Disillusioned, are pensions still worth it?

atush

Putting your pension contribs in a cash ISA is just a silly idea.

First of all, you are a HRTaxpayer. So, each 100 you put into a pension only costs you 60. you get an extra 20 into the pension, and claim another 20 off the taxman. put 100 into your cash ISA, it costs you 100. So you are basically throwing away 40 quid.

Second, Cash Isas are just about keeping pace with inflation (but some are behind). So, if you don't spend the interest, you are just treading water- not growing your cash.

Third, I agree it isn't your pension that is the problem, but maybe what you invest it in. and what annual charges you are paying. Maybe you need to look at your investments and do some tinkering, or at least put new money into other investments.

Forth, you don't have to buy an annuity, and who knows what rates will be in 10-18 years when you retire.

Fifth, your S&S isas didn't make you money as you invested around the time of the credit crunch I assume.

dunstonh

Why will they be better?

Annuity rates tend to follow interest rates. They are not directly linked but the cause and effect tends to see the two things go up and down relatively in line with each other.

No it's pre inflation

So you are getting less than inflation already. Let alone when you start to draw the interest and watch the value drop in real terms (along with the interest and your spending power).

somethingcorporate

So much for no risk!

tony4147

lvader wrote: »

It doesn't sound like you are in control of your finances at all and your lack of knowledge is costing you lots of money. You have a large enough pension pot and enough income to turn things around, it's not too late. Use an IFA or learn very quickly!

I have tried to use an IFA and like I said previously I have found that they tend to sit on the fence which is of no use to anyone.
At the moment I pay into a group pension scheme that is with Scottish Widows, the money is in the Pens Portfolio 2 fund, which is a balanced fund. I have been in discussions with my IFA about moving some of it into another fund and redirection my contributions into the new fund. Guess what.............. I cant move some monies I have to move the lot, so that was great advice I had originally from my IFA, doesn't exactly have the flexibility I wanted.

tony4147

you don't have to buy an annuity, and who knows what rates will be in 10-18 years when you retire.

[/QUOTE]

So are you talking income drawdown or something else?

gadgetmind

tony4147 wrote: »

Why will they be better?

They are *likely* to be better as gilt rates are currently well below the long-term average.

No it's pre inflation

So, slowly losing purchasing power. Don't get me wrong, cash does have a role in a portfolio, but it's a drag on performance if you overdo it.

And what growth are you making?

The make-up of my portfolio is quite complex, and I tend to work March-to-March, but my long-term average is a real 6-7% pa and I expect to see about 12-14% in absolute terms for 2012/13 when I go through my figures this March.

This figure has been boosted by my decision to move into fnancial capital and European equities when they were a trifle out of favour (!) and that my equity income and bond holdings have also become rather fashionable.

I have less flexibility with my group pension but it's also had a good year.

dunstonh

I have tried to use an IFA and like I said previously I have found that they tend to sit on the fence which is of no use to anyone.

There are something like 25,000 advisers out there. I am not entirely sure you have used IFAs in each case as what you describe is more FA than IFA. (research has shown that over half of those that saw an FA thought it was an IFA. Until recently, FAs outnumbered IFAs)

At the moment I pay into a group pension scheme that is with Scottish Widows, the money is in the Pens Portfolio 2 fund, which is a balanced fund. I have been in discussions with my IFA about moving some of it into another fund and redirection my contributions into the new fund. Guess what.............. I cant move some monies I have to move the lot, so that was great advice I had originally from my IFA, doesn't exactly have the flexibility I wanted.

The group scheme you have is a basic scheme by the sounds of it offering basic options. The fund you have is a transactional fund (ie one you use when you dont employ an adviser on servicing basis or do the work required yourself). To switch funds does not require you to change the whole pension. However, the fund you have isnt designed to do work with single sector funds as it is a portfolio in itself. There will be other funds available. Although I am not sure if you are really suited to them. It sounds as though a transfer out was being investigated with the option to stay paying a regular to that scheme. A valid bit of research to find out but is not often possible. Useful when it is though. I fail to see how the IFA can be blamed for your employer not allowing that option (as ultimately it is between the employer and administrator of the scheme/provider as to whether that option is available or not)

As it is a group scheme, I am not sure how you class it as poor advice as going with a different scheme and not getting the "free" employer money would be poor advice.

There could be another reason why past advisers sit on the fence with you. You appear to be quite stuck in your opinions and are not really listening or understanding what is being said and are quick to point blame. That type of individual is very hard to deal with and a risk to the IFA. No IFA wants a client like that.

tony4147

dunstonh wrote: »

There are something like 25,000 advisers out there. I am not entirely sure you have used IFAs in each case as what you describe is more FA than IFA. (research has shown that over half of those that saw an FA thought it was an IFA. Until recently, FAs outnumbered IFAs)



The group scheme you have is a basic scheme by the sounds of it offering basic options. The fund you have is a transactional fund (ie one you use when you dont employ an adviser on servicing basis or do the work required yourself). To switch funds does not require you to change the whole pension. However, the fund you have isnt designed to do work with single sector funds as it is a portfolio in itself. There will be other funds available. Although I am not sure if you are really suited to them. It sounds as though a transfer out was being investigated with the option to stay paying a regular to that scheme. A valid bit of research to find out but is not often possible. Useful when it is though. I fail to see how the IFA can be blamed for your employer not allowing that option (as ultimately it is between the employer and administrator of the scheme/provider as to whether that option is available or not)

As it is a group scheme, I am not sure how you class it as poor advice as going with a different scheme and not getting the "free" employer money would be poor advice.

There could be another reason why past advisers sit on the fence with you. You appear to be quite stuck in your opinions and are not really listening or understanding what is being said and are quick to point blame. That type of individual is very hard to deal with and a risk to the IFA. No IFA wants a client like that.

Apart from my first adviser 20 years ago, my other 2 advisers have been IFA's.
I didn't pick the group scheme, the IFA did, so yes I have every right to hold him responsible with recommending a scheme that is inflexible. I would like to move 50% of the monies out of the pens portfolio two into another fund, but I can't, that is what I have been told by my IFA - "Scottish Widows have confirmed my fears that, including future contributions you either need to be fully in, or out the Portfolio options Scottish Widows". The only saving grace is that the charges are 0.7%.

tony4147

dunstonh wrote: »

There are something like 25,000 advisers out there. I am not entirely sure you have used IFAs in each case as what you describe is more FA than IFA. (research has shown that over half of those that saw an FA thought it was an IFA. Until recently, FAs outnumbered IFAs)



The group scheme you have is a basic scheme by the sounds of it offering basic options. The fund you have is a transactional fund (ie one you use when you dont employ an adviser on servicing basis or do the work required yourself). To switch funds does not require you to change the whole pension. However, the fund you have isnt designed to do work with single sector funds as it is a portfolio in itself. There will be other funds available. Although I am not sure if you are really suited to them. It sounds as though a transfer out was being investigated with the option to stay paying a regular to that scheme. A valid bit of research to find out but is not often possible. Useful when it is though. I fail to see how the IFA can be blamed for your employer not allowing that option (as ultimately it is between the employer and administrator of the scheme/provider as to whether that option is available or not)

As it is a group scheme, I am not sure how you class it as poor advice as going with a different scheme and not getting the "free" employer money would be poor advice.

There could be another reason why past advisers sit on the fence with you. You appear to be quite stuck in your opinions and are not really listening or understanding what is being said and are quick to point blame. That type of individual is very hard to deal with and a risk to the IFA. No IFA wants a client like that.

So you don't want a Client that ask questions about HIS money? and the returns?

dunstonh

I didn't pick the group scheme, the IFA did, so yes I have every right to hold him responsible with recommending a scheme that is inflexible.

How did the IFA pick the group scheme? The employer picked the group scheme.

I would like to move 50% of the monies out of the pens portfolio two into another fund, but I can't, that is what I have been told by my IFA - "Scottish Widows have confirmed my fears that, including future contributions you either need to be fully in, or out the Portfolio options Scottish Widows". The only saving grace is that the charges are 0.7%.

As I said, it is a basic option which most employers seem to prefer.

So you don't want a Client that ask questions about HIS money? and the returns?

I love client that ask questions. I dislike clients that don't listen or try to understand at least the basics.