Repensioning. Increase your pensions return without any risk discussion area

dunstonh

As for the lower risk fixed interest funds (gilt & cash funds) would it be possible to get these in a stakeholder package or only in a sipps package?

Stakeholder will usually offer 1-2 fixed interest funds and a cash fund. Personal pensions will usually offer between 3-4 fixed interest funds, fund supermarket pensions and SIPPs will have a wider access but you will pay more in charges (assuming funds).

EdInvestor

silentotter wrote: »

My employer simply stated that as a couple we would still be entitled to the state pension upon reaching pensionable age. That I think at the moment is £86 per week per couple.

The full basic state pension is currently £87 per week per person. State pensions are payable on an individual basis. If your wife has no entitlement to a state pension because she has not worked, then she can get a pension of her own based on 60% of your contribitions.

More information from https://www.thepensionservice.gov.uk

There are actually 2 state pensions so suggest you check - perhaps you will be due more than you think.

stphnstevey

What sort of % discount can these discount providers give?

nealh

Like many people I was shocked to find my PP at L&G is worth lees than I put in it after 10 years!
However I am assured that as I purchased direct from L&G there is no 'missing pot of gold'. I pay 4% upfront charge on investment, 0.5% per year plus £1.50 per month fee.

Is this true?
As most of the funds are trackers 0.5% is excessive but what can I do?
Cash Funds
Also, like many others I suspect, I invested in the cash fund last year, to reduce risk of turmoil in the markets. L&G have made 5% this year out of me and I have lost money. Can I claim? Their description implies the investment is low risk and in bonds but it is actually put in overnight deposits!

This company makes £400 a year in charges out of me and I get nothing back!
Without the tax relief the investment would be negative. Am I alone in thinking pensions are a massive scam?

dunstonh

Like many people I was shocked to find my PP at L&G is worth lees than I put in it after 10 years!

a) why are you shocked?
b) its quite possible if you invested in say 100% FTSE tracker given the last 10 years we have had.

L&G have made 5% this year out of me and I have lost money.

L&G offer the pension wrapper. The container to hold your investments. The investments you choose make or lose money. Not L&G.

lso, like many others I suspect, I invested in the cash fund last year, to reduce risk of turmoil in the markets. L&G have made 5% this year out of me and I have lost money. Can I claim?

Now we see why you lost money. You moved to cash last year when you shouldnt.

Standard Life made a mess with their cash fund marketing and they had to repay money. However, whilst L&Gs cash fund did suffer a loss, there is no indication yet that there is anything wrong with that as they didnt market it as a secure fund but as a low risk fund.

This company makes £400 a year in charges out of me and I get nothing back!

You make the investment decisions. Not L&G.

Without the tax relief the investment would be negative. Am I alone in thinking pensions are a massive scam?

How do your investment decisions make pensions a massive scam? A pension has the same investment options as other tax wrappers and most conventional unwrapped investments can be placed in a pension as well. The returns are down to your decisions that you make.

jamesd

nealh wrote: »

However I am assured that as I purchased direct from L&G there is no 'missing pot of gold'. I pay 4% upfront charge on investment, 0.5% per year plus £1.50 per month fee.

That level of charges can be improved on, easily. Buying direct just means you lose any chance of getting the discounts that are readily available if you don't go direct.

nealh wrote: »

As most of the funds are trackers 0.5% is excessive but what can I do?

You can switch to another pension if you like. Transferring is usually easy. You should be able to get 0% on money going in and 0.5% a year annual charge by the investments if you shop around and don't get investing advice.

nealh wrote: »

Like many people I was shocked to find my PP at L&G is worth lees than I put in it after 10 years!
Cash Funds
Also, like many others I suspect, I invested in the cash fund last year, to reduce risk of turmoil in the markets. L&G have made 5% this year out of me and I have lost money. Can I claim? Their description implies the investment is low risk and in bonds but it is actually put in overnight deposits!

Say more about this cash investment. What one was it exactly - precise, complete name and/or URL to a page describing it? How did it cost you 5%?

Overnight deposits are lower risk than bonds, so that part of any description was correct if they wrote it, though money market isn't quite the same thing. Either is a bit higher risk than savings accounts, including term deposit accounts.

It's not completely impossible that you have some claim, can't say without seeing more of the description. But whatever it did, it did far less harm to you than you did to yourself.

nealh wrote: »

This company makes £400 a year in charges out of me and I get nothing back! Without the tax relief the investment would be negative. Am I alone in thinking pensions are a massive scam?

You're not alone but you should be looking in the mirror. You screwed up and cost yourself the 50+% growth that happened in the major world markets over the last year. Really, really bad move, one of the great mistakes of your investing lifetime. The last year was a superb one for investments, possibly the best one that you or I will see in our investing lifetimes. You badly screwed up by moving into cash and staying in cash.

What I suggest you do is visit unbiased.co.uk and find an IFA. Pay the IFA 0.5% a year to actively manage the investments for you and be sure to explain what you did over the last three years and why so the IFA can choose a mixture of investments that is less likely to cause you to do it again in the future.

You were far from alone, though - consumers in general are renowned for doing things like this. It's one major area where an IFA can help to prevent people from shooting themselves in the foot. It'll take a while to recover from making such a bad mistake but hopefully you do have time for it.

There's little point in you using ISAs instead, because the big problems here were:
1. You making horribly bad investment decisions.
2. You buying the pension in what is usually the most expensive way to buy it, direct.
You can make those same mistakes inside or outside a pension. Your biggest likely way to improve your investment performance is to get yourself out of the detailed investment decision-making.

Or perhaps to learn more about investing. If you've read this post and recognise that you screwed up rather than being annoyed at me for telling you that you did, there's hope. If you're annoyed at me for writing it then best to go with the professional because you still haven't learned enough to do it yourself.

nealh

Thanks for your responses which are valuable. However I cannot agree that my investment decisions have been so poor. It is however true that a big chunk of money went in in 2007 (£28.5k) but that is due to personal circumstances (eligible income) as much as anything
I believe this pension is typical of most PP products. I.E. a limited range of funds (21, almost all equity). I can make only one free shift in allocation per year, anything else is 3% (see below).
It was only my post Christmas 2009 investments (£11k)that went into cash, all investments prior were in equity funds. I accept that the last collapse represented a 'buying opportunity' but at the time we were told the world was on the brink of melt down? So the Jan 2009 value was £90k split in order of value UK index £56k, Cash £11k, Managed, Far East, US Index, UK recovery, Europe Index, Japan.
The bid offer difference is 5% but any investment is made at 102% so I am paying over £3% 'initial charge'. This is why the cash fund actually lost money.
I am especially grateful to JamesD although I really would like to know how much buying via an adviser would 'save' me? All SIPPS certainly seem to have higher charges than my fund. We are continually being told that 'active' is no better than index in the press but there seems to be a real problem in getting true facts on investment performance.

DelaDela

Off track just a tad ................... I really want to start a pension for my son, aged 21 ...........who appears not to be too keen on the, 9>5X5
I am concerned that in 10 years he will still find travelling between Albania and Moldova, awfully interesting........
So for say, £50.00 - £100.00 a month is there a good pension I could set up in his name ??? or would I be better off
1. Putting it in a cash ISA ???
2. Taking myself to a dark corner and having a stern chat with myself ???

dunstonh

So for say, £50.00 - £100.00 a month is there a good pension I could set up in his name ??

at 21 that isnt bad but you should be aiming to get him to pay towards the £100pm.mark. Many pensions now have £100pm as their minimum contribution level. So, you can see what is considered the minimum there. Stakeholder pensions will go to £20pm but planning half heartedly isnt going to teach him much. That £20 minimum was set 20 years ago and many said it was too low back then. Now it is just pathetic and should be at least £50.

or would I be better off
1. Putting it in a cash ISA ???

He can spend that and cash is higher risk over the long term.

2. Taking myself to a dark corner and having a stern chat with myself ???

If you cannot persuade him that may be the outcome

jamesnc

Hi

I currently have a fidelity SIPP set up directly with fidelity (no IFA involved) which means there are no charges for starting the & no ongoing administration charges.

I have noticed Cavendish Online give you back all the commission they earn but they have charges for running the Fidelity SIPP account as shown on their Fidelity SIPP charges page

http://www.cavendishonline.co.uk/pensions/sipp_charges.php

"Fidelity's Fundsnetwork has three charges as detailed below, the initial charge, the yearly administration charge and the annual management charge of your underlying fund."

Fidelity's SIPP arranged directly with them:

https://www.fidelity.co.uk/investor/products-services/sipps/default.page?whereParameter=templatedata/content/generalcontent/data/investor/direct/sipp/great-value

No SIPP set-up fee
No annual SIPP administration charge for the life of the plan
No fee from Fidelity for transferring your other pensions. We now accept many types of occupational pensions too †
0% initial charges on all funds*
Free unlimited online switching, between all the funds, including a cash option*
Standard annual management charges apply.


Does it make sense to re-pension my SIPP with Cavendish when there are appears to be no annual administration charges with Fidelity but there seems to be charges with Cavendish?

Not sure what to do as they don't make it very clear to make the comparison on the cavendish site?

Thanks for anyone who has information re this. :-)