Consumer rights: New graduate faces pension quandary
Should I join my company stakeholder pension scheme / What to do about a tax demand I can't pay / How to head off rising service charges on my flat?
Sunday 11 October 2009
I've just graduated and got a job with a small firm. The boss is asking me if I want to join a stakeholder pension. Is it a good option and how does it work?
Any firm that employs five people or more has to offer its employees the chance to join a pension and that might be a stakeholder scheme. Your employer will have chosen the company that provides the pension. Your contributions may be taken directly from your wages and your employer may pay a contribution into it too. The pension provider claims tax relief for you and adds that to your pension fund. So your fund builds up using your contributions and tax relief, any employer's contributions and the return that the pension provider earns for you by investing the money.
If you change jobs, you can go on paying into your stakeholder scheme or change to your new employer's scheme if it would make you better off. If you decide to stop paying into the stakeholder pension you can leave it to go on growing. When you retire, you can take a tax-free lump sum and use the rest to buy an annuity which is an investment that gives you an income. How much you end up with depends on how much is paid in, how long the money is invested for and how well the investment performs over those years.
If your boss is asking you to join a stakeholder scheme, that will be the only scheme he or she offers. What you have to decide is whether that's your best option for saving for retirement or whether you'd be better off with a different kind of personal pension. A pension scheme which your boss is also contributing to is often the best choice. What is not a good option is to ignore retirement planning altogether. It may seem far too soon to bother about pensions now when you've just graduated. But the longer you save the more you'll have in the kitty in 40-odd years. Do your parents have financial advisers they trust? Get all the details of your boss's stakeholder scheme and talk over the options with the adviser. It could be the best graduation present you get.
I haven't paid my tax bill. I owed about £10,000 at the end of July but I lost a big contract last December because a firm I'd been doing some work for on a self- employed basis for several years went out of business. Now HM Revenue & Customs is threatening to take me to court but I just don't have the money.
Your bill is for half of the amount of tax HM Revenue and Customs assume you owe for the year 2008 to 2009 based on what you had earned in the previous tax year. As your earnings have gone down, you won't owe them that much, but if you don't let them know, they'll keep on demanding it. You can apply to have the amount you pay "on account" for 2008-2009 reduced. But you can't just keep on ignoring the Revenue's demands. At the minute, your bill is actually increasing as there's interest being added on because of the late payment.
As a matter of urgency, call your tax office and explain your predicament. Get your self-assessment forms or accounts completed as soon as possible; work out how much you do owe, and send a cheque for that amount. These days the tax man is much more approachable and helpful than they once were.
I have a leasehold flat in London and my management charge has just gone up by 18 per cent. I'll have to pay £120 per month and don't feel I see anything for it. What's more, the charge has risen by over half in three years which is well above inflation. What options do I have to dispute the charge or have the management company changed? Most of the residents in my block of flats rent rather than own their homes like me, so it's difficult to co-ordinate as many of the owners are absent and difficult to contact.
This is a frequent complaint, particularly during a recession when people's finances are under pressure and it seems that some management agents are using leaseholders as a steady income stream. Often the increases are presented to the leaseholder as a fait accompli. You are not powerless, but unless you get together and say "enough is enough", the increase in fees will just go ahead. If you and the other leaseholders own the freehold, you will also be shareholders in the company which appoints the managing agent. The absent owners, who have tenants in their properties, may not even be aware of the situation. You should write to them all asking them to agree to hold an extraordinary general meeting to discuss the increase in fees and look at whether the managing agent should be changed.
In the meantime, write to the managing agent asking why the fees have gone up. Ask for a list, in writing, of all the people such as insurance companies, cleaners, etc who take a share of the fees and how much each gets. As wages haven't gone up by 18 per cent, the cost of cleaners and gardeners won't account for the increase, but insurance premiums could be part of the reason. You could also shop around before any meeting to see what other agents are likely to charge and whether there may be cheaper insurance policies. You'll have more chance of convincing the other shareholders that it would be a good move to change agents if you go armed with all that information.
If you don't own the freehold, do you have a residents' committee? The committee could contact the freeholder about the charges. If you don't know who the freeholder is, ask the managing agent or contact the Land Registry
Do you need a financial makeover?
Write to Julian Knight at the Independent on Sunday, 2 Derry Street, London W8 5HF email@example.com
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Day In a Page
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens