Pension fund going down the pan

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EdInvestor wrote: »

That's a ridiculous comment.The concepts underlying pensions are some of the most complex in personal finance.Virtually nobody understands the state second pension for instance..

Investment is not that difficult to grasp - and when it comes to the point, that's all you're doing with a pension, investing money for your retirement. Most people could prpobably cope with straightforward investment (eg in a stocks and shares ISA) with quite a short time of study.

But anyone who has ever started to look into the regulations covering pensions soon realises that they are a completely different ballgame.

It is not at all surprising that most people give up.

But they are simple ED

Its only people like you who constantly push SIPPS that make them complicated.

IFAs can understand pensions so they cant be complicated;).

The_Economist

bendix wrote: »

Let me get this right. You call yourself The Economist, yet you get your pension education off shoddy ITV journalism designed to pander to the herd mentality.

Could I suggest you change your nick to Hello or Daily Sport, perhaps?

:rotfl::rotfl::rotfl: No bendix i am a little more intelligent than that (at least i hope i am). If you had seen it you might have a better
understanding where i am coming from.

DD4

I saw it and thought it was pretty poor journalism. There was one bloke who was coming up to retirement and lost a bundle on his Money Purchase pension because he had his money invested in equities. Quite simply, he should have been moving from risky equities and into bonds and cash at least 5 years before his intended retiring date. It was his bad management of his own pension that caused the problem. What was annoying is that an opportunity to educate people about pension/investment strategies was lost.

Other people were investing £100pm and expecting to retire on a Kings ransom, again the program could have provided examples of how much people have to invest in order to retire comfortably.

Still, all of the above information is easily available on the internet or financial press. All people have to do is expend a few hours of effort to educate themselves, but it seems like just too much effort for many people. That guy who was looking to retire had £70k invested. I'm sure if that was in his bank account he'd pay it far more attention and make sure it was in the highest paying deposit account he could find. Just because pensions are a little more remote doesn't mean you forget about them and just 'hope for the best'.

bendix

DD4 wrote: »

I saw it and thought it was pretty poor journalism. There was one bloke who was coming up to retirement and lost a bundle on his Money Purchase pension because he had his money invested in equities. Quite simply, he should have been moving from risky equities and into bonds and cash at least 5 years before his intended retiring date. It was his bad management of his own pension that caused the problem. What was annoying is that an opportunity to educate people about pension/investment strategies was lost.

Other people were investing £100pm and expecting to retire on a Kings ransom, again the program could have provided examples of how much people have to invest in order to retire comfortably.

Still, all of the above information is easily available on the internet or financial press. All people have to do is expend a few hours of effort to educate themselves, but it seems like just too much effort for many people. That guy who was looking to retire had £70k invested. I'm sure if that was in his bank account he'd pay it far more attention and make sure it was in the highest paying deposit account he could find. Just because pensions are a little more remote doesn't mean you forget about them and just 'hope for the best'.

Precisely.

And the criminal aspect of it is is that such a tv program will put unthinking people off pensions as a result of that shoddy journalism which does nothing more than pander to the masses' lack of curiousity.

Which brings me right back to The Economist . . . . .

dunstonh

I saw it and thought it was pretty poor journalism. There was one bloke who was coming up to retirement and lost a bundle on his Money Purchase pension because he had his money invested in equities. Quite simply, he should have been moving from risky equities and into bonds and cash at least 5 years before his intended retiring date. It was his bad management of his own pension that caused the problem. What was annoying is that an opportunity to educate people about pension/investment strategies was lost.

That happens every time on these programmes. Panarama's version last year was flawed the same way.

Other people were investing £100pm and expecting to retire on a Kings ransom, again the program could have provided examples of how much people have to invest in order to retire comfortably.

Again, a common one and one that was in Panarama last year.

And the criminal aspect of it is is that such a tv program will put unthinking people off pensions as a result of that shoddy journalism which does nothing more than pander to the masses' lack of curiousity.

It is a disgrace that the media can present the information in such a negative way without actually going into the reasons why, how and ways to avoid in future.

We have already had a couple of posters talk about stopping their pensions based on this programme and the alternatives they mention are worse than what they have. The programme is destructive and designed to scaremonger. Although that can be said for any subject that they cover.

bendix

On the upside, dunstonh, the more idiots there are deciding to cancel their pensions and planning to be poor in retirement, the richer those of us who actually use their brains will seem by comparison.

If i was planning to retire in England (which I'm not), I would have great delight in offering The Economist a part-time job mowing my lawns.

purch

Probably the biggest mistake the OP (and others) has made/makes is only thinking about the Pension when the annual statement drops through the letterbox.

By then it's too late, and another mistake the OP has made is thinking that the value on that statement is anything like the current value.

Normally the values stated are months out of date, which is why the OP doesn't even realise that his pension fund has recovered quite a bit recently.

bendix

Too true, purch. Managing your pension fund by annual statement, is like navigating a ship by standing at the back of it, and watching where you've come from using a telescope.

DiggerUK

The public is starting to realise that handing over your money to pension funds, in the hope that by the time they are 55, you can have financial security in retirement, is a lot of stuff and nonsense.

The mantra that pensions are a good thing, comes from the days when I started work and nearly all pensions were final salary or defined benefits. I began life as an engineer and had such a pension, at 2% contribution.
Those were pensions worth having.

What other financial product asks anybody to invest, on the basis that you hand over control of your money till you are 55, can never change your mind, and don't get any guarantees of your returns. You'd be bonkers to invest.

It's over for the pensions industry, read the writing on the wall, read the posts that keep coming up here. There are a plenty of alternatives to provide for financial security in retirement.

dunstonh

The public is starting to realise that handing over your money to pension funds, in the hope that by the time they are 55, you can have financial security in retirement, is a lot of stuff and nonsense.

i dont think they are. There are far to many that seem to think that paying £25-£50pm is going to allow them to retire at 55 on £20k a year.

What other financial product asks anybody to invest, on the basis that you hand over control of your money till you are 55, can never change your mind, and don't get any guarantees of your returns. You'd be bonkers to invest.

That is trade off for getting tax free growth and tax relief on contributions. If you dont like it then dont use the pension. Use an ISA instead. However, be prepared to have to pay more into the ISA to make up for the lower income you will get.