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Pension auto enrolment, but property as a pension is still the best option
Pension auto enrolment, but property as a pension is still the best option
From October 1, the largest employers in the UK are legally required to automatically deduct pension contributions from their workers for payment into a retirement fund, which will be released when the employee reaches 55.
Maidenhead,
Berkshire,
United Kingdom
(prbd.net)
31/10/2012
From October 1, the largest employers in the UK are legally required to automatically deduct pension contributions from their workers for payment into a retirement fund, which will be released when the employee reaches 55.
The scheme will be rolled out to smaller sized firms over the next couple of years so by 2018 all workers will have access to a company pension, which their employer will be obliged to make payments into.
The aim is for workers who are surreptitiously enrolled into their company pension scheme to stay in the scheme as opposed to option out (which is an option). When they retire the funds should produce a good income.
Gill Alton runs Alton Property Partners, offering a residential investment property service to help you build a portfolio for a secure financial future. Alton Property Partners provides a comprehensive and personal Property Portfolio Building Service for buy to let investment in the UK. Gill believes that property could be the answer to your pension. She says:
"Auto enrolment is the Governments attempt to encourage everyone to start planning for their future. By brining the scheme in so you are automatically enrolled it cleverly means you have to 'take action' to opt out. By also deliberately starting with such a small contribution they are hoping this will keep the commitment to the scheme high. Hopefully large numbers will remain in the scheme even when the contribution level has risen.
"The Government really is caught between a 'rock and a hard place'. Low levels will keep the enrolment level high, but they will no almost nothing for producing a pension at the other end of any value. Even when the contributions increase to the full 8% its recognised that you really need to be investing at least 10% of your salary into a pension scheme to qualify for a worthwhile pension. Unfortunately it may well be too little too late for many people, but it is still a step in the right direction and one that should be embraced.
"With regard to these pension schemes such as that offered by Morrisons, it sounds like a great 'half way house' solution for those employees within Morrisons who are contributing to Money Purchase schemes. Guaranteeing how big their pension pot is going to be helps at least get past one of the hurdles to calculating your pension income. It adds a level of certainty in an uncertain Pension world. The employees are then only at the influence of the annuity rates."
Notes to Editors
Gill Alton is the founder of Alton Property Partners, which provides a comprehensive and personal Property Portfolio Building Service for buy to let investment in the UK. To find out how property could be the answer to your pension worries, click here. Alton Property Partners manage the entire investment process, from sourcing property at a discounted value, co-ordinating the Mortgage, arranging the refurbishment, right through to ensuring it is ready for the rental market
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About
Gill Alton is the founder of Alton Property Partners, which provides a comprehensive and personal Property Portfolio Building Service for investors of residential investment property in the UK.
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