Pensions

Old_Slaphead

IveSeenTheLight wrote: »

So how do other people gaurantee a decent pensionable return?

Work hard, save/invest as much as is reasonable (commensurate with the lifestyle you would like to achieve), take an interest in your investment (charges, performance, business environment/confidence etc), don't believe what anyone tells you (if you can see a bandwagon then chances are you'll have missed it) and pray that there's not a Labour government in power when you decide to retire!

IveSeenTheLight

Old_Slaphead wrote: »

Work hard, save/invest as much as is reasonable (commensurate with the lifestyle you would like to achieve), take an interest in your investment (charges, performance, business environment/confidence etc), don't believe what anyone tells you (if you can see a bandwagon then chances are you'll have missed it) and pray that there's not a Labour government in power when you decide to retire!

Thanks,

While I understand the philosophy of working hard and save / invest as much as is reasonable, this still does not seem to provide a gaurantee of what the oension will be worth in the future.

I watched a TV program this year in which Martin Lewis looked into peoples pensions and it was quite shocking really.
Even with all the regulations in place, there seemed to be a very gloomy outlook for these people investing in pensions.
One guy had been massively paying into a pension for years and when he received his statement of what he could receive from all the years investments, it was a fraction of what he expected.

I've also seen companies who have pension defecits and no real future as to how they will be able to afford their deffered pensioners going forward.

The problem partially is that with life expectancy increasing, the amount a pension has to pay out also increases, such that the holders of the pensions reduce the payments to cover the longer lifespan.

I'd be genuinely interested to hear from anyone (other than final salary schemes which were in part a gaurantee of a final return) who received the pension they expected.

For me it seems far too volatile

Pobby

Right now the only return that I can see that is semi decent is to take my non pension plan part of my funds and buy a couple of flats and look only for yield.

On a personal moral stand point it is not something that I would want to do to say nothing of the hassle it would involve. The yield should be around 7%.

chucky

Graham_Devon wrote: »

Got a child on the way so that will put things back further.

nice work Graham!! :beer:

chucky

Harry_Powell wrote: »

The disadvantages of using ISAs for retirement are that you are missing out on the tax rebate (20% for lower rate tax payers), ISAs are means-tested for benefits (pensions are not) and if you go bankrupt your ISA savings will be taken away to repay the debt, whereas pensions are untouchable.

The other disadvantage is that you can 'dip' into them whenever you like and use the money for non-retirement purposes.

couldn't you not pay the ISA amounts into a pension if and when you become 40% tax payer - that way it's better than just getting the 20% tax relief. is that still around?

the reason i like the ISA's is that they don't attract any charges like pensions do.

Old_Slaphead

IveSeenTheLight wrote: »

Thanks,

While I understand the philosophy of working hard and save / invest as much as is reasonable, this still does not seem to provide a gaurantee of what the oension will be worth in the future.

I watched a TV program this year in which Martin Lewis looked into peoples pensions and it was quite shocking really.
Even with all the regulations in place, there seemed to be a very gloomy outlook for these people investing in pensions.
One guy had been massively paying into a pension for years and when he received his statement of what he could receive from all the years investments, it was a fraction of what he expected.

I've also seen companies who have pension defecits and no real future as to how they will be able to afford their deffered pensioners going forward.

The problem partially is that with life expectancy increasing, the amount a pension has to pay out also increases, such that the holders of the pensions reduce the payments to cover the longer lifespan.

I'd be genuinely interested to hear from anyone (other than final salary schemes which were in part a gaurantee of a final return) who received the pension they expected.

For me it seems far too volatile

Well there we have it - the nub of what I've been saying for years (get ready for rant....).

Pension apartheid.

Some of the country have no worries with their taxpayer-funded, guaranteed, idex linked schemes whereas for the rest of us it's sleepless nights, fingers crossed and hoping the pittance we've carefully saved isn't going to miraculously disappear overnight, snaffled by greedy government, advisers or a volatile investment.

nb - the blokie on Martin's prog wasn't saving half enough to meet his (unreasonable) pension expectation - also, he obviously didn't keep much of an eye of it if it came as such a shock (ie presumably he didn't read his annual statements or didn't take an active interest).

Old_Slaphead

chucky wrote: »

the reason i like the ISA's is that they don't attract any charges like pensions do.

Says who ?

chucky

Old_Slaphead wrote: »

Says who ?

says me

my iii stock and shares ISA attacts no maintenance or fund charges like a pension would.

i work on a percentage profit from each stock minus any transaction charges.

chucknorris

A few weeks ago I modelled paying into a pension sipps and compared it to a non pension investment, even with 40% tax contribution, after 10 years investment then taking out an annuity it still took a further 26 years for the pension to catch up with the non pension investment (by catch up I mean become worth more than the capital of the non pension investment). So 36 years in total!

So although I anticipate to live over 36 years (I'm 51, if I don't live that long then it's irrelevent anyway) I decided not to invest in a pension, I just do not think it's worth it from an investment point of view.

It is probably worth it for someone who might be concerned about having an income, but for me the pension would just be an additional investment, on top of my original retirement plan. The reason I am posting this is here is to see if someone can flaw my logic, if they did then I would look at pensions again.

Mini_Bear

This word pension annoys me, at 24 i am saving every penny towards owning a home (i hav a small company pension for last 2 yrs).
It does seem that you spend your whole life tryin to get mortgage free only to have the only real asset u own taken away if you become too ill to care for yourself as you get older.
it is frightening how few people i kno have any savings let alone pension planning.
like others it seems like the best thing to do is to hav a diverse mix of savings both within and outside the pension wrapper, and soon as more of my salary goes over the higher rate threshold i will contribute more to a pension to make use of the 40% tax back, until then i will put it in s&s isas and high interest savings accts.
i dont the govt is doing a bad thing with the 2012 pension reforms, i think its going to force a lot of people to consider their retirememnts and potentially save for the first time. i imagine the general consenus is "i will get a full state pension in my old age and be well looked after by the benefit system".
i wonder what the tories will make of it?!