Pensions - Are They Really Worth Having?

dunstonh

But the prospect of double digit returns for two to four decades is not something that you, or any IFA, would ever formally offer to your clients.

Nope. I have been using 5% for some time now. I prefer to use a lower value, so when it comes in higher, everyone is happy. Not the other way round as was the case in the past with financial services.

ReportInvestor

I couldn't agree more.

To cut to the quick, I saw a Times or Independent article over the weekend which suggested that you had to double your pension contribution for every delay of nine years.

This fits in roughly with my own figures.

DavidLaGuardia

EdInvestor wrote:

Cash is not risky and most pension investments are risky as you say. And since the returns on pensions are expected to be so low (7%), and the charges are often quite high(2%) then cash increasingly looks like a good alternative.

Cash deposits are one example of renting ones money to others to make money on. If they cease to make a margin then they won't bother "renting" it and therefore over time real investment is logically what has been shown time and time to be much better.

People need to understand risk, time and asset allocation (spreading investments over different non-correlated asset classes). Cash is best for the short term.

EdInvestor wrote:

Make sure you save your cash in an ISA, as deemy says, so you get the tax relief, up to 3k a year is allowed.:)

What tax relief? You get a tax favoured investment environment, but there is no tax relief on contributions as there is with pensions.