A pension outside 'the system' for the paranoid?

jago25_98

My employer offered me a pension last year.

Simply because the employer has to match what I contribute I decided to sign up.

After looking through the range of pensions from Aviva I decided they were all rubbish because they are all anglophone centric.

Begrudgingly I decided on the Newton Oriental on the basis that it's not Europe (where I get my salary), and it's not South America (where I make my investments).

Now I'm reading about what happened in the last financial meltdown and see that pensions were raided.
Thus my view of my pension now has gone from a poor odd slight betting punt only made favourable by the employer matching to a wild recklace gamble.

My question is, are there lower risk pensions? If I invest in Gold then that's just an ETF; unaccounted for mixed tungstun bars - great. There's also a way to save in allocated gold but again I'm expecting a risk of it getting raided by the hosting government (yes I'm that paranoid when it comes to 50 year timescales), so I'm not sure about that either.
Is there any other way to get the benefits of security in a pension? Can't one bag those employer contributions and use it for a house?

If not then I'm going forgo the extra £100 a month because I can do more with £100 cash than I can £200 in a pension.

Did I miss anything?

nearlyrich

The HRMC contribution of Tax rebate for a start. I guess I am wasting my time if you are that paranoid but my pension funds are still fairly riskily invested and they are growing much quicker than they would under the mattress.

gadgetmind

jago25_98 wrote: »

After looking through the range of pensions from Aviva I decided they were all rubbish because they are all anglophone centric.

If you go for a global fund, it will probably invest based on the size of the various global economies. If English speaking countries dominate the global economy ... well, at least we know how to apologise politely.

Begrudgingly I decided on the Newton Oriental on the basis that it's not Europe (where I get my salary), and it's not South America (where I make my investments).

I'm not sure I follow your logic.

Now I'm reading about what happened in the last financial meltdown and see that pensions were raided.

Brown's £5bn a year raid was before that.

Can't one bag those employer contributions and use it for a house?

No.

Did I miss anything?

Tinfoil hat and green ink?

dunstonh

Begrudgingly I decided on the Newton Oriental

That is really "anglophone centric". !!!

Now I'm reading about what happened in the last financial meltdown and see that pensions were raided.

What reading material told you that?

Thus my view of my pension now has gone from a poor odd slight betting punt only made favourable by the employer matching to a wild recklace gamble.

Only if you dont understand it.

My question is, are there lower risk pensions?

Pension are a tax wrapper. They only risk a tax wrapper has is legislative risk. Whilst pension legislation does get played around with too much, you tend to find that personal pensions are left fairly well alone. Indeed, about from lower costs and better investment options, personal pensions today are very similar to those offered 30 years ago and the retirement annuity contracts that used to exist before that.

Is there any other way to get the benefits of security in a pension? Can't one bag those employer contributions and use it for a house?

The employer is unlikely to pay you cash due to legislation that requires them to offer a pension that they have to pay into by 2017. If they did offer you cash then it would be taxed and have NI on it.

If not then I'm going forgo the extra £100 a month because I can do more with £100 cash than I can £200 in a pension.

No you cant.

Firstly you are making the mistake that you are paying £100. You are not. You are paying £80. The Govt adds £20 and the employer adds £100.

Please show us something that is guaranteed to turn £80 into £200 in 24 hours.

Did I miss anything?

Lots. I suggest you take off the tin foil hat and look at it more objectively and with facts rather than things that have no relevance to you.

Linton

gadgetmind wrote: »

Brown's £5bn a year raid was before that.

People keep on bringing this up.

First of all it wasnt a raid - nothing was taken out of anyone's
pensions.

Secondly, what it was was the removal of a tax refund on the hypothetical 10% tax that the tax system assumes is paid on dividends. But 10% tax isnt actually paid on dividends so it was a refund of tax that wasnt actually paid.

atush

Wrong. I pay 10% on tax on dividends in my pension. Which I could reclaim against tax before. Now I can't.

atush

If not then I'm going forgo the extra £100 a month because I can do more with £100 cash than I can £200 in a pension.

No you cant.

Firstly you are making the mistake that you are paying £100. You are not. You are paying £80. The Govt adds £20 and the employer adds £100.

Please show us something that is guaranteed to turn £80 into £200 in 24 hours.

Excellent analysis of something that comes up often. People think 'They' put 200 in, when they only put 80 in. They were given a 'gift' of 120 from their company and the govt. So you can never do with 80 what a pension can do with 200. Unless you invest in successful cold fusion, or a time machine.

Begrudgingly I decided on the Newton Oriental on the basis that it's not Europe (where I get my salary), and it's not South America (where I make my investments).

If you make most of your investments in Latin America you took big hit this year (brazil took a huge hit). Add in China drops and you are hemoraging. The places that made money this year (in their markets) were The USA, Qatar, and indonesia. So maybe you need more Global exposure but less targeted/bias?

instead you could have invested in Aberdeen asian smaller companies trust which has done very well these last 5 years. But there are loads of others.

gadgetmind

dunstonh wrote: »

personal pensions are left fairly well alone.

Annual allowances, special annual allowances, GAD limits, dividend taxation, residential in a SIPP blowing hot and cold, and much much more.

That's not leaving fairly well alone IMO.

gadgetmind

Linton wrote: »

People keep on bringing this up.

And quite rightly.

First of all it wasnt a raid - nothing was taken out of anyone's
pensions.

£5bn a year, every year, and rising.

what it was was the removal of a tax refund

Yes, it was, and it made dividends (the main engine of growth in a long-term equity portfolio) 10% less effective with the difference being syphoned off to HMG's less than responsible grasp.

atush

gadgetmind wrote: »

And quite rightly.



£5bn a year, every year, and rising.



Yes, it was, and it made dividends (the main engine of growth in a long-term equity portfolio) 10% less effective with the difference being syphoned off to HMG's less than responsible grasp.

what this was, was the main thing in private pensions that makes any comparison at all to the public service pension debate.

a fundamental part of the system/planning was taken away/over ridden w/o debate or negotiations (unlike public service pensions). And overnight, not with years of talking about it. Or strikes as you can't legally strike if your employer isn't doing it.

dunstonh

Annual allowances, special annual allowances, GAD limits, dividend taxation, residential in a SIPP blowing hot and cold, and much much more.

And how many people in the country were affected by those changes? Annual allowance at £50k is aimed to stop high earners getting too much tax relief. However, the OP is talking about a small contribution of just £2400 a year.

When the lifetime allowance rules came in, it hit just 15,000 people. Basically anyone with a pension over 1.5 mill. Not your every day person.

Residential property in SIPP was never an available option. It was a hopeful option by some groups who thought they were going to get it.

GAD limit reductions were not great but not a major issue and I suspect an increase will come in at some point. And remember that it is still a minority option.

Tax credit affected pensions, ISAs and unwrapped.