We're All In

‘We’re all in.’ You must have heard it, the ads for the new Workplace Pension. Lots of smiling faces proclaiming that they will be part of a workplace pension. The fact that most of the people working for large companies are probably already in such a scheme is neither here nor there. I don’t know many large companies that do not or have not offered a pension to staff.

     The thing about this new scheme is that every employer is supposed to offer a pension scheme, even if they only employ one person.

      I looked up the details of the scheme, not that it really affects me as I am already retired. But out of interest I thought I would have a look at the website to see what I could find. Every employer has to offer a pension to staff earning over £10,000. Now, the bit you don’t hear about is that the staff don’t have to join, they can opt out, but the employer must not encourage them to opt out. (https://www.gov.uk/workplace-pensions - if you’re interested)

    Lots of thoughts come flooding into my mind here.

1.  How many smaller businesses pay their employees more than £10,000 a year?
2.  How many smaller businesses only employ part time staff?
3.  Will people have their hours cut so that the employers don’t have to pay the pension contributions? What if some is earning £12,000 rather than £10,000?
4.  Who is going to be managing these pension pots?
5.  Will each company have to go out and find a scheme themselves or is it all going to be something recommended by the government?

     I don’t do sums so I’m not even going to try to work out the percentage costs of what these pension contributions will be. But with many firms running on tight budgets, with every penny accounted for in many paypackets, is this scheme a burden too far for many people?

     It is not going to help the low paid or part time worker, they won’t earn enough. It is not going to help the small businesses who employ people on good wages but running on small profit margins. These are probably people who just about manage to handle the necessary paperwork for HMRC let alone deal with pensions. So more work there for the accountants!

     And are these pensions transferrable as people move from job to job? Or will people end up with half a dozen different pension pots to draw on when they finally reach retirement age?

     It seems to me it is going to help the pension companies who will be getting money in from every Tom, Dick and Harriett. I wonder how many Tories have shares in pension companies.

     And apart from everything else, I thought the workers of this country already paid in to a pension fund. It’s called National Insurance. Isn’t this Workplace Pension Scheme just another tax on top of what people already pay? Or will it fail because people will opt out anyway?

     Can’t make my mind up whether it is good or bad, but on balance I don’t really like it and am glad I am already retired and don’t run a business that employs people.