Are pensions even worth it?

Thrugelmir

regprentice wrote: »

Sympathise with the op. Got my pension statement the other day and was alarmed to see that the lowest projected retirement income was actually less than i pay in every month!

A wake up call to save more perhaps......

DiggerUK

borderline, as you can see you have been given quite a frosty reception. That's quite normal around here if you are critical of, or question the value of a private pension.
Don't be put off requesting a solution to your problem. Some more details would be handy.
Putting by for retirement is daunting, but not rocket science either.
..._

Linton

regprentice wrote: »

Sympathise with the op. Got my pension statement the other day and was alarmed to see that the lowest projected retirement income was actually less than i pay in every month!

How long have you been paying in for? The projected retirement income will increase over time. Also the projection may well be in current values - ie the actual projected income will be much higher because of inflation.

dunstonh

regprentice wrote: »

Sympathise with the op. Got my pension statement the other day and was alarmed to see that the lowest projected retirement income was actually less than i pay in every month!

You do need to look at the assumptions. If they are using low growth rates and factoring in inflation and using annuity rate assumptions that are unrealistic for you (many frequently use the lowest annuity rate going) then the figure would be low. However, that doesnt mean that is what you are going to get.

These things are only ever as good as what you pay into them. They will provide a higher income than cash savings. So, if the pension alarms you then at least feel happy that if you were not using one, it would be even worse.

Linton

borderline wrote: »

If I get paid peanuts, I can only pay with peanuts.
Maybe I should open a peanuts business:rotfl:

If you dont put money aside for your retirement your retirement income will amount to £144/week state pension. How's that for peanuts. Pensions are the most tax-efficient way of saving money.

EdGasket

For some months my pension was invested in a 'Cash' fund because I was worried about stockmarket declines but it's value in the cash fund still declined. On investigation I discovered that the amount the fund managers were taking in fees far exceeded the paltry interest their 'expertise' was earning me. Lesson learned: Pensions are basically a gravy train for IFA's, fund managers, and all the other hanger-ons. Not really worth it except for higher-rate taxpayers.

Linton

EdGasket wrote: »

For some months my pension was invested in a 'Cash' fund because I was worried about stockmarket declines but it's value in the cash fund still declined. On investigation I discovered that the amount the fund managers were taking in fees far exceeded the paltry interest their 'expertise' was earning me. Lesson learned: Pensions are basically a gravy train for IFA's, fund managers, and all the other hanger-ons. Not really worth it except for higher-rate taxpayers.

Well, if you are going to invest in cash funds that's what you get. Commercial cash rates since the crash have been more or less zero. Any reasonable investment would have done far, far better over the long term. Your experiences are your fault, not a feature of pensions.

Lokolo

EdGasket wrote: »

For some months my pension was invested in a 'Cash' fund because I was worried about stockmarket declines but it's value in the cash fund still declined. On investigation I discovered that the amount the fund managers were taking in fees far exceeded the paltry interest their 'expertise' was earning me. Lesson learned: Pensions are basically a gravy train for IFA's, fund managers, and all the other hanger-ons. Not really worth it except for higher-rate taxpayers.

Are we talking about pensions or funds here? They're different things! One is a tax wrapper, the other is a type of investment!

As for the OP, from 20 years working, the average amount is £150 a year. And you wonder why you get rubbish out? You most probably spend more than that on takeaways a year.

EdGasket

Well the fund managers should not be charging more in fees on a cash fund than the fund is earning in interest. It's not as though they are doing anything much for the amount they are charging is it?
'My experiences are my fault'?? Not really my fault, just what happened and I would say the fault of the pensions industry.

Lokolo

EdGasket wrote: »

Well the fund managers should not be charging more in fees on a cash fund than the fund is earning in interest. It's not as though they are doing anything much for the amount they are charging is it?

They do an awful lot actually. Even if they are overpaid a little, there is still a lot of work they do on a day to day basis. They don't just sit there, open up a bank account and put your money in a high street savings account!