Should I stop paying into my company pension?

Triumph13

Richard_Dyer wrote: »

My contributions amount to around £8,000 pa but the value of my pot is only growing by half that amount. I'm basically loosing £4,500 a year by paying into a pension.

Given we have been experiencing a multi-year bull market in equities and bond prices have also been driven through the roof by low interest rates, I have to ask what on earth have you been investing your pension funds in? Just because you seem to have made spectacularly bad investment decisions does not mean that pensions are a rip off. If you'd just plonked your money in almost any mainstream tracker fund you'd be sitting pretty at the moment.

dunstonh

My stakeholder pot with Legal & General is only work about £76k and my forecasted pension earnings is estimated to be £1,600 pa. Who could live on that.

First of all, it is not a forecast. It is a projection. A forecast is something that is likely to happen. A projection is an example of what could happen using a fixed set of assumptions. Those assumptions may or my not be applicable to what you would do or the reality of your situation.

Projections are currently massively understating the likely outcomes that most people will use. Mainly as they usually assume joint life annuity on an RPI or similar indexation using rates that are below current market levels. i.e. quoting something that the vast majority of people don't buy and didnt even buy when annuities were the norm. They also factor inflation in at 2.5% p.a. to give you a figure in todays terms. So, you cant look at the current value and contributions as being relative to that figure. Finally, the low rate tends to show a loss position, the mid figure little or no growth and the high figure is often showing less than what most people get.

My contributions amount to around £8,000 pa but the value of my pot is only growing by half that amount. I'm basically loosing £4,500 a year by paying into a pension.

No you are not. There has been no recent stockmarket crash. Last was Autumn 2015 and that recovered in a little over 3 months - back to 2009 for the last large one. So, what you describe is not possible unless you misreading it or investing in something unconventional and non-mainstream that is dodgy.

In hindsight I wish I had never got involved with pensions.

Maybe it would be better to get more involved in pensions and actually understand what you have, how it is invested and what it does for you rather than making decisions based on a lack of knowledge.

If I had invested all the money I've wasted on pension contributions into buying property, I would have been retired and livening a comfortable life on rental earnings at least 10 years ago.

Rubbish.

If somebody stood the person who persuaded me that contracting out and buying into personal pensions and pie in the sky final salary schemes was a good idea, I'd punch them square in the face.

Contracting out into a personal pension has been a good thing for most people who contracted out. In 1996, it was found that everyone who had contracted out prior to that date was financially better off. Labour reduced the rebates after they got into power in 1997 (stealth tax) although they did improve them again towards the end of their time in power). However, even during those years it was considered more or less cost neutral. With the introduction of the single state pension, those that contracted out have done well out of that.

The vast majority of final salary schemes pay far in excess of any other method going vs the cost to the individual.

Rant posts tend to be better based on fact. However, if you knew the facts, you wouldnt likely be ranting as you would realise that there is little to rant about.