If you are over 50, you may think that the introduction of the new workplace pension scheme into which employers are obliged to automatically enrol some or all of their workers into a pension scheme is not really going to impact too much on your retirement plans.
However, we agree with Lord Oakeshott, the LibDem Peer, who has publically stated that People over 50 being auto-enrolled into a pension should be given one hour of face-to-face advice due to the increased risk of misselling.
Lord Oakeshott is more concerned about the interaction with state benefits, debt and scheme charges, but it goes much further than this.....
The automatic enrolment, which will happen every 3 years if you opt out, can cause major financial implications if
- Your pension pot is likely to exceed £1,500,000
- You have applied for Enhanced or Primary Protection in the past
- If you are considering Fixed Protection because of the imminent reduction in the Lifetime Allowance from £1,800,000 to £1,500,000
- If you take advantage of the new Flexible Drawdown pensions
Without proper advice you could end up in the situation of breaching HMRC rules and be liable to large penalties or reductions in benefits.
Depending on the size of the employer this automatic enrolment could start as early as October 2012 which means that you should contact an Independent Financial Adviser as soon as possible to make sure that you are not unknowingly breaching HMRC rules.