Cheap "guaranteed" pension

dunstonh

But has the potential to be sold like hotcakes if the banks decide to latch on to the idea. They love selling high profit twaddle like this as tied agents cannot recommend investment funds and this takes that problem away.

EdInvestor

Why did I post the original report? Because I thought it was interesting.

Plent of people like no risk guaranteed stuff (like premium bonds and GEBs) which allow a little flutter - whatever you may think of the value that they offer.

If this one means you can take advantage of the tax relief pensions offer at no risk, many people may like it - particularly those coming close to retirement who don't want to take risks.

Some more news : it's from the people who brought you "Intelligent Money"

http://www.trustnet.com/general/news/display-story.asp?id=72042&db=structured

They are trying to sign up a big bank to provide the guarantee.

dunstonh

Structured products are easy to sell. They sound good as they can hide virtually all the charges, don't cripple tied agents with fund selections they are not allowed to give, they have the ability to give headline grabbing soundbites and make lots of money for the providers.

That doesn't make the product any good though.

cheerfulcat

EdInvestor wrote:

Why did I post the original report? Because I thought it was interesting.

Plent of people like no risk guaranteed stuff (like premium bonds and GEBs) which allow a little flutter - whatever you may think of the value that they offer.

If this one means you can take advantage of the tax relief pensions offer at no risk, many people may like it - particularly those coming close to retirement who don't want to take risks.

Some more news : it's from the people who brought you "Intelligent Money"

http://www.trustnet.com/general/news/display-story.asp?id=72042&db=structured

They are trying to sign up a big bank to provide the guarantee.

But it's not no risk! Getting your money back in nominal terms means *losing* money in real terms. After ten years with no growth and at the current rate of inflation your original investment will be worth about 65% of what it is now!

Just as with GEBs, this thing is actually riskier than stock market investments and the real shocker is that you are not being paid for that risk.

whiteflag_3

cheerfulcat wrote:

But it's not no risk! Getting your money back in nominal terms means *losing* money in real terms. After ten years with no growth and at the current rate of inflation your original investment will be worth about 65% of what it is now!

Just as with GEBs, this thing is actually riskier than stock market investments and the real shocker is that you are not being paid for that risk.

Correct !

If people close to retirement want mininimal risk they can invest in a cash fund . No heather being set alight but they would still get 3-4% pa net of charges.

EdInvestor

If people close to retirement want mininimal risk they can invest in a cash fund.

Best to choose a SIPP then and pay no charges whatsoever

whiteflag_3

EdInvestor wrote:

Best to choose a SIPP then and pay no charges whatsoever

So we now a have a new version of the low cost SIPP, the free SIPP ( I wouldnt like to be a shareholder in one of these SIPP providers!)

oceanblue_3

EdInvestor wrote:

Best to choose a SIPP then and pay no charges whatsoever

Ed, I have had a good look around your bile-coloured website, but can find no reference to this "free" SIPP.

Do you have a special section for it, along with the unicorn, the loch ness monster, and rocking-horse s**t?

EdInvestor

There are a number of SIPPs where there is no annual management charge.

Click here for a few

In most of them you can just leave the money to collect the tax relief and earn interest in the cash account if you like.

oceanblue_3

EdInvestor wrote:

There are a number of SIPPs where there is no annual management charge.

Click here for a few

In most of them you can just leave the money to collect the tax relief and earn interest in the cash account if you like.

You said "no charges whatsoever", didn't you? Yet each of the providers highlighted by your link makes a charge for its services. Tell me, why don't you follow the direction given on your own website, and seek independent professional advice? I'm sure it would help you gain a firmer grip on reality.