Friday, Aug 06, 2010
More institutionalised cr*p, sorry, theft
Welcome to the UK pensions saving casino: Save our Savers
Picture a shabby casino whose lights are grubby and dim, making it tricky to get a clear view of what’s going on. There’s a sordid air about it, a palpable sense of despair at repeatedly handing over piles of cash only to end up empty-handed. A weary resignation pervades that, in reality, only the House ever wins.
Posted by mr g @ 08:02 PM (1301 views) Add Comment
29 Comments
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1. braindeed said...
Boomers Union issues statement shock!!!
SaveOurSwag...accumlated their house 'wealth' and savings through years of rampant inflation. It was always thus, and it has been accepted practice that as you get older in retirment, life gets a little shabbier. We need that to give the kids a chance - just how long do you think you'll live, and do you think you can take it with you?
2. mr g said...
@Braindeed
As I have always said, it's not just the boomer generation who have been greedy, sunshine.
Read the post on HPC, Wednesday, Aug 04, 2010, "The new bankrupts!"
Now that's real greed and avarice for you and not one of them has reached 50 years of age!
3. estrader said...
Become a lender instead of a saver.
http://uk.zopa.com/ZopaWeb/
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11. Simon said...
A significant number of BTL'ers didn't do it out of greed but cos they couldn't think of any other way to provide for their old age .
Unfortunately it's going to be neccessary to smash the public sector pensions to bits so that they are in the same boat as the rest of us ,
We are all in this together right ?
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15. hpwatcher said...
go look at my posts
I have looked at your posts, and you don't offer anything especially illuminating. All you do is attack others; so most people on this site regard you as a troll.
Please feel free to prove me wrong, and post something about house prices and the economy.
16. braindeed said...
H Pee whined....so most people on this site regard you as a troll.
only in your head
17. enuii said...
Yawn! Handbags at dawn is it today?
18. iguana said...
enuii
I agree, when children go to bed too late they get fractious.
placing placebo-treated (?)
19. hpwatcher said...
All i'm trying to do, is to get branideed to give some opinion and/or information instead of the usual boring self satisfied snide comments.
Although, it seems that anything useful that requires any thought is way beyond him/her.
20. miken said...
I disagree with this article where it states:
"This isn’t any old seedy run-down joint, though, it’s the UK pensions saving casino where most of its millions of working citizens must play if they want to build a lump sum big enough to provide a private pension in retirement."
er, no there's an alternative which is NOT to invest in a private pension or to only invest in a pension which is linked to bonds/gilts. Cash will become more king as more and more people become financial savvy. More and more people will realise that shares are part of a pyramid scheme which is gradually falling down as more and more people choose not to invest in them (and as more and more people retire, etc.).
21. estrader said...
16. Miken, no offence, but you don't really understand shares if you think they are a pyramid scheme.
22. miken said...
er, no offence, but try going to wikipedia before you type estrader: http://en.wikipedia.org/wiki/Pyramid_scheme
"A pyramid scheme is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, without any product or service being delivered. Pyramid schemes are a form of fraud.[1]"
They are a pyramid scheme when you consider them over a long period in time. As time goes on you need more and more people to invest in them otherwise the share prices fall and keep falling. You need to replace the investment lost by the shares cashed to fund retirement.
To young people the scheme is a pyramid scheme because they are highly unlikely IMHO to see any benefit from their pension contribution because it would have already been cashed by people who are nearer their retirement age.
23. estrader said...
milken "but try going to wikipedia before you type estrader"
*LOL* *LOL**LOL**LOL**LOL* absolutely ROFLMAO!!
No offence, but you can't possibly imagine how much of a belly laugh that comment gave me. I was investing in the stock market LONG before wikipedia was invented. You have now proved I what I said earlier.
What does wikipedia say about house price? *LOL*
24. hpwatcher said...
More and more people will realise that shares are part of a pyramid scheme
I think I partly agree with what Milken is saying, that shares are an inflated asset. One of many inflated assets....it's where a lot of QE money ended up.
25. estrader said...
An asset being over-priced (for whatever reason) is not the same as a pyramid scheme. They are so different it is not even close. A pyramid scheme is exactly as defined earlier " the exchange of money primarily for enrolling other people into the scheme, *without any product or service being delivered*". ie/ New money is used to pay existing investors directly without any intellectual property, physical property, goods or services exchanged.
As for shares - No matter how over valued a share it entitles the shareholder to a part ownership and share of a company's assets and profits whether that company is manufacturing a product or providing a service. If the company business grows, its profits grow and the value of the shares usually increases proportionally (except in the case of bubbles and hysteria). This reflects the increase in *enthusiasm* people have to own those shares, it does not mean an increase in the number of shareholders, even though there may also be many more new shareholders as a result of the enthusiasm. The number of shares a company has on issue rarely changes over the years thus completely and utterly debunking the myth that they are a pyramid scheme. There is no argument or debate. Shares are nothing like, not even partly like a pyramid scheme.
26. miken said...
estrader, I'm generally talking about shares in relation to pensions here. When you pay into a pension usually your money goes into a whole load of companies. During your working life you can't normally claim you own part of a company that your pension scheme is investing in. These shares are then sold by your pension provider when you near retirement age. You don't usually see what shares are being sold. So if those shares are virtually worthless (or worth the same) when you near retirement then IMHO you can draw a parallel between a pension scheme and a pyramid scheme. Where *without any product or service being delivered* is where you end of with virtually worthless shares (or haven't gained anything) because everyone else has been selling whilst you were paying into your pension.
I noticed the following article that agrees with my statement: http://www.apocalypsesoon.org/xfile-44.html
Go section titled "The Stock Market".
It states:
"The sad fact of the matter is, today's stock market is an "investment pyramid" that will continue to survive only so long as new money is pumped into it. When new money ceases to flow into the pyramid, it will collapse just as surely as the real estate pyramid collapsed in the late 1980s and Ponzi's failed in 1920. "
Pension providers are the ones who enrol poor unwitting young people into their schemes and perform the exchanging of money for what could eventually be worthless or low value shares. The more people the pension provider enrols the larger the pot of money becomes and so more shares can be purchased. So IMHO it is a kind of pyramid.
27. estrader said...
Miken,
All bubbles burst but this still shouldn't be confused with a Pyramid scheme. Even what you say about the stock market doesn't make it a pyramid scheme even though it often runs on the greater fool theory. If you bought a share today for £x and it pays a dividend yield of 5%, then you have got your money back in 20 years. So, even it is 'only' worth the same in that time you've doubled your money haven't you? Or, put it another way, the shares have paid for themselves after 20 years so whatever they are worth is pure profit. You will only lose everything if that company has gone out of business and even then you might still get something. This doesn't happen in a Ponzi or Pyramid scheme. You either make a huge amount of money before it blows up or you lose everything, there is usually nothing in-between.
28. rumble said...
"will continue to survive only so long as new money is pumped into it" -- that's just describing any business. The stock market doesn't give returns where none are due, as per ponzi. You simply take da pain. The described pointless pension was simply not worthwhile, a bad investment.
"The more people the pension provider enrols the larger the pot of money becomes and so more shares can be purchased." -- but no undue returns to anyone - no pyramid.
29. Jimmyb said...
I have read a few articles recently about large pension charges, this is the real issue not whether shares go up or down, in my opinion.
If one puts their pension into a simple tracker fund they should get the benefit of pound cost averaging (buying shares cheap when the market is low) and then the advantage of having a high fund value when the market is high. If one remembers this and cashes in their pension when the market is high you should do ok. However in my opinion the advice dished out by very poor advisors is the real problem, most advice is to put your money in to a safe cash rich fund near the age of 55-60 whatever the market condition. The advisor is only interested in making money and here is where the big problem lies and the fact that most of them are not financialy savy.
Finaly find the best paying annuity rather that going with your current pension provider can give you an additional 20%.