Personal Pensions - Confused!

zagfles

dontpanick wrote: »

Thanks for your response

Yes, I get the impression they are reluctant to set up a NEST one which is fine by me if it is a bad deal.


Could you say why you don't think it would be a good idea to consolidate my other pensions?

NEST isn't a bad deal - ignore all the scare stories. The charges are low, there is a contribution charge but the annual charge is lower than most pensions and you don't need to pay intermediaries or worry about choosing your own investments. It's got some restrictions eg on transfers but think they're temporary. The performance isn't bad, not the best but better than a lot of pension schemes. See:

https://www.nestpensions.org.uk/schemeweb/NestWeb/includes/public/docs/NEST-Quarterly-Investment-Report-March_2016-June_2016,PDF.pdf

the_fly

zagfles wrote: »

NEST isn't a bad deal - ignore all the scare stories. The charges are low, there is a contribution charge but the annual charge is lower than most pensions and you don't need to pay intermediaries or worry about choosing your own investments. It's got some restrictions eg on transfers but think they're temporary. The performance isn't bad, not the best but better than a lot of pension schemes. See:

https://www.nestpensions.org.uk/schemeweb/NestWeb/includes/public/docs/NEST-Quarterly-Investment-Report-March_2016-June_2016,PDF.pdf

i am 40 and only recently started paying into my workplace NEST. I am in a position to pay 300 per month, but it low pay work and they only put in 1 %. How much will i have after 30 years and does it seem sensible considering NEST manage it for you so takes the worry out of it?

tacpot12

To the fly: My guess is that after 30 years you would have about £315,000. But there are a lot of BIG assumption in this guess, such as your 300/month being a gross figure after tax relief, a average annual return of 6% (which is by no means guaranteed), no increase in your contributions and I've no idea on you salary, but have assumed £15000/yr. It is an extremely rough calculation, but hopefully it will give you something to help judge whether it is worth it.

But in 30 years time £300,000 might be worth the same as £200,000 today, or only £100,000. If we assume it is worth the same as £150,000 today, your pension might be about £10,000 a year if you are prepared to retire at 70 and to plan to only live another 15 years. If you plan to live to a hundred, it's going to be half that amount. Is that worth it to you?

NEST managing anything wouldn't take the worry out of it for me because they don't have a track record, but they do employ professional advisors so they should produce better returns than a self-managed portfolio, but this is also far from guaranteed.

the_fly

thanks for the reply, i think it should suit me to start with anyway in the short term as i am very late in starting.

i guess i can reassess if need to going forward

Spreadsheetman

dunstonh wrote: »

There is no standard Government one. The Government set the rules for auto-enrolment but they do not manage any schemes. NEST does receive funding from the taxpayer and makes a very good job of losing money.
.....

Could you expand on your comment about losing money?

(genuine interest - I am auto-enrolled via my employer, but it is a tiny sum and not part of my own pension planning, so it was easier just to go with it for the employer match rather than opt out)

dunstonh

Spreadsheetman wrote: »

Could you expand on your comment about losing money?

(genuine interest - I am auto-enrolled via my employer, but it is a tiny sum and not part of my own pension planning, so it was easier just to go with it for the employer match rather than opt out)

It was reference to NEST as a company and not the individual plans. They have only been going a shor time but they lost £1.4m in a fraud (with only £300k recoverable). It was mandate fraud. So, should have been avoidable and perhaps their immaturity as a company was a cause.

They also receive funding from a loan by the Treasury. That is unique to them. No other provider gets this. They have had to go back and ask for more as they are not where they said they would be. They have £460m borrowed from the taxpayer (March 16). However, they only collected £9m in charges on their plans over the year to March 16. It borrowed £78m extra over that year.

NEST is a money pit sucking in taxpayers money. It may be in the form of a loan but if there isnt much chance of getting that money back, then a chunk of it will likely be written off at some point.