Friday, August 11, 2017

Auto enrollment torpedo incoming

The pensions submarine will sink low earners with auto-enrolment torpedos

By 2019 wage costs for employers are going to rise, while at the same time wages received by employees is going to fall. Consider this with the previous post.

Posted by stillthinking @ 02:16 AM (5544 views)
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4 thoughts on “Auto enrollment torpedo incoming

  • Not to mention the new 0.5% payroll tax for apprenticeships. This brings total obfuscated taxes on earned incomes to a whopping 16.3% – pushing the effective marginal tax rate to 41.5% on earnings over £11k. I wrote to my MP and said just be honest and tack it onto the EMPLOYEE’s earned income tax a.k.a. National Insurance… Working for a salary is a mug’s game, best to dress up income as dividends + capital gains and pay a lower rate than people on minimum wage.

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  • The opt out rate on auto enrolment pensions has been surprisingly low so far however I expect this to rise potentially quite dramatically as the contribution rate increases.

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  • This will be another factor pushing lower rents and house prices. Less take home pay after pensions (for those affected) equals a lower reservation price.

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  • tenyearstogetmymoneyback says:

    My view is that the bigger risk is what will happen when people reached retirement and find how small their pension is.

    Thinking of two different friends who both have nice properties and who are both in their late fifties.

    One was complaining that they had been told that their work pension would be worth about £3000 a year.
    He would need half of that to pay his council tax.

    The other has her own business and has done what Mombers recommends.
    She hasn’t even started a pension !

    I can imagine some forced sales happening if people retire in that situation.

    The biggest plus about my largish employer is the pension schemes.
    Even with the newer downgraded money purchase scheme the company pays in 10% if
    the employee pays in 5%.

    I doubt if the new rules will affect either the employees there or the company at all

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