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Anyone Else Worried About Their Pension?

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I'm 30 & got a pension statement in recently. In the projected income, it says that I can expect to get 10k a year at retirement (if the fund does well) & 3k a year if the fund doesn't do so well.

There is a note about inflation to the effect that in 25yrs time, the purchasing power of the money will be half.

Reading this letter was one of the most soberig moments of my life.

I'm obviously s**ting myself and will be cranking up my % contribution asap. I mean...WTF is 5k a year gonna do for me....I'm likely to starve to death if I have to rely on this kind of figure. This will only alleviate it slightly tho.

Got me thinking about houses as well. This is one of the main reasons why I can't take on a big mortgage. I have to be able to put a good bit of money aside to help me have some sort of existence at retirement.

Pensions & Mortgages are serious stuff in our generation. Screw what the vested interests says about 'not missing the boat etc. They don't give a crap about whether u have an impoverished retirement or not.

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Why do you give money to convicted fraudsters and then express surprise that its will be worthless when they give you some back? Where do you think they got the money to pay the fines they got for their lies last time?

It amazes me that anyone still pays into these schemes to be honest.

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Why do you give money to convicted fraudsters and then express surprise that its will be worthless when they give you some back? Where do you think they got the money to pay the fines they got for their lies last time?

It amazes me that anyone still pays into these schemes to be honest.

Fair point....what's the alternative?

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BTL of course :lol:

And then we all laughed like drains......

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I'm 30 & got a pension statement in recently. In the projected income, it says that I can expect to get 10k a year at retirement (if the fund does well) & 3k a year if the fund doesn't do so well.

There is a note about inflation to the effect that in 25yrs time, the purchasing power of the money will be half.

You should also get state pension and the second state pension - worth another 7k per year - and top-ups if your weekly income is below (I think) £125. Although the risk is that the country can't afford those schemes & top-ups by the time you retire.

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Fair point....what's the alternative?

The poor house. The anti pension brigade are like a broken record, reminds me of the labour one liners that they give to their mps who repeat it as a mantra yet have no understanding of what they are saying.

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Fair point....what's the alternative?

Look after your own retirement fund. Finding good investment potential is hard at the minute but no less difficult for the pro fund managers.

The issue with putting money into some scheme or other is that you are saddled with charges (often somewhat hidden) and of course the gargantuan commissions that the sales people charge (the reason why they ridicule the idea of DIY). The smaller the amount you put away the higher the charges pro rata. This was the driver for the Blair "people's pensions" or whatever they were to be called. (Compulsory of course so his mates in the city could piss the money up the wall).

Many years ago rental property might have been a sensible answer - no one (save a few trolls on here) think that is the case now. However, buying at the bottom might be if we get back to a sensible price in line with long term trends.

The key thing is you can control your destiny. With a scheme run by someone else you must pay in no matter what and take whatever chickenfeed they throw back at you. The less money you have the more daft this idea and the more you pay (pro rata) in charges.

What if you want to retire overseas? How do you develop a fund in the currency you will need? Look at all the old farts in Spain worrying about the Euro rate - how much better if you had built up a Euro based income - you could have switched the fund over at say €1.60 when it was obvious to anyone the pound would fall and stay there.

What if you want to start a business in your 50s? All that capital sitting there. We old folks can be entrepreneurial too you know!!

Tying the money up until some arbitrary point in the future - your xxx birthday and then taking whatever you get subject to the market conditions of the day is plain silly. In the last 18 months the TFSE has varied from 6600 to 3200. Retiring at the wrong part of that swing would have cost you dear - very dear.

Its a bit more work and needs you to think a little but look after your own money and your own future. Don't trust the government (of whatever colour) to give tax breaks for ever (remember MIRAS). Don't lock money away - what if we really do get hyperinflation - will your pension provider buy gold or commodities or just watch the real value atrophy?

The fact is most people I meet are paying more interest on their mortgage than they get on their pension - if you really must borrow your own money at a loss don't complain to me when it turns to sh1t.

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I'm 30 & got a pension statement in recently. In the projected income, it says that I can expect to get 10k a year at retirement (if the fund does well) & 3k a year if the fund doesn't do so well.

There is a note about inflation to the effect that in 25yrs time, the purchasing power of the money will be half.

Reading this letter was one of the most soberig moments of my life.

I'm obviously s**ting myself and will be cranking up my % contribution asap. I mean...WTF is 5k a year gonna do for me....I'm likely to starve to death if I have to rely on this kind of figure. This will only alleviate it slightly tho.

Got me thinking about houses as well. This is one of the main reasons why I can't take on a big mortgage. I have to be able to put a good bit of money aside to help me have some sort of existence at retirement.

Pensions & Mortgages are serious stuff in our generation. Screw what the vested interests says about 'not missing the boat etc. They don't give a crap about whether u have an impoverished retirement or not.

Anybody under 40 has nothing to worry about - they won't get a pension so there's nothing to worry about.

Think about it - as a 30 year old you are expecting money you are putting aside NOW to still be around and doing good work in 40 years time. This in a time when we don't know if we'll have a functioning economy IN TWELVE MONTHS!!!

Pensions only worked when life expectancy meant that most people didnt live that long after retirement, so the pension pot got spread around a small number of people for a small number of years.

Now you're looking at a large number of people for a large number of years the figures just don't stack up.

Pensions, in other words, were a giant Ponzi scheme.

Enjoy your life NOW - any money you put in a pension now might just as well be sent to the government and pension fund managers in a big envelope with "SPEND ME" written on it.

Re: I'm obviously s**ting myself

Why? You're 30 years old for christs sake, enjoy your wife and kids if you have them and your freedom if you don't. Why worry about what you're going to do when you're almost dead.

Cheers...

Edited by ItsColdUpHere

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The poor house. The anti pension brigade are like a broken record, reminds me of the labour one liners that they give to their mps who repeat it as a mantra yet have no understanding of what they are saying.

The pro pension brigade are like a broken record, reminds me of the labour one liners that they give to their mps who repeat it as a mantra yet have no understanding of what they are saying.

When life expectancy was 70 and you worked from 16 to 65 you basically had to save about 7% of your pay for a decent retirement.

With life expectancy of 80 and most people who save for pensions working from 21 to 65 you need to save about 25% of your pay for a decent retirement. Obviously most people can't do this. And even if you can, why? Why live like a pauper your whole life and have your kids do without just so that you MIGHT get a decent retirement - if the economy, death, divorce, ill health or the government don't steal it from you.

The pro pension brigade also look back in their rear view mirrors at how good it WAS to have a pension, without taking into account the extreme changes in demographics coming down the line.

If you choose to gamble your money on the future thats fine, its your money, but don't put down people who have looked at the same facts (if you've bothered to do that) and came to the conclusion that we're fukced in the long run so you might as well enjoy life while you can. Don't get into debt but don't worry to much about the future either.

Edited by ItsColdUpHere

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Fair point....what's the alternative?

Hi Spring,

No easy to answers to this. Firstly I wouldn't panic just yet. You are only 30 which is still pretty young. I m a couple of years away from 30, and I wouldn't like to think that I ll be worried about my pension in two years. I don't have any company pension plans with any company so maybe I should be panicking, but not really as I why worry that far ahead when all you have is today. Anyway, making a plan for 30 years, a static plan doesnt make sense in a world which is in constant flux. You need to adapt to changing conditions in all aspects of life and pensions are no different. It is perhaps worth diversifying, and when I say that I mean check out some other pension schemes. My father for instance has 3 different pensions for when he retires, along with some stocks, some property outside the UK and in the UK, which is owned outright. One of his pensions is doing very well, and one is doing ok, and I m not sure about the other. I guess he is coming up on sixty, and started his pension man years ago when conditions were more favourable...so perhaps it is not as easy now to achieve what our mothers and fathers had with their pensions.

For me, I ll be my own pension plan as I don't trust a company to run one for me. However, this not for everyone.

Have you considered a SIPP as diversity? I like Hargreaves Lansdowne, although I have some interests with them, I dont have a SIPP... SIPP Hargreaves and Lansdowne

They are a good company, and are one of the companies that have benefitted from the crisis in the banking sector, as they were sensible and took a down to earth approach. They are very approachable.

The biggest gripe I m sure most people have with a pension, and my father has is this...You get taxed on your salary that goes into the pension, and then the pension my father has taken early gets taxed each month. So Labour tax you twice on the money you earned.

Anyway, good luck...No one will really have any answers as it is very subjective, only suggestions. Everyone will have different aspirations and circumstances.

I m not going to tell you what to put pension money in, as I could be completely wrong, but keep your eyes open for opportunities, perhaps in a few years the dividend yields on stocks in the US and UK could be up around 6-10% which going back to 1870 has always marked the bottom in stocks. If you are young and 30, you can afford to be alittle more aggressive in your allocation...As an example, buying stocks in 1921, 1932, 1949 or 1982 were fantastic opportunities. That chance will be there in a few years again. As a young person, I think it is ok to put some of your eggs in this basket. When stocks bottom out, you can get a very dividend income, as the stock prices are so low.

Right now today, Lufthansa 7.83%

I m not recommeding to buy this stock, just pointing out that in afew years when the real bottom comes in for stocks, there will be high dividends on lots of stocks with the added bonus that the stock should appreciate in capital value. Then again, it is better to wait and see, who knows where government actions are leading us.

Also in Asia today there many stocks paying north of 10%. Just something worth considering as you are young and have time, and can be more aggressive with some of your money.

Edited by VedantaTrader

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Is that 10k/3k based on what you've currently contributed - or on future projected growth and contributions?

Overall, it's good to think ahead to your pension - at 30 - most people aren't thinking that at all.

If you are paying towards retirement - that probably means you are living within your means, unlike most 30 year olds I fear.

Good luck

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Check out the life tables at the Government Actuary's Department.

Based on latest figures in England,

10% of men die before 60

25% of men die before 70

50% of men die before 80

85% of men die before 90

99% of men die before 100

The figures for Northern Ireland are slightly worse.

Although life expectancy is assumed to be increasing over the next 50 years, I wouldn't expect a great deal of difference as we're at the upper limit of life extension at the moment.

You have a 50 % chance of making it to 80 and the state retirement age has already been raised to 68 for your age group.

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I got a statement like yours from some crowd in London saying that they might get me a 4% return. Also that the fees would be going up since they needed to go out for lunch more.

ehh... no thanks. Please give me all my money back.

I started a Hargreaves Lansdowne SIPP in March. Spread across only 7 shares the profit as of today is 109% - I think March was a good time to get in.

I'm not saying I am a genius but I thought that I could *at least* make 4% return. If I lost it all then I only have myself to blame - better than having some shower in London loose it then send you a letter about it.

Only problem with a SIPP is that you cannae get the money out.

My plan is to build up a sizeable amount then use my SIPP to buy a commercial property. I think you can only borrow 50% of the SIPP value to fund purchases. Hopefully prices keep falling as I put money away I might get there.

With any investment you must be prepared to loose the lot - so don't go mental!!

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I got a statement like yours from some crowd in London saying that they might get me a 4% return. Also that the fees would be going up since they needed to go out for lunch more.

ehh... no thanks. Please give me all my money back.

I started a Hargreaves Lansdowne SIPP in March. Spread across only 7 shares the profit as of today is 109% - I think March was a good time to get in.

I'm not saying I am a genius but I thought that I could *at least* make 4% return. If I lost it all then I only have myself to blame - better than having some shower in London loose it then send you a letter about it.

Only problem with a SIPP is that you cannae get the money out.

My plan is to build up a sizeable amount then use my SIPP to buy a commercial property. I think you can only borrow 50% of the SIPP value to fund purchases. Hopefully prices keep falling as I put money away I might get there.

With any investment you must be prepared to loose the lot - so don't go mental!!

Well done thus far, so how have you found Hargreaves Lansdowne? They seem to be a good bunch.

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Well done thus far, so how have you found Hargreaves Lansdowne? They seem to be a good bunch.

I've bought a few shares through H&L , very easy to use.

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I've bought a few shares through H&L , very easy to use.

Yes VT H-L are very good.Gives you the choice when and what to invest in.Easy to use and totally flexible.Very easy to transfer other pensions into (i have done so twice) and tbh i doubt you can get better.Everyone needs to wake up to this one and the sooner the better for their own sake.

Have to agree also that the next few years will see great opp`s for bottom fishing certain stocks.My pension is worth peanuts today but i believe that over time i can do something about that.Here`s hoping anyway!More people will become proactive in this area as they realise that trad schemes and state pension is no guarantee of any decent retirement.

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Well done thus far, so how have you found Hargreaves Lansdowne? They seem to be a good bunch.

Fine so far - have not spoken with them - everything done online.

Shares are mostly in mines and technology. My main share trading is through HSBC - both have advantages and fees broadly similar.

My target is to do better than the managers in London each year, without spending too much time on it.

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See this 'SIPP Hargreaves and Lansdowne' business - are there websites out there that do the exact same thing but allow you to take out the money whenever?

Ps. I do realise this may be a stupid question...?

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See this 'SIPP Hargreaves and Lansdowne' business - are there websites out there that do the exact same thing but allow you to take out the money whenever?

Ps. I do realise this may be a stupid question...?

DD-if you mean a pension ie SIPP (self inv personal pension) or any kind of pension then answer is no.You are bound by UK pension legislation and can only realise 25% of fund in cash when you are 55 (i think that is age).H-L offer a very good SIPP but same rules apply.That imho is THE big drawback with any UK pension ie that they limit what you can actually cash out with the rest being used to buy an annuity.

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The biggest gripe I m sure most people have with a pension, and my father has is this...You get taxed on your salary that goes into the pension, and then the pension my father has taken early gets taxed each month. So Labour tax you twice on the money you earned.

Surely not. Pension contributions are either taken from salary before tax is paid or the tax is rebated into the plan. In essence this means that your contribution is boosted by 22% if you are a basic rate taxpayer or 40% for higher rate earners. As you correctly point out, however, the downside is that the income from the pension is taxed when you retire.

For some an alternative is to forgo the tax saving on the contributions but get a tax free income at the end - by investing in ISA's.

You pay your money you make your choice - perhaps a combination of both might be a useful strategy?

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Surely not. Pension contributions are either taken from salary before tax is paid or the tax is rebated into the plan. In essence this means that your contribution is boosted by 22% if you are a basic rate taxpayer or 40% for higher rate earners. As you correctly point out, however, the downside is that the income from the pension is taxed when you retire.

For some an alternative is to forgo the tax saving on the contributions but get a tax free income at the end - by investing in ISA's.

You pay your money you make your choice - perhaps a combination of both might be a useful strategy?

Quite right, I don't pay a pension, but checked this with my father, I have taken him up wrong. Caveat Number 1..don't take your pension advice from me :lol:

Edited by VedantaTrader

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I'm 30 & got a pension statement in recently. In the projected income, it says that I can expect to get 10k a year at retirement (if the fund does well) & 3k a year if the fund doesn't do so well.

There is a note about inflation to the effect that in 25yrs time, the purchasing power of the money will be half.

Reading this letter was one of the most soberig moments of my life.

I'm obviously s**ting myself and will be cranking up my % contribution asap. I mean...WTF is 5k a year gonna do for me....I'm likely to starve to death if I have to rely on this kind of figure. This will only alleviate it slightly tho.

Got me thinking about houses as well. This is one of the main reasons why I can't take on a big mortgage. I have to be able to put a good bit of money aside to help me have some sort of existence at retirement.

Pensions & Mortgages are serious stuff in our generation. Screw what the vested interests says about 'not missing the boat etc. They don't give a crap about whether u have an impoverished retirement or not.

Thought I would throw my 2 pennies worth into the pot.

I stopped paying into a private pension quite a few years ago. To many older people I know came to retirement age only to be disappointed with their final pension pot, they had paid a fortune into their funds over the years.

I built a house that my parent live in it at the moment, when they pop their clogs I'll either sell it or retire to it.

I'm not saying BTL is the only option but I do think, if the figures work it's as save a bet as any. Trusting a pot of money to any financial institution is in my opinion is mental.

I know people who would buy a property for BTL and top up the mortgage payments if the rent didn't cover the mortgage rather than pay into a pension, the way they see it is their paying of the mortgage and will own it in the end, then the rental income is their pension income.

Another guy I know bought a house a few years back (one he would live in when he retires) on an interest only mortgage, the rent has always covered the interest on the mortgage. His plan is to sell the larger house he lives in when he wants to retire and move into the smaller one, pay off the mortgage with equity and pocket the rest.

On the other hand it seems to be the benefits system favours those who don't have any pension/savings. If you have savings in access of 16k your entitled to very little but if you had spent all your money you get pension credits, housing allowance and rates relief.

But anyway don't get caught up in your future to much, you might just miss out on a lot of fun today, its all in front of you.

Finally don't spent to much time on forums they will only make you paranoid ;) Have a nice weekend

Edited by statinstoinker

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Normally this site is full of good posts. Better than i can post. So i just watch them and never post.

But this is one thread that is important to an awful lot of people and yet there is little in the way of good advice being suggested.

Pension planning is a really big issue and very important. To simply say that there is no point in having a pension is a pretty ignorant thing to say for the following reasons:

1) If we get old before we die we will not be able to rely on work for money in our old age.

2) We cannot rely on relatives to support us.

3) We cannot rely on the government to support us because the level of support the government gives will change for the worse in the coming years.

So what is the right answer? Balance.

I have never understood why someone with a work scheme would choose not to pay into it. Lets think this through. You pay in 1k. But it is before tax. So you pay in 780 or 600. Your company generally will match or will pay in at a higher multiple. Lets assume match for ease of example. So they put in 1k. You now have a pension pot of 2k that cost you between 780 or 600.......

Now unless you are pretty amazing at investment returns, that is already a return of 200% (+/- depending on tax rate).

A lot of company schemes will also allow you to decide the investment strategy. I have 3 work pensions (thanks to previous jobs). One is crap and is done by post. Two are good and are online. You can log in and switch where your money is invested. Yes - they are all funds run by crooks, but you decide which fund you pay into. So you can decide whether its emerging markets, us, uk, bonds, cash, japan etc.

As to how much to pay in? Well i would seriously look to pay in the maximum that would attract a company contribution.

What else is there?

AVC's / Personal Pensions. I pay tax at 40% - therefore i pay more in because i am in profit immediately.

What about Property? Well i have a house. I have a small mortgage but when i bought the house i decided to pay off mortgage asap. Will i sell it - only to move. It is an asset. Will i buy another house to rent. Not at todays level. They are 40% over priced. If 40%over priced - why not sell? Because i live in it and it is an asset that is part of a balanced basket of wealth. It may take 15 years to reduce 40% and it could be in nominal terms. Why 40%? Because where i live the annual rental yield on a house is still 5% of the houses value. ie house is 20 times yield. This has to fall to 12 or under. It is a matter of time. And as yields are more likely to fall than rise, then expect 40% to be conservative.

So what else is there for a pension? Gold and Silver. Not in accounts or options but coins. But 1 or 2 when you can. Put them in a safe place and forget about them. They are not an investment for cashing in to spend. They are there in case you get old and cannot buy food. Gold and silver will buy you food. If all else fails this will always be the case. Isnt it a waste? Putting gold and silver in a safe place? No. People who say it is a waste are people who have not learnt what life is about. Once you have wife and kids all that matters is making sure that they always have what they need. I am not talking about buying trainers or crap - but more about making sure that if i was to die tomorrow and armagedden happened, then my kids would be able to eat. This is done by the gold and silver that you leave them.

Now back to the pension part of it. Do not be a buy and hold person in shares. It will not work over the next 5 or 6 years. Put the money into equities. Once you have profit on it, remove it and put it into short term cash. But new money goes into equities. Once you have some profit in it - again add it to cash. You do not need to make big profits, but you need to make a profit. Do this and you will do well. If the market tanks - you have cash to pile in....... But save the buy and hold in equities until the long term trend is upwards rather than down.

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New pension shock: Millions will see retirement dreams shattered

MILLIONS will be condemned to work on into their 80s because they are not saving enough for their retirement. Dreams of easing themselves into old age by cutting their hours and topping up pay packets with their pension are a “mirage,” former pensions minister Sir Steve Webb warned last night.

He said about four million people have been wooed into a false sense of security because they have been automatically enrolled into their employers’ pension scheme and save only the minimum eight per cent set by the Government.

But for every extra one per cent added to their pension savings, people will have to work one year less to achieve a decent standard of living in old age.

Sir Steve, now with insurance giant Royal London, said: “A flexible retirement, where we can gradually reduce our hours and stop work at an acceptable age, is likely to be a mirage for millions of people based on current levels of saving. Express

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