Something that doesn't seem to get mentioned

MacMickster

RenovationMan wrote: »

I went to an IFA for pensions advice and then posted his advice on here. Even Dunstonh was appalled, especially with the £12k the IFA would have trousered in commission.

Which was why I said to PAY for advice from a GOOD IFA. If you go for "free" advice then too many will have an eye on their own commissions. If they aren't going to receive commissions then their aim is more likely to be to satisfy the paying customer (so that they are likely to get repeat business and recommendations).

atush

RenovationMan's 3Yr 50% Equity Challenge (May 2010 - June 2013)

WE had our mtg going for over 15 yrs now. Started at 90% now it is under 10%. A lot of that was the raise in value though. But we have been overpaying for many years now.

RenovationMan

StevieJ wrote: »

The top of my list when I was looking for a job as a youngster was FS pension, it meant my retirement was sorted for me without having to do anything

And without having to worry about stockmarket crashes!

My SIPP took a £15k hit when the FTSE100 dropped from 6000 to 5000, but the impact was softened somewhat by the knowledge that my FS pension was unharmed.

chewmylegoff

RenovationMan wrote: »

Yes, and the best way to get more money after tax is not to pay tax at all, which is the most efficient way to organise your finances. Ask any millionaire whether he employes tax avoidance strategies in order increase his wealth.

not necessarily. as if you receive £100 and pay £50 tax on it, it's better than receiving £49. of course millionaires employ tax avoidance strategies, but anyone with sense would always take the option of paying tax if it meant the total amount they receive is higher.

I said to Graham "make sure that your pension projection does not take you above the age related personal allowance". The pension projection would have the various options available, including withdrawing 25% tax free, setting up spouse pension, having the pension index linked, having a 5 year guarantee. Each option will have a different pension projection and it is upto Graham to decide which option to chose. When he has chosen his pension option he needs to ensure it doesn't go above his age related pension.

you miss the point which is not about managing the limits. if you avoid 20% tax now, and you can withdraw 25% tax free as a lump sum, your effective rate when drawing down from the pension in the future is not 20%.

thus you avoid tax at 20% now on 100% of your money and pay tax at 20% on 75% of your money in the future, with an ISA you pay tax at 20% now on 100% of your money in order to avoid tax at 20% in the future...

there is also the point about the fact that trying to plan your decisions now in an ultra-precise manner based on a what the tax system (and the state pension provision) might be in 30 years is probably not going to work out in the way that you plan it - although obviously the rules on pension draw down could change significantly. it's also all based on your prediction of growth rates which of course won't be accurate.

chewmylegoff

MacMickster wrote: »

But then why not hold these investments in a pension plan?

because you cannot put a residential property into a pension.

RenovationMan

MacMickster wrote: »

Which was why I said to PAY for advice from a GOOD IFA. If you go for "free" advice then too many will have an eye on their own commissions. If they aren't going to receive commissions then their aim is more likely to be to satisfy the paying customer (so that they are likely to get repeat business and recommendations).

How do you know who is a GOOD IFA and who is a BAD IFA, especially if you have no experience?

You can pay a set fee and still receive crappy advice. If you are talking about putting away +-£100pm and want the flexibility of being able to increase/decrease or stop payments altogether then there isn't much better than a stakeholder. I doubt an IFA would be interested in such small investments and would simply advise a stakeholder anyway.

Again, you seem to be looking for a general pensions discussion rather than concentrating on Graham and his thread and his pension. We're not talking +£10k pension pot and +£250pm pension contributions here.

pqrdef

wannabehermit wrote: »

In conclusion - my parents could afford to have 1 person on a normal, basic, unskilled job while the other stayed at home, they could buy a very nice house, have a good quality of life outside of work and save for the future.

Something doesn't add up here. Life was never that sweet. Unless your dad worked lots and lots of overtime, I can only assume he was paid in cash and told not to ask questions.

RenovationMan

pqrdef wrote: »

Something doesn't add up here. Life was never that sweet. Unless your dad worked lots and lots of overtime, I can only assume he was paid in cash and told not to ask questions.

or used to go to work with a sawn off shotgun and stocking on his head.

(just joking)

Pennywise

It's the herd instinct again. 25 years ago when investments were rising, everyone wanted to invest in pensions when they say their own and their friend's annual statements showing ridiculous increases in value. Just like the way they all wanted endowment mortgages. Just like they all wanted dot.com shares. Just like they all wanted BTLs.

Now pensions don't show good investment performance, people aren't interested, made far worse by Brown's tax grab on pension funds, made far worse by the Equitable Life scandal where those with the guaranteed funds were looked after but everyone else's funds were sacrificed.

The constant changes in pension and benefit rules don't help either. Nor does means tested benefits which mean you lose out on state benefits to virtually the same figure as your occupational pension if you're a relatively low earner with a relatively small pension fund.

As an accountant, 25 years ago, it was standard practice to discuss pensions at the annual accounts meeting and for most clients to put a few thousand into pensions every year. Now, I honestly can't remember the last time a client was remotely interested in pensions, and it's not just the last few years of recession - it was the same 5-10 years ago after Equitable Life and Brown's tax grab.

I've just done the accounts of an IFA and was absolutely amazed to see just how little he earned from pensions commission - he got the vast bulk of his commissions from ISAs, bonds, and other investments rather than pensions. He said the same, people just aren't interested in pensions.

Joe Public has lost faith and trust in the entire pensions industry. Unless you are lucky enough to be employed by an organisation that has a good pension scheme and makes a reasonable employers contribution, then it seems that unless you are wealthy, there's just no point in making provision for yourself.

Percy1983

My dad was a security guard and my mum was a part time checkout operator.

They couldn't buy their house with those jobs now.