Its not worth haveing have a pension

hugheskevi

I'll be number four then. I want to be in control of my cash when I retire and not reliant on an investment company telling me how much I can have.

It is not the investment companies who tell you what you can have, it is the Government which sets out the rules by which the investment companies have to abide.

The Government sets the rules in just about every area you might choose to invest - be it ISAs, property, pensions or whatever. Even cash is vulnerable via inflation. Gold bullion and such like is about as far away from Government as you can probably get.

The point being, every area of investment is subject to political risk and rules changing. Pensions are probably more vulnerable than other areas due to their illiquidity, but then, they also carry the best tax treatment.

It is a case of balancing the wide range of risks, which normally involves trying to take the best bits of everything in a diversified portfolio.

villabadger

My point is that I would rather have full control of my 'pot' of money. Why should I have any less control of my cash when I retire than I do now? If I put money into a pension it gets locked away and becomes subjected to certain rules when I want to take it i.e retirement. I want to have the flexibility to put it into whatever I choose - investments, business, property etc. whenever I choose. To me, it is more important than not getting the tax relief on contributions.

dzug1

villabadger wrote: »

My point is that I would rather have full control of my 'pot' of money. Why should I have any less control of my cash when I retire than I do now? If I put money into a pension it gets locked away and becomes subjected to certain rules when I want to take it i.e retirement. I want to have the flexibility to put it into whatever I choose - investments, business, property etc. whenever I choose. To me, it is more important than not getting the tax relief on contributions.

But then if you are rich enough to afford all that then surely you should be going for a pension as well for a proportion of your assets?

Ater all at some stage in your 70s - maybe a bit earlier, maybe a bit later - you are going to start losing the drive, energy and determination to manage your investment portfolio which will slowly but surely crumble away like the property you can no longer manage.

villabadger

dzug1 wrote: »

But then if you are rich enough to afford all that then surely you should be going for a pension as well for a proportion of your assets?

Ater all at some stage in your 70s - maybe a bit earlier, maybe a bit later - you are going to start losing the drive, energy and determination to manage your investment portfolio which will slowly but surely crumble away like the property you can no longer manage.

Who said anything about being rich? You don't have to be rich to want to decide how your money works for you. As I said, putting into a pension locks it away until you retire. Most people just put a few quid away every month with no real idea on how that money is working for them (people on this forum are exceptions to this:D). Then they come to retire after relying on how well a few fund managers have done, good or bad.

Unfortunately, people are forced onto the bandwagon of needing to have a pension with the carrot of having a tax free lump sum when they retire. What is the current average pension pot size? I have no idea....£50k, £100k, £200k? If we take £100k as an example, then we can expect £25k tax free cash max. The rest gets taxed, which is not so great. All I'm saying is that I believe that I can do better than that - of course, it will always be argued against by the financial advisers, banks, government etc! Still none of those people/organisations gain from playing with your money, do they? If the tax allowances were seriously increased for pensioners then I would consider putting something into a pension but we all know that that isn't going to happen.

dunstonh

As I said, putting into a pension locks it away until you retire.

Which is largely the point of pensions.

If we take £100k as an example, then we can expect £25k tax free cash max. The rest gets taxed, which is not so great.

The 75% providing an income is only taxed above your personal allowance. So, the first 10k of income is non-taxable. So, a couple can earn nearly £20k a year tax free with good planning.

If the tax allowances were seriously increased for pensioners then I would consider putting something into a pension but we all know that that isn't going to happen.

You say you are not rich but you must be planning for a joint income in excess of £20k in retirement which would be above the national average.

margaretclare

dzug1 wrote: »

After all at some stage in your 70s - maybe a bit earlier, maybe a bit later - you are going to start losing the drive, energy and determination to manage your investment portfolio which will slowly but surely crumble away like the property you can no longer manage.

Not sure when all this is supposed to happen. Physical management of property is one thing - solution, pay someone to do it! Outside painting etc springs to mind - you can get anything done for you if you can pay them. So an argument FOR pension provision, not against.

My investment portfolio is suffering a bit as a result of Europe's problems and those in the Middle East, but then, so is everyone else's. It's nothing to do with my lack of drive, determination and energy, and I resent the implication that it's to do with my advancing age.

atush

You can have a pension and have control of it. From SIPPs to even a normal workplace pension where you decide (ie you TELL the company running it) where and in what funds you want your money to go.

By saying NO to a pension where your company contributes is to say NO to Free money not to mention tax relief and it is very shortsighted.

Why all or nothing? Why not have a pension and outside investments too?

And as for drawing a pension at 55 while you were still working, well I guess that was your mistake. Had you not taken it early, the JSA would not have been affected?

thenudeone

scampi wrote: »

IF YOU HAVE A PENSION AND LOSE YOUR JOB ANY PENSION YOU DRAW COMES OFF YOUR JOBSEEKERS ALLOWANCE

And why on earth would you decide to start drawing your pension when you are actively looking for a new job and eligible for income from jobseekers allowance?

Just leave it as a deferred pension and draw it when you decide to retire, which is exactly what it's for.

villabadger

dunstonh wrote: »

As I said, putting into a pension locks it away until you retire. Which is largely the point of pensions.
Which is why I don't want one

The 75% providing an income is only taxed above your personal allowance. So, the first 10k of income is non-taxable. So, a couple can earn nearly £20k a year tax free with good planning.
Yep but the personal allowance is wiped out by the state pension so the majority of the pension payments will be taxed

You say you are not rich but you must be planning for a joint income in excess of £20k in retirement which would be above the national average.
Why? I will focus on creating a 'pot' of money that will be available to me to do as I please, when I please. An annual income amount is irrelevant, minimising my tax payments will be more important.

What I really don't understand (although I've got an idea what you will say) is why people who invest in pensions can't have all of 'their' money when they want? When most people retire, and have saved their money, they have had around 45-50 years of managing their finances. Why can't they be given all of their fund to do with as they please? Even if they blow it all they will still have their state pensions to fall back on. Also, surely, loads of pensioners with money to spend would stimulate the economy. To keep the tax man happy, he can have his chunk when the fund is taken;)

dunstonh

Yep but the personal allowance is wiped out by the state pension so the majority of the pension payments will be taxed

Personal allowance is nearly £10k. Basic state pension is 5k. So, you would need a pretty damned big additional state pension to breach 10k. Indeed, for someone starting out now it would not be possible for them to get more than about 3k tops on S2P.

What I really don't understand (although I've got an idea what you will say) is why people who invest in pensions can't have all of 'their' money when they want?

You would effectively have people buying next years holiday and getting tax relief on it. eg. £5k holiday would only cost £4k to the person due to £1k tax relief.

Why can't they be given all of their fund to do with as they please?

To prevent the unscrupulous spending it all in one go and the living off benefits for the rest of their life.