Is my pension contribution "worth it"

agarnett

colsten wrote: »

Judging by his MSE posting history, agarnett is against everything and has no alternatives to offer for anything.

Well it is only 100 posts and maybe getting on for 20 of those are on this thread alone so perhaps you could summarise the "everything" for us colsten?

For example I think you might have commented that agarnett

• hates rip off banks and insurance companies (which of them aren't in some way or another - and do you even have a clue from the high perch upon which you sit?)
• hates fuel retailers in the UK who are blatantly price-rigging
• hates the way CRAs operate outside any effective regulation
• hates the way English students in particular are being stuffed by the Student Loan Scheme and the wholly unregulated privatisation of student loans to sharks like Erudio
• isn't impressed by most politicians
• has chipped in with suggestions on diverse topics as ranging from DIY central heating troubleshoots to reliable old bangers

whereas might I be forgiven colsten for suggesting from your thread history, you appear to be another self-congratulatory type who was just loved to tell any who were interested that you are a Select customer with a £750 per day ATM limit ? ... Wooo! Who on earth needs £750 a day from the ATM on a regular basis? Oh yeah colsten does, because he also likes to tell less well off MSE'ers a day or two before Christmas that he spends twice as much as they do on good food and good coffee - Pr¤t or Pret?

Now c'mon colsten. We are actually on the same side with some of this pension stuff. You too don't spend all your time slagging off, and do offer some useful pointers on a variety of mostly banking and pensions buying. In other threads you have warned of named rip off retirement advisers and how huge numbers do not understand retirement provision.

As I have indicated earlier - posters like you can indeed sort wheat from chaff and maybe even come usefully to MSE to point out some of those who might be the chaff. The trouble is I don't think you realise that there really are huge numbers of workers who need hand-holding and full trust in government oversight of providers all the way through to retirement. That is what governments used to do 4 decades ago via the old DTI. In those days, real self-regulation and real live God-fearing boards of directors made it possible. If a life insurer or pensions company stepped out of line they really did believe they might be under threat of DTI management takeover or even forced merger with a more responsible firm. Think I am joking? You probably weren't studying the market principles and practice as closely as I was back in the days when With Profits anything was a very respected savings concept for example, whereas now, IFAs almost laugh in your face when a mere mortal asks what about With Profits? Can I get some of that ? Isn't that safest?

Since then, almost all savings and pensions providers stepped out of line (I could name probably 20 companies from back then straight off the top of my head) and the DTI and all its successors, and the absolutely appalling list of failed regulatory bodies have each singularly failed to bite any corporate miscreant any more effectively than a flea biting a dog.

That's how banks and insurers and other financial services organisations see regulators and compliance people now - pesky nuisance fleas, or at best, people they can blame now by saying "well the government/regulator didn't make the rules clear enough." or "our compliance guys were confidently advised it was legit". They fear no regulator and certainly they do not fear government.

That's why I urge that the market is shark-infested. Some people can handle sharks. Fine - it's great sport to watch, just like matched betting if you get a feel for who has been really clever against the bookies. But the pensions forum comes with no similar warnings on MSE. Can you tell us why that is? Is it for example because pensions are a no brainer whereas matched betting requires skill? Nobody gets hurt perhaps in pension plans?

Did someone say hundreds of thousands are happy with their pension arrangements? Er ... is that sort of number a satisfactory barometer ?? Whilst driving today I was musing at how powerful it would be to have a mandatory central statistical register of every single pension plan and predecessor plan for every live UK citizen that has ever had a membership of one. Reports would be publically available online. It would show comparative performances of licensed pension providers, and it would especially show together all plans that suffered such crooked structural mid-term changes as reattributions of WP funds. The relative before and after performances of such fund splits and mergers would be constantly chartable. How many tens of millions of plans and policies might that be altogether that have now or did have current live citizens names on them? And how many would be total zombie arrangements where the silent majority have just had to suck it up and forget it and "move on" ?

Think it is technically too vast to set up? Think again. It would in 2015 be a a total cinch for a small team of data scientists with a shoot-to-kill brief from government, but the providers would lobby like crazy to prevent it.

And atush ... don't worry about my kids ... they are now autonomous smarts with statistical and analytical skills better than mine ! They are also surprisingly also becoming commercially astute and customer service oriented even as university students - largely under their own part-time job steam I should add. And the Windows Phone ... give it up ... I made the same mistake in buying one for my parents while I was still a Microsoft officionado. I had a Windows Mobile for years until I finally went iPhone with my son's 3 year old old hand me down.

I never thought I'd say it but iPhone / iPad are just so intuitive that even old retired geezers can become a whizz in hours ... well maybe weeks. My son was amazed that when he checked up on how I was getting on with my first iPhone, and I said I thought it had become a little slow after a month. He found it was still working with 42 apps open at the same time! It was so intuitive to move backwards and forwards out of, and then into Apps via the home button that I had not realised I neither needed, nor ought to discover the double-click and swipe to close functions ! And I know so many first-time-ever-computerised-anything pensioners who have taken to iPads immediately.

Oh whilst gadgetmind might particularly love my comment about iPhones and iPads if it helps his share options, we must indeed not forget Android - my data scientist friends and many of his "smarts" probably swear by Android for anything geeky! They could quickly give access to their work on my new mandatory "Live All Pensions Data Audited National Cooperation Exercise" via a suitably sexily named App, I'm sure - and I'd recommend it was a free app for all, although Apple would probably cripple some of the functions or insist on a cut of the ad traffic - but no doubt all versions could still be easily self-funded by a few discreet ads for those that like that sort of thing

Anyway, Christmas fun now over, Ho Ho Ho and see you next year and all that!

:santa2:

taktikback

Beware the voice of Saruman!....

taktikback

...and good luck against Chelsea today Alf!. If ever there was an example of a corruptly funded institution playing against a home grown team of heroes....I need to get out the old videos of Bobby!...

oaeno22

I have raised the following e-petition with the title 'pension annual charges' and text as below. This will definitely make your pension contribution worthwhile.

The current charge by the regulators on a pension pot is a small percentage in the range of 0.5 to 3% of the total amount in the fund. This amount is charged regardless of how the fund performed, guaranteeing income to the fund manager and not the fund owner.

In line with the governments commitment to improve and encourage people to prepare for retirement, could the government consider passing legislation that would limit the charge on a pension fund to a percentage of the increase only in the fund. So the annual charge due to the fund managers is 10-20% of the increase in the fund for that year. If the fund performs negatively, they get nothing

link to petition is below. kindly pass on if you agree.

epetitions.direct.gov.uk
/petitions
/72320

jamesd

It would be a really bad thing for investors to have such charging because it encourages risk-taking so that the fund managers get high growth to trigger large payments to them. Then they can just close the fund or ignore it after getting an unsustainable gain that limits their future profit potential.

I've assumed that you want a high water mark to the gain charges so they can't profit just from a series of ups and downs by charging during each up then losing money and charging to get back to where they were before.

Fixed total charges are linked to the amount of work being done, which shouldn't be varying a lot. Percentage-based charges don't reflect that work but do reflect increased investor interest after doing well and are a safer way for investors to reward good performance.

Do you have any particular reason for wanting to pay managers of accumulation funds twice as much as income funds when both are invested in the FTSE? About half of the returns of the FTSE are from dividends, showing up as capital growth in accumulation funds and payments to investors with less growth in income funds. Why should the manager of one style be paid twice as much as the other?

How are you going to pay managers of bond and other income funds where there is likely to be low or even negative capital growth while they do their job of delivering interest or dividends, what the holders of those funds want the manager to be doing? You really want to reward high risk taking funds and penalise low risk taking?

kidmugsy

oaeno22 wrote: »

In line with the governments commitment to improve and encourage people to prepare for retirement, could the government consider passing legislation that would limit the charge on a pension fund to a percentage of the increase only in the fund.

Bonkers. If you don't like the charges on your pension, shop around.

atush

I agree, as it could encourage high risk behaviour.

Mortgage backed junk securites anyone?

agarnett

kidmugsy wrote: »

Bonkers. If you don't like the charges on your pension, shop around.

I see we are on Boxing Day fun times now.

oaeno22's suggestion is far from bonkers. It simply needs some obvious refinement, and that is this:

If a fund shrinks then the fund manager must make up the shortfall. Else what on earth do we pay them anything at all for? Do we pay them for rushing about like Premiership football players but in the end for conceding goals, or for being adept at scoring them and ending the year in the top five ?

Seriously, I do wonder what planet some posters come from. Fund managers are in an enormously lucrative position in the first place, being able to play with huge assets. I wonder why we must pay them any fee at all. They are not professionals. They are spivs with contacts. We don't pay to keep money in our current accounts or our savings accounts so why the hell do we pay to keep it in any other fund?

Fund managers have the privilege of being entrusted with our funds, not the other way round, especially since they have all pretty much proved so lousy at investing for us.

Fund management charges are as bogus as credit card balance transfer handling fees. In fact they are worse - the management fee system encourages fraud and secret commission deals.

The financial services industry apologists here with highfalutin ideas of what is right and fair reward in this stinking business really did ought to sit back and take a look at the shark pool their kind of talk promulgates.

London and UK invented financial services fraud as the business norm, and other's including America eventually decided if they couldn't beat us at being whiter than white due to tighter regulation of a lot of this stuff in USA, they'd better conduct their shady deals in London, and presto, you know how many of them shipped over here and became hooked on fraud too, and then realised they could hoodwink regulators on both sides of the pond and elsewhere if they exploited all the weaknesses and loopholes in and between global markets. And so round it goes and hoards of posters with money to play with and time to play it come on MSE and shout "don't spoil it" and "let's give it another turn as it stands, for it's the only game in town!" Forgive them, for perhaps they really do not know what they are wishing for.

The sad fact is that since the days three decades ago where the acronym ART was first uttered daily in the City, the world's insurance markets, capital markets, life and pensions retail and run off markets, FOREX, equities, precious metals and God knows what else have all become inextricably woven into one seething pit that is a self perpetuating monster or certainly one that harbours them.

Remember the Trash Compactor in Star Wars? That's what these markets have become and it's scary!

And we just get admonished: "Get in there, you big furry oaf! I don't care what you smell!"

Linton

agarnett wrote: »

......

Seriously, I do wonder what planet some posters come from. Fund managers are in an enormously lucrative position in the first place, being able to play with huge assets. I wonder why we must pay them any fee at all. They are not professionals. They are spivs with contacts. We don't pay to keep money in our current accounts or our savings accounts so why the hell do we pay to keep it in any other fund?
........

So much BS in these postings it's too much effort to counter every wild assertion. Lets just answer this one. Banks do charge for current accounts. They dont give you the interest they have to pay other people they borrow from. So by putting money into a current account you are kindly giving them an interest free loan to do with as they want. Under normal interest rate conditions banks' failure to pay interest represents a higher % charge for their services than that which most fund managers impose.

Those banks which are paying interest on current accounts are doing so under tight constraints as loss leaders to expand their customer base.

Fund managers cant use your money for their own purposes, for example to lend out. They can only manage your money by investing it in investments that meet their stated criteria/scope

jem16

agarnett wrote: »

We don't pay to keep money in our current accounts or our savings accounts so why the hell do we pay to keep it in any other fund?

Current accounts and savings accounts have implicit charges, investment funds have explicit charges. The only difference is that one you see (mostly) and one you don't.

The implicit charge on a savings account is the difference between what the bank earns on your money and what you earn in interest. Banks are not paying you interest out of the goodness of their hearts.

Surely you were aware of that, weren't you?