers.

QUOTE (Jlc @ Tue, 1 Oct 2019 - 10:50) *
The Grads at my place have no concept (or care) of retirement planning either.

All my 3 pay into pensions (all under 27, only one a grad), the youngest has also managed to save up the deposit and buy a house while paying into her pension (just gave up fancy cars, fancy coffees and gym membership for a while).

This post has been edited by The Rookie: Tue, 1 Oct 2019 - 09:58


--------------------
There is no such thing as a law abiding motorist, just those who have been scammed and those yet to be scammed!

S172's
Rookies 1-0 Kent

Council PCN's
Rookies 1-0 Warwick
Rookies 1-0 Birmingham

PPC PCN's
Rookies 10-0 PPC's
Go to the top of the page
 
+Quote Post
rosturra
post Wed, 2 Oct 2019 - 13:43
Post #42


Member


Group: Members
Posts: 683
Joined: 19 Jul 2017
Member No.: 93,086



If your son is a qualified doctor - then I'm assuming that you are either retired / close to retirement.

With the arrogance of youth, I would imagine that he thinks you are old and decrepit!

Surely you just need to point out:

"Look son, I'm knackered now. I don't really think I could work 'til I'm 67 when the state pension kicks in.
It may well be 70 by the time you retire.
Do you really want to have to work until you're 10 years older than I am now? "

Go to the top of the page
 
+Quote Post
nigelbb
post Wed, 2 Oct 2019 - 17:48
Post #43


Member


Group: Members
Posts: 3,768
Joined: 17 Mar 2013
Member No.: 60,602



QUOTE (rosturra @ Wed, 2 Oct 2019 - 14:43) *
If your son is a qualified doctor - then I'm assuming that you are either retired / close to retirement.
The OP’s son is most likely 24 or 25 so the OP is likely to be no older than in his fifties.


--------------------
British Parking Association Ltd Code of Practice(Appendix C contains Schedule 4 of POFA 2012 ) & can be found here http://www.britishparking.co.uk/Code-of-Pr...ance-monitoring
DfT Guidance on Section 56 and Schedule 4 of POFA 2012 https://www.gov.uk/government/uploads/syste...ing-charges.pdf
Damning OFT advice on levels of parking charges that was ignored by the BPA Ltd Reference Request Number: IAT/FOIA/135010 – 12 October 2012
Go to the top of the page
 
+Quote Post
Guest_Charlie1010_*
post Wed, 2 Oct 2019 - 20:08
Post #44





Guests






My financial advisor said it was refreshing that I have been paying into a pension since I first started work some 35 years ago.
Of course it wasn’t very sexy in those days as beer, fags and motorbikes were more the norm for spending on rather than pensions. But I’m so glad I did. Even though one of the company pensions was diminished in a way similar to the Maxwell case the total of the funds from the five different schemes is not that bad.

And in all the schemes the employer matched my contribution.
So double the investment as well as deducted from pretaxed salary.

To me it was an offer to good to refuse.

As one can now draw a personal pension at 55 (or retire completely) while still working then the OP may well be near retirement!

I hope he sees sense.
Go to the top of the page
 
+Quote Post
Kieran_e1
post Wed, 2 Oct 2019 - 21:06
Post #45


Member


Group: Members
Posts: 307
Joined: 29 May 2013
Member No.: 62,252



QUOTE (Harnes @ Tue, 1 Oct 2019 - 08:50) *
QUOTE (Kieran_e1 @ Mon, 30 Sep 2019 - 21:10) *
NHS is defined benefit as said.

I deal with the scheme and it's employees every day.

It's a very good scheme and will be worth a lot to him in retirement ( most likely available to him from 57 or 58 by the time he gets there but current rules are 55 )

the amount he will see in his hand now is pennies in comparison.

some of the "management fees" comments did make me chuckle.

nice to see the part time financial advisers out in force smile.gif wonder why I bothered doing all those exams lol


So, some questions for you as you suggest you know your stuff regarding pensions.

1) Is the money paid today actually put into a fund ..or....is the money used to pay current pensions and just a record kept of his payments ?

it's paid into superannuation and there is no personalised pot. it meets the current and future obligations.
2) What size of pot will he need, to give a return of say £1500-£2000 per month when he retires ? (assuming that £2000 will be enough at his retirement age)

depends how you want that income made up. annuity you'd need a pot of around £800k ( 65 years old, non indexed , spouse pension of very roughly
income drawdown around £500k should cover it. if you get your strategy right.

3) What sort of payments will he have to make now to achieve that pot ?

how long is a piece of string. depends on age, attitude to risk , lump sum , regular payments or both, personal tax rate etc etc.

I agree he is very lucky to be getting almost 21 % contributions from his employer, I get 3% !!

He doesn't get 21%, it's an aggregated cost per head.



answers in your quote

kieran
Go to the top of the page
 
+Quote Post
rosturra
post Wed, 2 Oct 2019 - 22:57
Post #46


Member


Group: Members
Posts: 683
Joined: 19 Jul 2017
Member No.: 93,086



QUOTE (nigelbb @ Wed, 2 Oct 2019 - 18:48) *
QUOTE (rosturra @ Wed, 2 Oct 2019 - 14:43) *
If your son is a qualified doctor - then I'm assuming that you are either retired / close to retirement.
The OP’s son is most likely 24 or 25 so the OP is likely to be no older than in his fifties.


Then we agree.

If the OP is in his fifties then he is close to retirement.
Go to the top of the page
 
+Quote Post
The Rookie
post Thu, 3 Oct 2019 - 08:58
Post #47


Member


Group: Members
Posts: 56,198
Joined: 9 Sep 2003
From: Warwickshire
Member No.: 317



QUOTE (rosturra @ Wed, 2 Oct 2019 - 23:57) *
If the OP is in his fifties then he is close to retirement.

10-14 years (63 aspirational, 67 for my SP) doesn't feel at all close to me!


--------------------
There is no such thing as a law abiding motorist, just those who have been scammed and those yet to be scammed!

S172's
Rookies 1-0 Kent

Council PCN's
Rookies 1-0 Warwick
Rookies 1-0 Birmingham

PPC PCN's
Rookies 10-0 PPC's
Go to the top of the page
 
+Quote Post
billyblue1
post Sun, 13 Oct 2019 - 21:46
Post #48


Member


Group: Members
Posts: 45
Joined: 12 Oct 2019
Member No.: 106,152



If he stops paying contributions that extra bit of his salary he gets will be taxed and, as you said, he'll lose the free employer's contribution.
Go to the top of the page
 
+Quote Post
Mad Mick V
post Wed, 16 Oct 2019 - 18:16
Post #49


Member


Group: Closed
Posts: 9,710
Joined: 28 Mar 2007
Member No.: 11,355



I would imagine he will soon be on the 40% rate and that's when things tend to fall into place with tax free contributions and employers contributions. It's a step change.


The NHS scheme like the Civil Service and Local Government schemes have all been modified over the last 10-15 years and not to the benefit of the prospective pensioner.

Higher input contributions and much worse end benefits are evident and I would imagine IDS and his proprietory think tank will attack the public pension system with vigour if the Tories have a sizeable majority in the next Parliament.

So does your son really want to wait for an inferior pension scheme or stay in his present one ---no brainer in my opinion.

Last, I would get him down the bank or whatever (a prospective AVC session perhaps) and let a financial advisor loose on him with actuarial tables to hand.

Mick
Go to the top of the page
 
+Quote Post
The Rookie
post Thu, 17 Oct 2019 - 03:50
Post #50


Member


Group: Members
Posts: 56,198
Joined: 9 Sep 2003
From: Warwickshire
Member No.: 317



QUOTE (Mad Mick V @ Wed, 16 Oct 2019 - 19:16) *
I would imagine he will soon be on the 40% rate and that's when things tend to fall into place with tax free contributions and employers contributions. It's a step change.

It's not really, you go from 32% deductions (Tax plus NI) to 42%, while technically 0.5% is a step change, 32 to 42% isn't as big a change as the '20%' to '40%' income tax sounds.

The bigger issue is all the other 'opportunities' that change when you hit the higher rate of tax, for a colleague at work going into the higher rate of tax meant effective marginal deductions of over 70% due to the loss of children's tax credits and married person's tax allowance, which is why he salary sacrifices down to the lower rate of tax.

This post has been edited by The Rookie: Thu, 17 Oct 2019 - 03:52


--------------------
There is no such thing as a law abiding motorist, just those who have been scammed and those yet to be scammed!

S172's
Rookies 1-0 Kent

Council PCN's
Rookies 1-0 Warwick
Rookies 1-0 Birmingham

PPC PCN's
Rookies 10-0 PPC's
Go to the top of the page
 
+Quote Post

3 Pages V  < 1 2 3
Reply to this topicStart new topic
1 User(s) are reading this topic (1 Guests and 0 Anonymous Users)
0 Members:

 



Advertisement

Advertise here!

RSS Lo-Fi Version Time is now: Thursday, 28th March 2024 - 22:56
Pepipoo uses cookies. You can find details of the cookies we use here along with links to information on how to manage them.
Please click the button to accept our cookies and hide this message. We’ll also assume that you’re happy to accept them if you continue to use the site.
IPS Driver Error

IPS Driver Error

There appears to be an error with the database.
You can try to refresh the page by clicking here