SERPS pension losses

2sides2everystory

Are you confusing me with someone else?

Well it seems I have got hold of the wrong end of the stick if you think that

wotsthat wrote:

... the last thing I ever expected was for me to have the chance of better returns but for the government to make up the losses if it didn't work out.

I may be being rather dense as most of us are who don't understand financial services products beyond what they say on the can when first sold to us.

But please, one more time, what did you mean by "...but for the government to make up the losses if it didn't work out". How does that work? Or were you just being supremely sarcastic ?

wotsthat

2sides2everystory wrote: »

But please, one more time, what did you mean by "...but for the government to make up the losses if it didn't work out". How does that work? Or were you just being supremely sarcastic ?

No sarcasm is intended. Seems quite a straightforward concept to me......

I opted out of SERPS and took the risk that I'd get a better pension income compared to staying in SERPS.

I DON'T expect the government to make up the losses if, come retirement, it turns out that the SERPS option would have been better after all.

The way that works is simple. I'd have to live with the income on my invested rebates and not expect to get a SERPS pension to recompense me for my poor investment choice.

2sides2everystory

OK I now have it straight (apart from the possible effect of the £140 or £155 per week ventured in another thread).

It is interesting that you say you consciously took on the risk coming out again of SERPS. How about the original decision to be contracted out? Did you take the risk there? I recall that the way SERPS was generally introduced was as a good idea with no mention of risk apart from that silly little "down as well as up" line that was tolerated but not quantified. Many established final salary schemes had already gone "contracted out" years before individual SERPS ploicies as add-ons to group money purchase pension schemes went on sale. Do remember that at the time SERPs was first introduced to those not in final salary schemes, the down as well as up line had only been floating around for a few short years in the mid 80s before SERPS selling really took off in 1988 which was the year of the financial services 'Big Bang'. The British Gas privatisation and first public share offering promoted widely to the general public was of course at the end of 1986. If you saw Sid, you were not advised to tell him that shares go down as well as up, you were advised to just "Tell him!" (that maybe he really ought not to miss out).

As with everything in 'long term' financial services, the SERPS product/concept changed again within less than a decade and a half and only market insiders could make the products work or play 'frogger' sufficiently well enough to make the whole thing worthwhile.

thehorologist

dunstonh wrote: »

No. Some claims companies thought so a few years ago but the FSA looked into it about 4 years back and found a failure rate of just 1.5%. that is very low. The FSA also issued a flow chart that made it easy to identify those 1.5%. Since then virtually all the claims companies stopped looking at it other than a few scam companies or those that use it as an excuse to allow them to transfer the pension to something else (And earn around 5% of the value by doing so).

[TEXT DELETED BY FORUM TEAM]

So what happened to those unfortunate 1.5%?

dunstonh

So what happened to those unfortunate 1.5%?

The 1.5% were only potentially mis-sold. They were the ones that fell above age 45 when contracting out. However, it doesnt mean they were. I remember the early 90s where the pivotal age to contract back in was in the 50s. It changed every year or so based on the size of the rebates (which the Govt played around with - stealth tax).

Those who contracted out above age 45 can put in a complaint or ask their IFA if the advice was correct. They can then check the pivotal age for that year and basically, if its below the pivotal age they can reject the complaint and if above they will have to check if there was any other valid reason for contracting out and if not, they will pay redress.

thehorologist

Sterlingtimes wrote: »

What is the opposite of "lazy investor"? Is it "busy investor"?

Or even a non-vestor:D

From recent press articles, we seem to have a concept of "lazy fund manager". The lazy fund manager charges a huge fee for being a busy fund manager, but does no more than track the market.:T



Perhaps, it is a bit of an insult for professions to call us lazy investors when we select a plausible fund of average risk and run with it.

Here here

For my part I did very well (as a lazy investor) in contracting out of SERPS. It has move to do with luck than the relative activity of the investor.

In my case the real winners were the very lazy who took no notice of the government scheme and remained in SERPS.:mad:

dunstonh

In my case the real winners were the very lazy who took no notice of the government scheme and remained in SERPS.

No. The real winners were those that contracted out and took control of their investments or used someone that did.

For the majority, its largely cost neutral but the ability to commence benefits early and take a lump sum from contracted out benefits is where most people gain.

thehorologist

dunstonh wrote: »

No. The real winners were those that contracted out and took control of their investments or used someone that did.

For the majority, its largely cost neutral but the ability to commence benefits early and take a lump sum from contracted out benefits is where most people gain.

Thank you for your continued responses. Am I right in thinking you are a Financial Advisor (albeit not acting as such through this forum?) I ask because it appears most of the respondents in this thread are, and a few only jump in to defend when something raises their hackles ignoring, the initial input information I gave at the start of this thread. (I was a Forum Newbie)
I detect a lack of empathy with the little guy with income so low as to be of any interest to an IFA and who decided to go it alone based on the TRUST of the information supplied by the government and its approved private investment companies. (Did I hear gales of laughter when I mentioned Trust?)
The point here is I studied the government scheme. I studied several private pension companies with their available information. I found little to choose between them and chose a major player. There was ample evidence to suggest the potential of greater pensions but no warnings that I could actually get less than my SEPRS pension. This came as a complete blow to me only months before taking my pension at 65.
So those IFA who accuse me of lack of research, failure to take responsibility for investments etc, please tell me where the information was published in 1987/88 that should have forewarned me. (Take as example the info from HSBC (Midland) and Sun Life (two of which I studied) and add any warning in the government publicity. So where was the warning?
Also bear in mind when accusing me of lack of research and responsibility that no Martins Forum existed then and for my own part did exercise responsibility by opting back in 1993 at the first indication that things were not going as well as expected.
So I opted out from 1987 to 1993 (incidentally the period when in a lifetimes earnings my income was at its highest) Opting out has caused me to get less pension than if I had stayed in.
So please don’t accuse me of lack of research and lack of responsibility or being a lazy investor. The only people who won in my situation were those who took no action, ignored the government scheme and pension providers and stayed in SERPS.
Taken the information available at the time I suggest no FSA would have advised me to do anything other than the action I took.

I joined this forum in the hope of exchanging experiences from people in a similar situation in the hope of finding a resolution. I did not expect to be shot down in flames and ridiculed for my naivety by IFA’s who could not have helped me in the first place.
I have obviously been bashing my head against a brick wall.
(I exclude some useful tips for which I thank those individuals)

Regards Chris Bowden

thehorologist

wotsthat wrote: »

Everyone should be reviewing their finance/ investments. Doesn't need to be done constantly and nor does it require the input of an advisor.

It's about taking responsibility for yourself. Isn't that what being a grown-up is all about?

Thank you for your continued responses. Am I right in thinking you are a Financial Advisor (albeit not acting as such through this forum?) I ask because it appears most of the respondents in this thread are, and a few only jump in to defend when something raises their hackles ignoring, the initial input information I gave at the start of this thread. (I was a Forum Newbie)
I detect a lack of empathy with the little guy with income so low as to be of any interest to an IFA and who decided to go it alone based on the TRUST of the information supplied by the government and its approved private investment companies. (Did I hear gales of laughter when I mentioned Trust?)
The point here is I studied the government scheme. I studied several private pension companies with their available information. I found little to choose between them and chose a major player. There was ample evidence to suggest the potential of greater pensions but no warnings that I could actually get less than my SEPRS pension. This came as a complete blow to me only months before taking my pension at 65.
So those IFA who accuse me of lack of research, failure to take responsibility for investments etc, please tell me where the information was published in 1987/88 that should have forewarned me. (Take as example the info from HSBC (Midland) and Sun Life (two of which I studied) and add any warning in the government publicity. So where was the warning?
Also bear in mind when accusing me of lack of research and responsibility that no Martins Forum existed then and for my own part did exercise responsibility by opting back in 1993 at the first indication that things were not going as well as expected.
So I opted out from 1987 to 1993 (incidentally the period when in a lifetimes earnings my income was at its highest) Opting out has caused me to get less pension than if I had stayed in.
So please don’t accuse me of lack of research and lack of responsibility or being a lazy investor. The only people who won in my situation were those who took no action, ignored the government scheme and pension providers and stayed in SERPS.
Taken the information available at the time I suggest no FSA would have advised me to do anything other than the action I took.

I joined this forum in the hope of exchanging experiences from people in a similar situation in the hope of finding a resolution. I did not expect to be shot down in flames and ridiculed for my naivety by IFA’s who could not have helped me in the first place.
I have obviously been bashing my head against a brick wall.
(I exclude some useful tips for which I thank those individuals)

Regards Chris Bowden

dunstonh

Thank you for your continued responses. Am I right in thinking you are a Financial Advisor (albeit not acting as such through this forum?) I ask because it appears most of the respondents in this thread are, and a few only jump in to defend when something raises their hackles ignoring, the initial input information I gave at the start of this thread. (I was a Forum Newbie)

I believe there is only one adviser posting on this thread.

I detect a lack of empathy with the little guy with income so low as to be of any interest to an IFA and who decided to go it alone based on the TRUST of the information supplied by the government and its approved private investment companies. (Did I hear gales of laughter when I mentioned Trust?)

You went it alone and you are just very slightly worse off because of it. That was a choice you made and it didn't pay off for you. You did your own research and made your own decisions. So, its hard to find empathy.

So those IFA who accuse me of lack of research, failure to take responsibility for investments etc, please tell me where the information was published in 1987/88 that should have forewarned me. (Take as example the info from HSBC (Midland) and Sun Life (two of which I studied) and add any warning in the government publicity. So where was the warning?

Information was harder to obtain for the general public back then but IFAs had it. You chose to DIY instead. However, that was 1987/88. What about all the years since then when information and options improved?

The warnings were issued by advisers when you sought advice. If you didnt seek advice then you dont get the advice warnings. You just get the generic investment warnings (you could get back more or less for example - a key one in this case).

o please don’t accuse me of lack of research and lack of responsibility or being a lazy investor.

Its not an accusation, its a fact. A lazy investor is one that does not review, rebalance and switch their investments but just leaves it to its own devices.

The only people who won in my situation were those who took no action, ignored the government scheme and pension providers and stayed in SERPS.

That is wrong. The real winners were those that were pro-active with their investments (either themselves or using an adviser) and updated their contracts as the rules changed over the years and better options came out.

Taken the information available at the time I suggest no FSA would have advised me to do anything other than the action I took.

Correct. Contracting out in 1988 was a non brainer for the majority of people. It became less so in 1997 onwards (although it did regain some morebenefits a few years back).

However, that was 23 years ago. How often did you adjust the investments and contract after that? A servicing adviser would have done it many times.

I joined this forum in the hope of exchanging experiences from people in a similar situation in the hope of finding a resolution. I did not expect to be shot down in flames and ridiculed for my naivety by IFA’s who could not have helped me in the first place.
I have obviously been bashing my head against a brick wall.

You haven't been ridiculed. Your "errors" and assumptions were corrected. You started the thread claiming mis-sale and after compensation. Yet you went down the DIY route. So, if you should sue yourself as you are responsible. No-one else.