Post 'A' Day - maximum contributions?

EdInvestor

...which avoids the risk of someone paying £300 pm for 20 years only to find out that they should have been investing the money out of the cash fund periodically.

I find it a bit difficult to imagine how this could happen frankly.

Chrismaths

Irrespective of the relative cost merits of SIPPs and Personal Pensions, I'd personally be willing to pay a bit more to avoid the evil clutches of the incompetents at the major insurers - whether I was going for a SIPP or PP. Having dealt with both insurers and specialist SIPP houses, the level of technical ability and customer service at the specialist knocks anything from an insurer into a cocked-hat.

Sometimes cheapest isn't always best...

dunstonh

EdInvestor wrote:

I find it a bit difficult to imagine how this could happen frankly.

I dont.

I see that as one of the biggest potential mis-selling areas (or misunderstood) when you get inexperienced investors being told to go into a more complicated investment product.

EdInvestor

Oh I see, you're talking about mis-selling.
:rolleyes:

dunstonh

No different to what you are doing when telling inexperienced investment individuals to go with a SIPP. Do you think they will all continue to buy investments with their regular contributions?

SIPPs, particulary with regular payments, require the individual to do some work every few months. Whilst some may have that discipline, many will not and it will be those that lose out and would have been better off with a stakeholder or personal pension.

EdInvestor

SIPPs, particulary with regular payments, require the individual to do some work every few months

Depends on the provider and what you want to invest in. Each Sipp is different.Some enable people to set up a direct monthly investment straight into a fund. But my experience of Sipp investors so far is that they're very keen to take control of their money and invest it themselves.

Hence I find it what you say a little odd, unless you think Sipps will become just another example of advisor transfer churning where the poor mug punter is not even told what a Self Invested personal pension involves.

If the industry invents a new product which uses the Sipp name but has none of its features, is this not also likely to mislead?

As usual, investors are advised to DYOR and inform themselves of at least the basics, preferably before consulting an advisor, so you have some idea whether or not the advice you get is any good.

whiteflag_3

EdInvestor wrote:

As usual, investors are advised to DYOR and inform themselves of at least the basics, preferably before consulting an advisor, so you have some idea whether or not the advice you get is any good.

But isnt that the problem with your posts ED.

People may use this site to do as you suggest and do some research yet even when an advisor posts some factually correct info, (for example the fact you can get a PP with amc of less than 1%) you then come on and contradict it. How is this meant to help people doing their own research

I think you should consider the implications of your posts sometimes, as you seem to assume everyone on here has very little knowledge yet you continually push ( against board rules btw) complicated products.

I think Kitties recent posts re her new Sipp demonstrate how people can be easily misled.

EdInvestor

People may use this site to do as you suggest and do some research yet even when an advisor posts some factually correct info, (for example the fact you can get a PP with amc of less than 1%) you then come on and contradict it.

I did not contradict what the poster said.I simply said that it was expensive, like most pensions.And so it is.Why do you think the Pension Commission has come out with a massive report recommending a national pension scheme with an annual charge of 0.3% ? It's because current charges are too high for people to save enough.

Sure 0.9% is lower than 1.5%, the standard stakeholder charge, which eats up as much as 30% of your fund over 25 or 30 years.

But it's still high. And that's what I said.

High charges are normal for pensions.

dunstonh

I did not contradict what the poster said.I simply said that it was expensive, like most pensions.And so it is.Why do you think the Pension Commission has come out with a massive report recommending a national pension scheme with an annual charge of 0.3% ? It's because current charges are too high for people to save enough.

Sure 0.9% is lower than 1.5%, the standard stakeholder charge, which eats up as much as 30% of your fund over 25 or 30 years.

But it's still high. And that's what I said.

High charges are normal for pensions.

How do you live?

I dont understand how you can go shopping and buy things with that attitude. You must go into supermarket and leave with nothing because the supermarket makes a charge. Goodness, how dare they make a charge for providing that service.

Why do you think the Pension Commission has come out with a massive report recommending a national pension scheme with an annual charge of 0.3% ? It's because current charges are too high for people to save enough.

Why do you think that the Govt shelved it at that rate? Because its not achievable. Nowhere in the world has anyone managed to get it that cheap. The cheapest is 0.6% which isnt that far removed from the 1.0% that is common with stakeholder or 0.7% that is easily achievable for longer term pensions with financial advisors.

The only way 0.3% would work would be if the Govt paid for the administration. That would mean we end up paying for it in increased taxation.

EdInvestor

I dont understand how you can go shopping and buy things with that attitude. You must go into supermarket and leave with nothing because the supermarket makes a charge.

Like everyone on this site (I think ) I seek value for money.There's no problem with something being expensive, indeed a luxury, if I want it and I can afford it, and it is a quality, value for money product. I am not recommending things simply because they are cheap - though there are one or two reasonable cheap investment options which will suit some people.Nor would I shy from recommending something expensive if it was likely to be a top performance product (though there's no harm in seeing if you can get it at a discount...surely that's the basis of MSE? )

You are saying that conventional pensions are expensive, but they are worth it.I am saying that conventional pensions are usually not value for money for basic rate taxpayers, but that if you hunt around and look at other options you may be able to find a pension which IS value for money.

I am saying that there is a bit of work involved in this - you must DYOR.I try to help people by giving them some tools to inquire themselves.In this way, they will also hopefully learn more about the good and bad points of investing.

Advisors on this site should not take what I say personally.:A

I am sure that you personally are an excellent IFA who gets his clients into value for money investments all the time.But you know as well as I do that there are many advisors out there who do not do this - starting with advisors in banks and chains, which you yourself tell MSE posters to avoid.

My organisation believes the financial services industry needs reform.*This should be self - evident, given the enormous number of people who have been mis-sold pensions and endowments alone. We also believe that a major part of any change for the better involves investor education, and this is where sites like these have a big role to play.

Investors need to know a lot more about risk, about the difference between tax wrappers and the investments within them, about charges and how to reduce the effect of them, and about how to evaluate the quality of advice they receive.

The more informed the investors, the better is likely to become the quality of the advice they are given.:)

Right?

*Anyone who is in any doubt about this should read this absolute hoot of a thread in which all the advisors on the site try and figure out what the rules mean in their own industry, and whether fees are good or bad. :rotfl: :rotfl: