Automatic Enrolment - Xero - What scheme to chose

Automatic Enrolment - Xero - What pension scheme to chose

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Hi,

The staging date for my company isn't until 1st November but the Pensions Regulator has prompted me to make a decision on what pension scheme to use.

I want to use a scheme that is officially support by Xero and at this moment in time that appears to be limited to NEST and The People's Pension.

NEST appears to be free to the employer whereas The People's Pension want a £500 setup fee.

It seems a no brainer for an employer to choose NEST but am I missing something?

I'm planning to speak to my accountant tomorrow but just thought I'd get other peoples opinions on the matter as well.

Thanks in advance, Mike

Replies (8)

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By F1MLB
06th Apr 2017 19:48

PS: This is the link I've used to compare schemes;

https://www.autoenrolment.co.uk/knowledge-bank/in-depth-articles/auto-en...

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By Tim Vane
06th Apr 2017 20:41

A taxi driver needed to buy a vehicle for his business. There were many many types of car available, but only two that came in the colour he preferred. Of these two, one was far cheaper and came with interest free credit, so he bought that one.

All was good. Until he picked up 4 passengers with their luggage. That's when he found out the boot was too small.

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By Cheshire
06th Apr 2017 20:58

Choosing a pension scheme based on bookkeeping software.....shakes head in total disbelief.

Get better payroll software.

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By Matrix
06th Apr 2017 21:02

Well it depends if you are just choosing the scheme to remain compliant or on performance/ease of use etc. If you just want a compliant solution then choose Nest and you may be able to set it up yourself which will save fees.

If you want to spend a bit more time looking into the performance of schemes and the ability for your employees to top up, the day to day running etc then look at the link above. I have set up schemes for clients with True Potential, Aviva and The People's Pension, so not everyone is going with Nest.

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RLI
By lionofludesch
06th Apr 2017 21:29

NEST is good for small employers. Very easy to use. The employer has no real interest in performance.

I've found Peoples clunky and NOW! even clunkier. I can't believe you have to set up pay periods every month.

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Euan's picture
By Euan MacLennan
07th Apr 2017 10:19

As I said in response to a thread a few weeks ago:

I would give credit to Smart for putting a fee comparison on their website. Scroll down to the table and look at the "Percentage of Smart Pension fees" line. NEST's fees are more than 5x those of Smart, but Smart's fees are 50% higher than TPP's. Smart does say that the TPP setup fee is £500, but it is actually £300 via an agent.

If the client is only interested in doing the least possible to comply with the law (or if he believes that all eligible employees will want to opt out), NEST is the easiest to set up and administer, despite their 2-stage process for paying over the contributions. If the client is interested in giving his employees a good pension scheme, TPP gives a better return on investment with lower charges against their pension pots. Smart's investments are restricted to L&G funds, so the return on investments may not be quite as good as TPP, and their charges are slightly higher than TPP.

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By F1MLB
07th Apr 2017 17:51

Thanks to everyone for their input. I spoke to my employees today and none of them plan to contribute to a pension so it looks like NEST it is!

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Replying to F1MLB:
RLI
By lionofludesch
07th Apr 2017 18:15

Hmmm - they say that and then hardly anyone opts out.

I think I'm up to four out of over 100.

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