Pensions Robbery Discussion thread, all viewpoints welcome!

Thrugelmir

RenovationMan wrote: »

If this is the case, when why are so many people making the same statements about pensions robbery?

Maybe the management fees are excessive? Now that "value for money" is back on the agenda and investment returns are being squeezed.

RenovationMan

Thrugelmir wrote: »

Maybe the management fees are excessive? Now that "value for money" is back on the agenda and investment returns are being squeezed.

That is a moan for most people, but generally doesn't stop them from investing in a pension completely. The ones who refuse to put money into a pension usually state that they don't want to lose all their money.

I know in the case where my work colleague refused to join the pension scheme, I calculated that he missed out on free employer contributions of £18400 in order to prevent the 'loss' of £3312 (after tax). I see him around every so often (we both moved on from that company) and he still maintains it was the right thing to do because even though I did take the company contributions and have seen decent investment returns, I'll 'lose it all sooner or later'.

Linton

RenovationMan wrote: »

If this is the case, when why are so many people making the same statements about pensions robbery?

Because they read and believe the tabloids

Thrugelmir

RenovationMan wrote: »

That is a moan for most people, but generally doesn't stop them from investing in a pension completely.

Much is down to poor financial education. Seeing your portfolio drop 30% overnight causes panic and worry.

Perception is to invest into a market you think you understand where returns are guaranteed.

dunstonh

Maybe the management fees are excessive? Now that "value for money" is back on the agenda and investment returns are being squeezed.

You can get 0.2% p.a. easily enough if that worries you. I suspect that most people saying things about charges dont have a clue what they are being charged. They just assume what they have read in the media is correct and we know that is rarely the case.

I know in the case where my work colleague refused to join the pension scheme, I calculated that he missed out on free employer contributions of £18400 in order to prevent the 'loss' of £3312 (after tax). I see him around every so often (we both moved on from that company) and he still maintains it was the right thing to do because even though I did take the company contributions and have seen decent investment returns, I'll 'lose it all sooner or later'.

You cannot do anything about people like that. You can try to explain it but they wont listen.

chris_m

Linton wrote: »

Because they look at the pictures in and believe the tabloids

I've corrected that for you :rotfl::rotfl::rotfl:

Thrugelmir

dunstonh wrote: »

You can get 0.2% p.a. easily enough if that worries you.

Is .2% pa the true cost of the fund management?

Or just the cost of the charge for funds under management?

Rather than have clear transparency. There seems to be a murky greyness in the way financial institutions conduct their business. Which stems back to the days of Allied Crowbar in my mind.

Good to see some Investment Trusts are now returning to flat management fees rather than performance related ones. Never could understand why fund managers were paid more just because markets had risen.

molerat

My preserved pension fund has been robbed, it lost 8% last year (but it made 14% in 10 and 42% in 09 so +49% in3 years)

yogibearlive

I think that one can understand the reluctance of some people to save for retirement, as in my own case when I took out the pension, the projected fund would grow to 300K min or 500k max. However, after Mr Brown & co worked their magic, and latterly the sub prime problem became apparent, I'll be lucky to get a third of the mininum amount stated. In fact before Brown, i was accruing annual bonuses of 7 to 9%, and afterwards just 0.5% and just lately 0.
1%. ( My accountant once said a few years ago " David, I'm like you. If we knew then what we know now, we would have bought houses instead " ). Lifes a gamble!

dunstonh

My accountant once said a few years ago " David, I'm like you. If we knew then what we know now, we would have bought houses instead " )

He could also have said that had he known what he knows now, he would have bought pensions with guaranteed annuity rates. Or picked the best selling IFA fund of 10-15 years ago and made far more than your 7% a year.

Hindsight is wonderful. Many see the current period as great news for long term contributions. Who is to know if the next 20 years end up being dire for property but excellent for various types of investment.

One thing you could do is get your pension looked at as you mention bonuses and that is enough to think your plan is probably out of date (unless it happens to have guaranteed annuity rates).