Is a Pension Worth Having?

lisyloo

2. They largely come out of your pocket anyway so little advantage.

But in many schemes where they do pension matching, you get Zero if you don't contribute.

The vast majority dont get any choice.

Ok but some these days are low cost SIPP from low cost providers like hargreaves lansdown. If yours is unnsatisfactory have you taken it up with your employer?

ALL schemes have very high charges, you just dont see them.

Bigger than 45.8%?
I simply am not taking this at face value.
Please present the evidence of say funds at a provider like hargreaves lansdown, or Novia.

In reality no one knows what the actual costs are because the fund managers are allowed to hide them.

Well I have an ISA and a SIPP with the same provider (Novia) which happen to have the same portfolios so I can do a direct comparison actually.

Are these the same funds that you'd access in an ISA? in which case don't you get the same charges OUTSIDE a pension? or are you claiming these are special charges for pensions?

Nitram29

BookerTee wrote: »

So everyone has to be treated like a child because a few shouldnt be out on their own?

Maybe you should consider Warren Buffets bet.

Apparently we do need to be treated like children, I can't even buy more than two packets of paracetamol in case I swallow them all at the same time. People need to be protected from themselves.

This is not necessarily my view, but it is what ensures that the regulation in all walks of life will remain. Even with waivers to say "I know what I'm doing" people will then go to trial by social media or court saying nobody explained to that signing the waiver meant they had no comeback.

AlanP_2

In answer to the question posed - YES in virtually all cases.

Reasons - READ THE THREAD!!!!!!

atush

BookerTee wrote: »

That isnt always an option.



i.e 75% is taxed, 0% is taxed in your own fund.

100% is taxed in your own fund, as you bought it with taxed money.

And depending on the level of dividends, you may have income tax to pay on it.

AnotherJoe

BookerTee wrote: »

Whilst there is a clear tax benefit to saving money into a pension fund (at the time). I am not sure it is of much benefit by retirement.
Mainly because pension funds are very expensive in terms of charges which are generally hidden. So the declared cost plus what you are losing in the background could be 2-2.5%
£10,000 compounded over 40 years at 7% is £150,000
£10,000 compounded over 40 years at 4.5% is £58,000
You wouldnt have anything like £92k losses outside a pension fund.




Granted a personal fund would be classed as an asset if you were out of work. It depends how pessimistic you want to be about life and think that the state should look after you. But if you are not working youre not paying into a pension either so it gets you either way. Pension funds go up, and down. I dont think other investments are any less protected, BHS staff might have a view on that.

Whats a "pension fund" ??????????????

If you mean " a fund within a pension" then theres no need to pay more than you'd pay in an ISA.

Anyway, I'm out as i misunderstood your original post, i thought you were someone that genuinely wanted to know rather than stick to your faulty assumptions come what may.

atush

BookerTee wrote: »

You didnt read any of the previous posts did you...

I am sure they did. But were so full of incorrect information (such as most people buy annuities) that they didnt affect the situation of getting such a huge tax break.

BookerTee

atush wrote: »

100% is taxed in your own fund, as you bought it with taxed money.

And depending on the level of divends, you may have income tax to pay on it.

The point is that its your money you are not taxed at the end. Like betting tax you can pay on your bet or pay on your winnings, which costs you more?

BookerTee

AnotherJoe wrote: »

Whats a "pension fund" ??????????????

If you mean " a fund within a pension" then theres no need to pay more than you'd pay in an ISA.

Anyway, I'm out as i misunderstood your original post, i thought you were someone that genuinely wanted to know rather than stick to your faulty assumptions come what may.

Unless you have a Sipp or SSAS (which most dont) you have NO IDEA what charges are applied to the scheme.

I am looking for genuine reasons not assumptions or misconceptions, an 'opinion' need a bit more back up.

lisyloo

BookerTee wrote: »

The point is that its your money you are not taxed at the end. Like betting tax you can pay on your bet or pay on your winnings, which costs you more?

If you are a higher rate tax payer when earning and a basic rate tax payer in retirement then it's costs you more to invest OUTSIDE a pension.

If you are a basic rate taxpayer when earning and a basic rate taxpayer in retirement it's still costs you more to invest OUTSIDE a pension as you have 25% tax free plus 11K per annum tax free.

Can you give a scenario where that's not true.
BACK IT UP, otherwise no one will believe you.
Give us a scenario and figures.

greatkingrat

Pay in £1000 to ISA, get 5% growth, end up with £1050, which can be spent tax-free.

Pay in £1000 to pension, get £250 tax relief from government, get 5% growth, end up with £1312.50. You can take £328.12 as a tax-free lump sum, then you pay 20% tax on the remainder. So you end up with (328.12 + 984.38 * 80%) = £1115.62 after tax.

And that's without taking into account possible employers contributions, salary sacrifice etc.

BookerTee wrote: »

Unless you have a Sipp or SSAS (which most dont) you have NO IDEA what charges are applied to the scheme.

I am looking for genuine reasons not assumptions or misconceptions, an 'opinion' need a bit more back up.

Equally, just because you may be in a scheme that has excessive charges, doesn't mean everyone else is paying high charges.