Pensions

CLAPTON

zygurat789 wrote: »

Quote:
Originally Posted by CLAPTON
so a weekly income of 130 is

-a yearly income of 6,760
plus you would get council tax paid ... say 100 per month = 1200 per annum
plus rent at lets say 600 per month i.e. 7,200

so if you were earning you would need 15,100 take home

which equates to about 19,000 per annum

how much do you earn at the moment?



I make it £16,500 Thats a significant difference.

make what 16,500?

dunstonh

ou used to see these cheques arrive from the pension companies, for pitiful amounts really. The people in the home really believed they were saving towards a significant nest egg.

The problem they need to address is trust. You have to believe that if you contribute X every month that it will provide a predicted return.

It is a common problem with pensions. Its the not the tax wrapper itself that is at fault though. The problem is that people seem to believe that paying £50pm for 20 years will give them £500pm for 25 years in retirement. The expectations are totally unrealistic.

The other big problem is that someone may have started with a decent amount in 1988. Say £50 but is still paying £50. Despite £50 no longer having the same spending power. They forget to increase their contributions to take account of inflation.

The fact is that the earlier someone starts the cheaper it is for them each month. An 18 year old could get away with around £40pm net with RPI indexation and get around £10k a year

Oh, another problem is that many self employed dont realise they are going to get less state pension than an employed person.

Imho the interest gain does not justify the risks. There are plenty of horror stories about returns turning out to be nothing like they were promised or even worse, the company going tits up and you losing the lot.

Pensions dont make or lose money. They are just a tax wrapper that contain your chosen investments. You also cannot lose the lot with most personal pensions (especially unit linked). No Personal Pension has gone tits up and the way they are structured under trust and most are ringfenced, they cant go tits up.

chucknorris

dunstonh wrote: »

It is a common problem with pensions. Its the not the tax wrapper itself that is at fault though. The problem is that people seem to believe that paying £50pm for 20 years will give them £500pm for 25 years in retirement. The expectations are totally unrealistic.

The other big problem is that someone may have started with a decent amount in 1988. Say £50 but is still paying £50. Despite £50 no longer having the same spending power. They forget to increase their contributions to take account of inflation.

The fact is that the earlier someone starts the cheaper it is for them each month. An 18 year old could get away with around £40pm net with RPI indexation and get around £10k a year

Oh, another problem is that many self employed dont realise they are going to get less state pension than an employed person.



Pensions dont make or lose money. They are just a tax wrapper that contain your chosen investments. You also cannot lose the lot with most personal pensions (especially unit linked). No Personal Pension has gone tits up and the way they are structured under trust and most are ringfenced, they cant go tits up.

Hi Dunstonh, I didn't realise you came over to this board.

I think you are correct people don't tend to put a great deal of thought into it or better still seek advice as to how much to invest for what pension income that they want to achieve.

Old_Slaphead

treliac wrote: »

Depends what you mean by old, Old Slaphead. When I say enjoy holidays and the like, I mean before you're out of your 70's because, hopefully, you are still fit and young enough to do so.

For very many people the balance tips once the 80's are reached and increasing frailty and poor health frequently mitigate against being able to enjoy those activities. However, for the elderly not able to afford important things such as heating etc, there are the necessary benefits and services in place.

And thanks for the suggestion but I do get out plenty and I can assure you I know what I am talking about.

Fair enough.

I took your original posting paraphrased "spend it it now while you're young enought to enjoy it. Don't save into your retirement" as not to include all those 60-79 year old who are still at work and fretting what they'll do to fund their skiing holidays at 80+

My mistake - please accept my apologies.


Given that the current state pension is hardly generous but likely to be reduced in future years, I take it that you're comfortable that today's relatively hedonistic & affluent society be further supported by future indigent generations.

chucknorris

Old_Slaphead wrote: »

Fair enough.

I took your original posting paraphrased "spend it it now while you're young enought to enjoy it. Don't save into your retirement" as not to include all those 60-79 year old who are still at work and fretting what they'll do to fund their skiing holidays at 80+

My mistake - please accept my apologies

Try telling that to Nick:

http://www.natives.co.uk/do/ecco.py/view_item?listid=9&listcatid=39&listitemid=11784

dunstonh

Hi Dunstonh, I didn't realise you came over to this board.

I dont normally. I just saw the thread title as the latest thread on the main forum list and thought "whats that thread doing in there".

There is a lot of misformation and myth in some of the posts in this thread. I dont want to give the indication that the pension tax wrapper is perfect, far from it. However, anyone reading some of the early posts in particular need to be wary about what they read

You could add another problem with pensions to my post above in that many people dont understand them and dont want to understand them. Some just prefer not to like them with no valid reason.

I saw someone not too long back who said their works pension was rubbish. I asked him why he thought that and he said all his friends at work said it was and they hadnt joined. I got the scheme details and it had a 7% employer contribution with a 3% from employee. It was a great scheme and he and his friends were missing out on that free money because of a bad workplace myth. That is a scenario you often come across.

chucknorris

dunstonh wrote: »

I dont normally. I just saw the thread title as the latest thread on the main forum list and thought "whats that thread doing in there".

There is a lot of misformation and myth in some of the posts in this thread. I dont want to give the indication that the pension tax wrapper is perfect, far from it. However, anyone reading some of the early posts in particular need to be wary about what they read

You could add another problem with pensions to my post above in that many people dont understand them and dont want to understand them. Some just prefer not to like them with no valid reason.

I saw someone not too long back who said their works pension was rubbish. I asked him why he thought that and he said all his friends at work said it was and they hadnt joined. I got the scheme details and it had a 7% employer contribution with a 3% from employee. It was a great scheme and he and his friends were missing out on that free money because of a bad workplace myth. That is a scenario you often come across.

That's the deal my wife (an actuary) is on, I think it's a great deal, but the you would expect an actuarial practice to offer a good pension scheme.

kabayiri

dunstonh wrote: »

There is a lot of misformation and myth in some of the posts in this thread. I dont want to give the indication that the pension tax wrapper is perfect, far from it. However, anyone reading some of the early posts in particular need to be wary about what they read

I don't think its misinformation or myth when people relate their own experiences of people having received a pretty bad deal. These experiences are based on fact.

To extend these experiences and say pensions are therefore bad is of course not sound. We all make our own value judgements and live with the consequences.

You can not deny though that the pension process is seen as some complicated subject matter, which only the professionals understand. This is a problem of perception more than anything.

My original comment was about the 2012 story linked to. It just seemed as complicated as ever, with ifs and buts.

abaxas

A few months ago, R4 has a programme on pensions.The main synopsys was that 1% fees is eqivalent to all the tax rebate on contributions but always take enployers contributions.

And yes, they agreed, most pensions were a 'con' as they only filled the pockets of those selling them.

kabayiri

Let's look at it another way.

Why don't we make it cheaper for pensioners to live? That way, your average pensioner would not need vast amounts of money for a comfortable existence.

My father and other pensioners near him don't seem to be worrying about the prices of cruises, and new cars. The topic is usually the cost of food, electricity and heat.

My biggest concern going forward is council tax. It has doubled over the last decade. At that rate it will be very expensive in a couple more decades.