Are pensions even worth it?

EdGasket

It was a Standard-Life personal pension with the choice of about a dozen funds; two of which were billed as 'cash - safe haven' funds. Safe apart from the hole in the bottom leaking away the value of my pension pot.

dunstonh

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.

That is because it is not cash as in a savings account. It will be money markets and some near cash assets. Also, fund houses do not get FSCS protection for each investor. so if some deposits were held in banks that failed, then losses there are possible. With interest rates low, this was always likely to happen.

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.

Lesson not learnt obviously. Your conclusion is flawed. It is like comparing a car with petrol.

Well the fund managers should not be charging more in fees on a cash fund than the fund is earning in interest.

Why not?

'My experiences are my fault'?? Not really my fault, just what happened and I would say the fault of the pensions industry.

You made an incorrect assumption and a decision that was wrong without anyone being involved. You then blame it on pension providers who are little more than administrators that carried out your request. How is that their fault?

EdGasket

Why not?
Because it is reasonable to expect a positive return and investing cash is not very demanding therefore they should not charge so much for it as to make an overall loss for their customers.
How is that their fault?
Because the pensions industry pressurises the public into saving into their products which then don't deliver on their promises and projections

dunstonh

Why not?
Because it is reasonable to expect a positive return and investing cash is not very demanding therefore they should not charge so much for it as to make an overall loss for their customers.

And how would you have got a positive return in investing in cash then if you were in their shoes?

How is that their fault?
Because the pensions industry pressurises the public into saving into their products which then don't deliver on their promises and projections

They dont make promises. They give example projections using example assumptions. Sometimes those assumptions will understate, sometimes overstate. However, that is usually why there are multiple figures given so you can get a range of examples.

What has the pension industry got to do with your choice to invest in a money market fund?

Linton

EdGasket wrote: »

Why not?
Because it is reasonable to expect a positive return and investing cash is not very demanding therefore they should not charge so much for it as to make an overall loss for their customers.
How is that their fault?
Because the pensions industry pressurises the public into saving into their products which then don't deliver on their promises and projections

A Cash fund will pay a return based on the international money market rates which as I have said have been more or less zero for the past 6 years. Dont confuse this with the loss-leader rates offered by the banks to attract customers.

The way most funds work, and their customers want them to work, is that they have to invest in what their remit demands, and they have to pay their employees. Its no good you saying "why didnt you simply keep the money in a safe" - they cant.

grey_gym_sock

if you are on a low wage, and don't manage to save more than a tiny amount, then you'll only be able to retire when you reach state pension age. but it's still worth saving something for retirement, because that will give you something extra on top of the £144 per week state pension.

note that the idea of the state pension reforms is to change the current situation where small savings can be pointless because you just lose benefits pound-for-pound. the aim is to have a higher basic state pension, less means-tested benefits, and so more point in making your own provision.

as to where to save for retirement ... if your employer has a pension scheme where they pay in something if you do (and all employers will have to start doing this soon), then that's the best place to start. if not, then you might prefer to use S&S ISAs instead of a pension.

Linton

[QUOTE=EdGasket;64314431....
Because the pensions industry pressurises the public into saving into their products which then don't deliver on their promises and projections[/QUOTE]

Who pressurised you into investing in a money market fund?

EdGasket

"And how would you have got a positive return in investing in cash then if you were in their shoes?"
I think if I couldn't, I would be too ashamed to call myself a fund manager. BY CHARGING LESS OF COURSE!

Anyway no point keep arguing; I've said what I think; it's up to readers to decide for themselves on the merits or not of pensions based on opinions given and their own research.

lisyloo

it's up to readers to decide for themselves on the merits or not of pensions based on opinions given and their own research.

I enjoy the merit of 40% tax relief, 5% employer comtributions, low charges and a very wide choice of funds.

"pensions" are merely a wrapper.

What you are saying is a bit like "cars are rubbish" because you bought a 1970's Skoda.

dunstonh

EdGasket wrote: »

"And how would you have got a positive return in investing in cash then if you were in their shoes?"
I think if I couldn't, I would be too ashamed to call myself a fund manager. BY CHARGING LESS OF COURSE!

Anyway no point keep arguing; I've said what I think; it's up to readers to decide for themselves on the merits or not of pensions based on opinions given and their own research.

Or lack of research as it is in your case.

How would you pay your bills if you had no income?

What you are saying is a bit like "cars are rubbish" because you bought a 1970's Skoda.

His argument is more like saying cars are rubbish because colour of the screenwash is green and not blue.