Which is best Pension provider?

jem16

sandsy wrote: »

This ongoing bickering really isn't helpful at all to the OP who simply wanted a bit of guidance on what to do/where to go - and has received really very little.

Unfortunately what the OP needs is more complicated than what can be provided on a forum.

The main advice is pretty clear - take the employer's contribution but seek proper professional and independent advice for any further investing as there is no one best fit for all.

dunstonh

peter, the reason you may see our comments as being negative is that you dont appear to actually be reading them but continue posting things which dont apply nowadays. That is frustrating to those of us responding try to balance our your comments which do, as someone put it earlier, come across as tin hat style.

You have old fashioned products but seem to want them to work like modern ones. If you bought an Austin Allegro years ago you wouldnt expect it to have anti-lock brakes, power steering and all other modern features. Equally, you dont buy an Austin Allegro and expect it to be as fast as a ferrari.

Your choice would be to modernise or stay put. If you stay put then constantly complaining that the old product doesnt do things the modern ones do is pointless. If you dont like what you have then change it.

peterbaker

Nope, I disagree that pensions like I bought were ever designed for changing.

If the provider changes it unilaterally, be it on their head.

How many of your clients will be have to be approached by AXA before they can sell to Resolution?

Because I generally do not follow the crowd in accepting that the providers have a right to make whatever changes they feel like, I think perhaps I might be in a far better position with my inherited estate rights intact with AXA than anyone who took the cheap bribe 10 years ago and transferred into something "modern".

I'd be interested to know what you think about the chances of a special bonus offer to those few of us AXA WP clients who don't accept cheap bribes?

dunstonh

Nope, I disagree that pensions like I bought were ever designed for changing.

They weren't designed for changing. That is why became obsolete and why investigating modern options should be done.

How many of your clients will be have to be approached by AXA before they can sell to Resolution?

None. Although it wont make a jot of difference to those few I have with AXA.

I'd be interested to know what you think about the chances of a special bonus offer to those few of us AXA WP clients who don't accept cheap bribes?

I have no crystal ball and anyone who expects an adviser to have one is wrong. However, unless there are contractual reasons or costs involved which negate the benefit of moving it, I would have my money out in a shot. I wouldnt be banking on any special bonus of note.

I think perhaps I might be in a far better position with my inherited estate rights intact with AXA than anyone who took the cheap bribe 10 years ago and transferred into something "modern".

Post 2001 is when the more modern plans started with the introduction of rule RU64. However, you have had another batch of plans come out in recent years with even lower charges and more investment options and offering the wider range of income options. Those that did move after 2001 were nearly always put into plans that had no transfer penalties allowing them to move around without incurring costs.

Not all legacy plans are bad. Some of valuable guarantees where the value is not in the rate of return. Indeed, some of them dont make anything. The value is in the Guaranteed annuity rate or guaranteed minimum maturity value (or both if you are really lucky). On Section 32 plans, the GMP can often be where the value is.

Seronera

Peterbaker is clearly a very angry man, but I think he has some valid points that the pensions industry simply has no answer for. I'd ask some other questions as well

1) Are pensions good value for money? Not really. You may get your tax relief but the fund growth is then hammered by charges regardless of fund. Warren Buffets directly invested fund has outperformed similarly invested pension money by a factor of 10. Even the 'low cost' stakeholder plans are costly in the long term, though far better than the old style plans with their 'capital units' that fleeced you and paid a lot of commission

So, if the boss is going put 3% into the pension for you, then take it, its free money. If however you wish to save a decent sum, and can be disciplined enough not to touch it (difficult!!) then go with a very low charges investment trust savings plan of some kind (seek advice from a stockbroker.IFAs wont get paid much unless they are fee chargers)

2) Whats the point of an annuity? (which is what your money has to buy when you retire) Well, not a lot at present when you save..lets say...£100,000 ....I know, its a lot of dosh to save, and then you get an income at 65 of about 5,000 a year, and a lot less if you build in inflation protection indexing... Its not a lot is it?

I met an old buffer in his 80s the other day, and he was so relieved that when he retired the annuity rate was 14%, and not less than 6% like today. So today you have to save more than double what you did 20 years ago to get the same pension...ridiculous...and all because MOST people have to buy a ruddy annuity.

As for your husband, well by law his employer (in the UK I assume) has to offer a group stakeholder scheme to his/her empoyees (unless he is a very small employer), but is not obliged to put any money in.

I'm disgusted with pensions as not only do I have to pay for my own pension..a piddling money purchase scheme with no guarantees or indexation into which I have managed to save about £60,000 so far (9 years to go) but I have to pay for the gold plated pension of public servants who get guaranteed and index linked pensions, and they still bloody well moan.

Trouble is, Joe & Josephine public are between a rock and a hard place. Its is however an almost racing certainty that if you are young and have 25+ years to save, then you will mostly likely do better in you own stockmarket based savings plan (not an insurance saving plan) bought through a stockbroker, and investing directly into a diversified investment trust, than putting it into a pension. The ongoing managment charges on the pension mean it just cannot compete for value for money. There are no guarantees by the way, but I guess you have gathered that.

Seronera

dunstonh

1) Are pensions good value for money? Not really.

Pensions dont typically cost anything. Nowadays they are just a wrapper that is thrown around your investments. So "value for money" isnt really applicable.

You may get your tax relief but the fund growth is then hammered by charges regardless of fund. Warren Buffets directly invested fund has outperformed similarly invested pension money by a factor of 10. Even the 'low cost' stakeholder plans are costly in the long term, though far better than the old style plans with their 'capital units' that fleeced you and paid a lot of commission

Hammered by commission 10-20 years ago maybe but not today. They could get away with 3% a year 20 years ago but today its much closer to 0.3% to 1.5%. Warren Buffet says one thing but his own investment strategy is different to what he says. He buys shares on value. Not on low cost.

Stakeholder pensions are not low cost. They were 10 years ago when introduced but things have moved on now and personal pensions are cheaper for the majority.

2) Whats the point of an annuity? (which is what your money has to buy when you retire) Well, not a lot at present when you save..lets say...£100,000 ....I know, its a lot of dosh to save, and then you get an income at 65 of about 5,000 a year, and a lot less if you build in inflation protection indexing... Its not a lot is it?

If you dont like annuities then dont buy them. Go with the unsecured pension income option instead. However, that doesnt change the reality that irrespective of the tax wrapper used, you are unlikely to get more than 5% with investments (as a realistic income level) and 3% with guaranteed products (unless there is some cross subsidy).

Its is however an almost racing certainty that if you are young and have 25+ years to save, then you will mostly likely do better in you own stockmarket based savings plan (not an insurance saving plan) bought through a stockbroker

With most people paying regular contributions, the dealing fees on small amounts would end up being rather expensive.

and investing directly into a diversified investment trust, than putting it into a pension.

the pension is one thing. the investments are another.

the ongoing managment charges on the pension mean it just cannot compete for value for money.

Yes it can if you want it to. I have set several pensions up recently with TERs of 0.238% p.a. That TER would have been the same whether it was an ISA or unwrapped. The fact it was pension was irrelevant as modern pensions dont need to cost anything.

Modern pensions are no longer a product. They are a tax wrapper.

feesarefare

A fair rant, which is understandable for someone with little understanding of modern pensions and retirement options.

Seronera wrote: »

Trouble is, Joe & Josephine public are between a rock and a hard place. Its is however an almost racing certainty that if you are young and have 25+ years to save, then you will mostly likely do better in you own stockmarket based savings plan (not an insurance saving plan) bought through a stockbroker, and investing directly into a diversified investment trust, than putting it into a pension.


Seronera

Since when have stockbrokers become registered charities ?

nrsql

You could say that the modern products haven't been going long enough to show the problems - legacy funds have though.
Pensions are generally not invested for a short period and you can't say what will happen over their lifetime - but you can look at what's happened over the last 40 years or so.

Problem with a pension is that it's locked away and you you are at the mercy of rules whan you try to access the funds and any changes in the meantime - and they are an easy target.
I don't think that the fact that the modern products haven't been going long enough to form an opinion is a very good argument in their favour.

Not in favour of pensions due to their increased risk from the wrapper. Free money from company contributions may be enough to compensate for the risk but apart from that I would want some distinct benefit.

Loughton_Monkey

Seronera wrote: »

Trouble is, Joe & Josephine public are between a rock and a hard place. Its is however an almost racing certainty that if you are young and have 25+ years to save, then you will mostly likely do better in you own stockmarket based savings plan (not an insurance saving plan) bought through a stockbroker, and investing directly into a diversified investment trust, than putting it into a pension. The ongoing managment charges on the pension mean it just cannot compete for value for money. There are no guarantees by the way, but I guess you have gathered that.

Seronera

Wow!

It's 'thinking' like this that provides a lot of us with a good laugh or two every day. Nobody who understood pensions these days would say this. I can just see the post in 30 years time.....

"Help. I invested all my savings for the last 30 years with a Stockbroker, and was disgusted with the fact that my fund has only risen to £125,000. Is it right that when I was paying in £100 a month, that 17% was taken away in fees and stamp duty? Is it right that I could have had a SIPP, with exactly the same investments and would have had 25% more because of tax relief? I've been ripped off......"

Who knows, I may still be around to see all these posts. After all, life expectancy is improving all the time - and it seems we now know who to blame for that; er... the pensions industry!

Seronera

Show me these wonderful low cost pensions then. All we got offered was the Standard Life Group Stakeholder where I used to work , take it or leave it. That commenced in 2002, so not all that long ago. The Boss put in 5%, so it was worth doing...I suppose. I'm interested that its 'out of date' already....how come nobody told us, The company employed an IFA to administer it, but I never heard from them in nine years... As for SIPPS like the heavily promoted HL Vantage, well I'm not entirely down on the concept but when you have the intermediary, the trustee and the various sub fund managers all having their cut, its going to have to perform some to give anything back to the investor..makes you wonder if it worth the effort

It not rubbish about costs being high here.I heard a bloke on Radio 4 today programme this morning proposing that pensions be run along the lines of the Dutch system where benefits are up to 40% better than ours for the same outlay using large scale collective investments. Our system is hideously bad value for money still for the majority of small savers. Up to 40% better....think about it.

http://www.bbc.co.uk/news/business-11926127

Oh and transfer values. If I transfer my old Aviva pension they sting me for an 8% penalty..wow!..rip off or what. They've had the money in a lump sum for 20 years !!!!!!!

And what level of contributions are you requiring for these very low charge pensions. I doubt they are applicable far below director level, so largely irrelevent for the majority. Those who work for outfits like Mercers can do all sorts of fancy things for those at director level, but do SFA all for the work force under them.

So if these pensions are out there how come they never get a mention on Money Box or the finance pages of the Daily Telegraph. I'm quite prepared to believe I'm out of date, but how does one access this information. And whatever happened to 'drawdown'..or did too many people drawdown too much and knacker themselves, or not have funds big enough for it to work, or were ill advised. Hmmm.

Whats that statistic...40% of people in the UK have no other pension than their state pension. Thats at least partly because people have no faith in what is offered to them. The perception is that pensions are poor value for money. I'm open to persuasion otherwise..so persuade me what sort of thing I should do with..say..a £4000 annual contribution...not a lot I know, but thats about my limit. It'l have to do damn well to compete with the property I sold in July that more than doubled in ten years (and it was main priciple res so no CGT..thank the lord)

Seronera