MSE News: 'Murky' pension practices to be tackled

gadgetmind

DiggerUK wrote: »

Why should a pension be deemed the only way to fund retirement. That is my argument

Yes, it's definitely your argument and well recognised style.

http://en.wikipedia.org/wiki/Straw_man

bmm78

DiggerUK wrote: »

You will always have difficulty stopping fools being fools, but don't punish the wise
..._

The challenge is to separate the fools from the wise, or do you just apply the same rules to everyone and accept that some people will squander their money and inevitably fall back on the state?

The principle of Flexible Drawdown is the right one, as it allows those who can a demonstrate a long-term secure income full access to their pension. The evidence so far has been positive, with the vast majority of clients resisting the urge to blow the entire pension fund, which strengthens the argument for allowing savvy investors greater control of their pension.

The rules probably need some common-sense amendments to take account of other assets and dependable sources of income, but that is something that can addressed in the future.

gadgetmind

DiggerUK wrote: »

I am arguing for changes to a system of pensions that is slowly falling apart and will soon not be fit for purpose.

Yes, but you're building bad arguments on top of a position of ignorance. To say that this isn't helpful or constructive is an understatement.

Grendel51

Yes there are alternatives to a conventional annuity, ie drawdown, fixed term annuties. enhanced annuities etc. I think though the problem lies in the fact that approaching retirement the insurance company writes to their client and they take what is on offer from the company. No one should take the annuity from their pesnion provider without consulting a financial advisor. Yes he or she will charge a fee for the advice, either directly or via your pension fund, but I am sure no one on here who has a pension worked for free. But what he will do is to assess your situation and what YOU want and need and will carry out the research. Annuity rates change all the time and he will find you the best rate at that time. You may want to index your pesnion payment, in which case he will advise you the difference between a payment that increases and one that remains level throughout the term. He will take into account your health, whether you smoke, where you live, whether you want to add a widows/widowers pension should you predecease your spouse. There are all sorts of options available but to get the best deal you need to shop around. A place to start is the Governments Money Advice Service on their website at money advice service - look for annuities and pensions comparison tables - you need annuities. (sorry this site wouldn't allow me to put the link in in case it is spam - fair enough) I know people are reluctant to go to an advisor because they feel they will be fleeced - but if paying an initial fee gets you a better income for the remainder of your life then surely that is a small price to pay.

Freecall

gadgetmind wrote: »

Yes, it's definitely your argument and well recognised style.

http://en.wikipedia.org/wiki/Straw_man

Thank you gadgetmind for identifying the underlying structure of the argument.

Here is the evidence to support your conclusion.

I said in post 14

Freecall wrote: »

I am all for empowering people to manage their own affairs but I expect that many more fail to look after their long term interests than you think.

You only have to look at how many come on here to find out how to cash in their pensions in early middle age. So many that there is even a sticky on it.

The response to this from DiggerUK in post 15 was (my highlight)

DiggerUK wrote: »

The scandal in this day and age, is that many struggle to put anything by for retirement. And you say that most will squander it....no they won't.
Most asking how to cash in early just want the option of total control of what they regard as their money, not because they are squanderers.
To label them as such is a throw away insult because you have no idea why they want their money.

You will always have difficulty stopping fools being fools, but don't punish the wise by treating them as cannon fodder for the usual vultures in the pension industry.
..._

It wasn’t even a quote taken out of context, it was simply made up to make an attack easier.

I decided to correct it for the record in post 16 and then bow out of what was ultimately likely to become another slanging match.

There are some good and interesting debates on MSE but this is not one of them.

dunstonh

There are some good and interesting debates on MSE but this is not one of them.

It is a bit like reading the comments section to a Daily Mail article. I am half expecting someone to post "vote UKIP as they wouldnt allow this" at any point.

MFW_ASAP

Digger was clearly angling for an argument, you could see from the way he ignored all attempts to educate and update his pensions knowledge. I knew it would be a waste of time trying to correct is mistakes and misunderstandings about pensions as I could see that he wasn't interested and just wanted to have an anti-pension rant.

Far better with these people to just take a passive approach and suggest they just don't use a pension if they don't like them. As you can see from his absence, it takes the sting out of his argument.

DiggerUK

I need no updating, lecturing, or educating, about my defined benefit, and my local government index linked final salary pensions. Both are fit for purpose and will give me good provision in retirement. I don't need to be told what the difference is between them, and a private pension scheme .......I already know to my benefit.

With the ascendancy of private salary schemes, the constant exposure of their inadequacies, and the massive discrepancy in annuity rates, it is plain as day that changes must happen to minimise the fleecing.

My simple argument that power should be given to retirees to decide what happens with their pot by allowing 100% lump sum encashment, is not Daily Mail, just right. But by christ has it got you all vexed.

The counter arguments here that the nanny state should dictate to save people from their own follies is risible.
It does mean you are claiming retirees are incapable of handling their own affairs because they would only go and squander, waste, or p1ss their pot up the wall, and then claim benefits is without merit, and an insult to those who have put by for their retirement years.
Have none of you heard of deliberate deprivation of assetts.
..._

lvader

You wouldn't expect all your final salary pension to be available in one cash payment, so why a DC pension?

I have the benefit of having both a final salary pension and a personal pension, the flexibility of having both gives me more choices and opportunities than if I just had a final salary pension.

MFW_ASAP

DiggerUK wrote: »

I need no updating, lecturing, or educating, about my defined benefit, and my local government index linked final salary pensions. Both are fit for purpose and will give me good provision in retirement. I don't need to be told what the difference is between them, and a private pension scheme .......I already know to my benefit.

With the ascendancy of private salary schemes, the constant exposure of their inadequacies, and the massive discrepancy in annuity rates, it is plain as day that changes must happen to minimise the fleecing.

My simple argument that power should be given to retirees to decide what happens with their pot by allowing 100% lump sum encashment, is not Daily Mail, just right. But by christ has it got you all vexed.

The counter arguments here that the nanny state should dictate to save people from their own follies is risible.
It does mean you are claiming retirees are incapable of handling their own affairs because they would only go and squander, waste, or p1ss their pot up the wall, and then claim benefits is without merit, and an insult to those who have put by for their retirement years.
Have none of you heard of deliberate deprivation of assetts.
..._

Why do you believe your final salary & local government pensions are 'fit for purpose' when they have the same restrictions you have spent several pages (and listed again above) that prevent you accessing all of the 'pot' and accessing it whenever you want?

It doesn't make sense.