Scrap ISAs as most of the tax benefit goes to the rich?

grizzly1911

Courtesy of Barclays - appreciate they are not ususally the highest interest rates but their new one each year is generally "competitive" and no doubt they have many customers who would save with them through inertia.



Barclays customers saved on average the following amounts in Barclays cash ISAs over the last 5 years.



£2,546 2007, £3,029 2008, £4,064 2009, £3,954 2010, £3,903 2011

Interesting how it peaked and has remained static over the last couple of years.

ffacoffipawb

RenovationMan wrote: »

Sorry, I missed this. I'm just over 40 (hence I have an 'adventurous' portfolio) and the following screen dump from my pension login shows where I am making that investment:






We agree on a lot of things Thrug. When we're giving advice on the other house boards we almost always seem to be in accord.

I agree that some people will be looking forward to a painful retirement. Still, those who hold similar views as grizzly can rest easy that although they are struggling financially in retirement, at least they didn't line the pockets of investment bankers while they built a pension pot. :cool:

p.s. I haven't balanced my portfolio in about 3 years, I might pop that graphic over to the investment boards and see what info I can glean from them.

Hi, which funds are the hedge funds?

Thanks

RenovationMan

ffacoffipawb wrote: »

Hi, which funds are the hedge funds?

Thanks

The Melchior Selected Trust European Absolute Return Class H GBP Accumulation fund.

grizzly1911 wrote: »

I have a most of mine tucked up in in a DB fund with RPI linking, plus a a wide personal portfolio outside of pensions.

Then you're in a fortunate position that most other people would love to be in but DB pensions are now rare in the private sector. Most private sector workers have to rely on the returns in their company and/or private pensions. I'm in a DB scheme with my current employer and, like yourself, I'm happy enough with that level of contribution that I don't contribute to a personal pension (i.e. my SIPP) anymore. However, most people are not as lucky as ourselves and need a retirement vehicle that gives them the best 'bang for their buck' and I believe pensions do that.

Out of interest, where have you invested your personal portfolio outside of pensions?

RenovationMan

grizzly1911 wrote: »

Simple stuff, because I am, but mixed and spread.

Unit/Investment trusts equity, some trackers, high income funds in and out of ISA wraps mostly accumulation. Cash ISAs maximisation and regularly moved. Some direct investment in shares but legacy. AVCs linked to company pension, mixed portfolio, but lack lustre performance and better performance elsewhere capped this.

I'm confused. How can you hold the position against pensions because of the fees, and yet you're investing in exactly the same funds, unit trusts, shares in an ISA with exactly the same investment costs as in a pension?

Indeed, with probably higher costs in an ISA for the same investments because many pensions have heavily discounted fund fees.

Joe_Bloggs

Those under 60 years of age are assumed to get £1 per week for every £250 they have saved per week over £6000 when it comes to income based benefits.

In effect you can't keep your ISA /stocks shares money if you fall on hard times. You may fare better with pension based tax wrappers. Those with savings can't benefit as much as those without savings so it a lifestyle decision to do without means tested benefits if you have savings.

J_B.

grizzly1911

RenovationMan wrote: »

I'm confused. How can you hold the position against pensions because of the fees, and yet you're investing in exactly the same funds, unit trusts, shares in an ISA with exactly the same investment costs as in a pension?

Indeed, with probably higher costs in an ISA for the same investments because many pensions have heavily discounted fund fees.

I appreciate the fees are little different but I get to choose what I do with the money when I want to - flexibility. I may not reach pension age. I already have some things lined up that I want to use the money for before I can draw on my pension.

I have sufficient pension if the applecart doesn't get turned over and when I can draw it I may then choose to make someone elses life easier.

I believe in eggs and baskets.

grizzly1911

Joe_Bloggs wrote: »

Those under 60 years of age are assumed to get £1 per week for every £250 they have saved per week over £6000 when it comes to income based benefits.

In effect you can't keep your ISA /stocks shares money if you fall on hard times. You may fare better with pension based tax wrappers. Those with savings can't benefit as much as those without savings so it a lifestyle decision to do without means tested benefits if you have savings.

J_B.

We have never had to resort to benefit sand don't intend to do so in the future, but the way the Government seem hell bent on deflating the debt who knows.

Accept you argument though.

I feel more for those in later life, much later, who have been prudent throughout , who haven't managed their position, have modest (in reality) savings that preclude them from benefits when they really need them.

RenovationMan

grizzly1911 wrote: »

I appreciate the fees are little different but I get to choose what I do with the money when I want to - flexibility. I may not reach pension age. I already have some things lined up that I want to use the money for before I can draw on my pension.

I don't understand any of the above because you are talking as though you have made a decision to pay retirement money into an ISA instead of a pension, when the reality is that you do actually have a pension and you are actually paying into it.

I remember someone on the pensions board who always insisted that people should not have pensions and should invest in ISAs instead (virtually all of the reasons given against were, or are now, obsolete due to pension changes). It transpired that the person giving this advice had not one but THREE pensions, including a defined benefit.

I asked her if she though that pensions were just a bad idea for other people as it seemed very hypocritical to be advising against them whilst at the same time actually maintaining a pension for herself. I didn't get a response.

Thrugelmir

grizzly1911 wrote: »

I believe in eggs and baskets.

If you don't invest in your hens i.e. feed them. Then there's no eggs tomorrow.

That's where we are heading. As many are too overburdened with debt. To save anything at all.

grizzly1911

RenovationMan wrote: »

I don't understand any of the above because you are talking as though you have made a decision to pay retirement money into an ISA instead of a pension, when the reality is that you do actually have a pension and you are actually paying into it.


.

Get out of the sun.

No I haven't. The ISA is just another form of saving that is made over and above an adequate pension provision. It is only one part. You asked me what I did outside of pensions.

The only decision I have turned off was the AVCs.

People do save for other things than just retirement.

Nothing wrong with pensions but they aren't as good a deal as they once were (IMO) and for people lower down the pay scale the eventual return may make very little difference to their position despite sacrifices made in life to get there. Not everyone can afford those sacrifices.

As I have said I know people who are now coming to the end of the pension cycle, who looking back are questioning why their expectations weren't achieved. These have been a mix of private pension and employer schemes.

You are a capable person with knowledge and the ability to follow/understand the market and manage your own SIPP. This model isn't necessarily achievable by many who will be reliant on mainstream products.