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Pensions.

Something I have been thinking about for serveral years, and I have come to a conclusion. But I would like to know what everyone else thinks.

Should those who have started working, or been working for a few years, get a pension? (Assuming your employer doesn't contribute).

I know people should save for the future (obviously), so i'm not asking 'if' people should save or not. I'm asking if a pension should be taken out.

Discuss...

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Pensions.

Something I have been thinking about for serveral years, and I have come to a conclusion. But I would like to know what everyone else thinks.

Should those who have started working, or been working for a few years, get a pension? (Assuming your employer doesn't contribute).

I know people should save for the future (obviously), so i'm not asking 'if' people should save or not. I'm asking if a pension should be taken out.

Discuss...

The current ethos of this government is simply this; the less you do for yourself and the less you have the more you will get thanks to means testing, so if you're on the borderline your potential contribution is best spent on countless holidays. How's about that for an incentive to save for your future.

If you look after yourself then it's at your own risk, see Equitable Life and all the collapsed company pension schemes that enjoy no sort of protection. See Brown's annual £5 billion robbery and his brand new withholding tax on institutions that are holding cash reserves, ironically at the request of the FSA.

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Pensions.

Something I have been thinking about for serveral years, and I have come to a conclusion. But I would like to know what everyone else thinks.

Should those who have started working, or been working for a few years, get a pension? (Assuming your employer doesn't contribute).

I know people should save for the future (obviously), so i'm not asking 'if' people should save or not. I'm asking if a pension should be taken out.

Discuss...

interesting question actually... when I started my current job last year I was 29. And I got my first pension started... nothing too outrageous, I think its a salary purchase at 6%. However, with my own bearish predelictions (much increased in the last 12months) I'm a touch concerned that this money is all getting put into mutual funds that I believe moderately aggressive. Still it's a "freebie" of sorts, but it bothers me that I have no control over where the money goes... I'd much rather have it in commodities at the moment! <_<

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Worth putting in a bit if you are a higher rate tax payer - would not be too tempted otherwise (if no contributions from employer). Do not trust what will happen to pensions in the future, so would spread investments into other vehicles.

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Worth putting in a bit if you are a higher rate tax payer - would not be too tempted otherwise (if no contributions from employer). Do not trust what will happen to pensions in the future, so would spread investments into other vehicles.

Totally agree. I'm lucky enough to have my employer put money in for me, even though I don't have to.

I think you're gonna be screwed no matter what. Find alternative investments and take the risk, it couldn't get any worse.

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interesting question actually... when I started my current job last year I was 29. And I got my first pension started... nothing too outrageous, I think its a salary purchase at 6%. However, with my own bearish predelictions (much increased in the last 12months) I'm a touch concerned that this money is all getting put into mutual funds that I believe moderately aggressive. Still it's a "freebie" of sorts, but it bothers me that I have no control over where the money goes... I'd much rather have it in commodities at the moment! <_<

Thats what sipp's are for , so you can manage your own money.

DYOR of course + you've only got yourself to blame if it all goes pear shaped in 30yrs - a risk most are unwilling to take.

Litigious society imho and the blame culture, most want a scape goat and/or cant be arsed to learn about finance ( of which the basics arent hard ) . Too busy on their CC's.

All imho of course.

D

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Who cares about Brown's stupid means-testing policy if you're going to retire in twenty or even thirty years? This daft bit of policy will be ancient history by then, as will the government that made it. Get saving and look after your own interests!

As for putting money into commodities, I was looking at JPMF's Natural resources fund recently - it's done more than 250% in the last 5 years!

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To all the young people in the country:

Contribute to your own pensions. Don't let the home owners try to rob you of that as well.

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At the end of the day you have to look after yourself and cant rely on anyone else. The trouble I find with pensions is that you have to make a decision now based on todays enviroment (miselling's, doom and gloom, damn labour) which is not necessarily going to be anything like whats happening in 40 years.

I could save and work hard and then find the govn. invents a rule that take it all away, or my pension could dissapear into a puff of smoke due to a crash. Or I could p*ss it all up the wall now and live in squalor for 20 years due to my improved life expectancy after retiring.

Im 26 and when I got my first job, didnt join my pension staright away, but did after about a year. Then moved jobs a few times and have tried to put 5% in the pension p.a. Key is learning how to budget and escape the prevailing atitude of spend spend spend live today like tomorrow doesnt exist. If you can put 5% away a month and not miss it, then say 10% I think thats a good each way bet for the future.

With money purchase schemes as opposed to final defined benefit I think you cna generally transfer yours/and your company contributions to the new scheme in a new job, I could last time. Just started a new job and will have to see if I can transfer it into this one. My new compnay pays a 10% contribution and I can pay anything I like and am going to try and pay 2.5%. wtih an annual charge of 0.75%, this is quite a good scheme.

It is flexible too in that they offer 20 funds that I can weight my contributions into from bonds/gilts to emerging market funds, and can change this when I like apparently within reason. One thing that you have to be aware of is charges, as in some schemes more exotic fund options can charge 2% while the simplier charge such as a UK tracker fund will be 0.5% which over the long term can be a huge cost. For mine its 0.75% chrage for which ever fund I go for.

You get tax relief too on all contributions, but this comes back once you retire and draw an income from a pension you are taxed normally. However I think you can take 25% lump sum these days TAX free when retiring, so you do actually get some of your salary at gross and componed over 30 years! You can also I think give your other half your pension should you pop your clogs early, which if just had money in just say a house I think she/he would be liable to Cap.Gain.Tax

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Scottish Widows wrote to me last week, quarterly statement.

They showed the breakdown of my investments 25% this, 25% that etc..

They also offered me the opportunity to change the things that they invest in. So maybe you'll get the opportunity to change what your fund manager is investing in too? I've e-mailed my pension adviser on friday to clarify the rules etc...

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Who cares about Brown's stupid means-testing policy if you're going to retire in twenty or even thirty years? This daft bit of policy will be ancient history by then, as will the government that made it. Get saving and look after your own interests!

As for putting money into commodities, I was looking at JPMF's Natural resources fund recently - it's done more than 250% in the last 5 years!

I agree with this. I have 7 governments to look forward to by the time I retire. The situation now is highly unlikely to be the same by the time I retire.

Incidentally, the fact that I have 7 governments to trust is the main reason why I have continued to stay contracted out of SERPS/S2P. I simply don't trust the next 7 governments to honour SERPS/S2P when the time comes (means testing?) so I'll have my rebates now thanks.

This goes very much against the grain of current thinking as most are now advising to contract back in because the NI rebates have been cut.

However, I'm now starting to see some articles (sorry, don't have links) which are saying what I'm saying, i.e. it's basically a choice between a financial or a political risk now, especially if you're on the border between it being wise to contract in or out.

EDIT: above all IMHO and NOT advice, of course.

Edited by aclwalker

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No.

1. When I turned 30 I started a pension and put my money into the pension that ALL the financial press, gurus, etc said was the best - EQUITABLE LIFE. Enough said.

2. When I became self-employed I put my money into the pension that ALL the financial press, gurus, etc said was the best for self-employed people - STANDARD LIFE. They decided to stay in technology stocks long after the bubble had collapsed. Enough said.

3. My Mum worked all her life and has a small public sector pension. She gets about a tenner a week more than her cousin who hardly worked at all. My Mum is FAR WORSE off than her cousin because of this and the fact that she has some savings. It would have been better for my Mum if she had never worked. SCANDALOUS.

If I was in my 20s again I would work to buy a property and get a mortgage out of the way ASAP. I turn 40 next year and back in 2001 I stopped paying into a pension as, as far as I can make out, you get screwed by the pension firms, you get screwed by the Government and then you get screwed for simply having a pension at all.

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I've got 12% going into my pension and im on 30K, 8% from the company and 4% from myself. Saying that the fund grows at 5% above inflation each year, im 25 now so that 40 years growth.

i'll have an income of 21K (in todays money) plus 5K of the state, making 26K a year!!

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I've got 12% going into my pension and im on 30K, 8% from the company and 4% from myself. Saying that the fund grows at 5% above inflation each year, im 25 now so that 40 years growth.

i'll have an income of 21K (in todays money) plus 5K of the state, making 26K a year!!

5% above inflation! Don't make me laugh. The tosspots that run pension funds are lucky to keep pace with inflation. They are utterly useless.

Obviously an 8% contribution from your employer is not to be sneezed at - but you will need something else as well. Or, of course, you can just trust to the governments.

I echo the comments someone else made. My father worked hard all his life etc etc and ended up a few quid a week better off than the neighbours that had been on the dole all their life.

What's the point?

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Who cares about Brown's stupid means-testing policy if you're going to retire in twenty or even thirty years? This daft bit of policy will be ancient history by then, as will the government that made it. Get saving and look after your own interests!

Well indeed, I doubt there will actually be a state pension for the iPod generation, you may get a cake if you make it to 90 and turn up for work on that morning.

However, my point still stands, in order to fund your future retirement people need to be saving now, what incentive does Brown's means testing give the current generation now? They may believe the magic money tree that funds the state will still be in existence when they retire, and the message is clear from Mr Brown, the less provision you make for yourself the better as far as help from the state is concerned. Brown has created this fallacy for himself, whilst robbing the pension funds of £5b a year and the markets suffering a major collapse in 2000 taking many private providers down with it. The environment that has been created is little different from going down the local casino then having the mafioso knock you on the head.

Even if you're retiring in 2030 the current system is disincentive for people, it sends the wrong signals now, just when they should be doing something for themselves. If they introduced an 'you're own your own' system tomorrow it would make all those in the 20's and 30's actually think!

Edited by BuyingBear

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...I echo the comments someone else made. My father worked hard all his life etc etc and ended up a few quid a week better off than the neighbours that had been on the dole all their life.

What's the point?

The point is I have a great deal more respect for your father, than I ever could for his neighbours.

I know that doesn't pay the bills, but come on, self-*******-respect.

NDL

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I've got 12% going into my pension and im on 30K, 8% from the company and 4% from myself. Saying that the fund grows at 5% above inflation each year, im 25 now so that 40 years growth.

i'll have an income of 21K (in todays money) plus 5K of the state, making 26K a year!!

I suppose the company is effectively giving you free money (the 8%) so you might as well take it.

I'm in the same boat but I am wary of those predictions they make for you pension in 40 years time - those endowment mortgage predictions never worked out did they?

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Pensions.

Something I have been thinking about for serveral years, and I have come to a conclusion. But I would like to know what everyone else thinks.

Should those who have started working, or been working for a few years, get a pension? (Assuming your employer doesn't contribute).

I know people should save for the future (obviously), so i'm not asking 'if' people should save or not. I'm asking if a pension should be taken out.

Discuss...

No, of course not. Pensions are so last decade.

Just save up for that second property to let!

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I've got 12% going into my pension and im on 30K, 8% from the company and 4% from myself. Saying that the fund grows at 5% above inflation each year, im 25 now so that 40 years growth.

i'll have an income of 21K (in todays money) plus 5K of the state, making 26K a year!!

Yep I have the same. I pay 4% of my salary in and the company adds 8% on top. You don't work

for telecoms by any chance?

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I suppose the company is effectively giving you free money (the 8%) so you might as well take it.

I'm in the same boat but I am wary of those predictions they make for you pension in 40 years time - those endowment mortgage predictions never worked out did they?

my feelings precisely. And if we are about to go into a Kondratieff winter then it's a good job I have up to 40yrs left to retirement!

Or there's always Plan "A" - make my fortune in the interim. :D

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Just got a letter from the DWP saying my contributions for last year weren't enough to count towards the state pension, would I like to send them some more money? I did stop to think about this, but if the retirement age stays as it is I've got nearly a quarter of a century to go (don't want to be TOO precise!). If I give them money now it goes to the present generation of retirees, who are already the best-off there has ever been (on average, sure, but the fact remains). It's pretty clear it won't be anything like this in 25 years time. Today's Observer has a piece by Alan Johnson saying public sector pension age will go up to 65 because of demographics, and the Economist has a long article about Delphi's bankruptcy, about the way that "legacy costs" are making older first-world firms uncompetitive. (I have a tiny pension from BAe, fat lot of good that's ever likely to do me.)

It's all becoming game theory - do you feel lucky? If I had any money I'd be tempted just to stick the whole lot in the highest interest account I could find and review it every couple of years. With demographics as they are I can't see how property is going to pay off. 5-15 years from now will see unprecedented numbers of boomers retiring coupled with expensive oil - how are we supposed to plan rationally with this one looming? What if a significant number of them want to cash in their btls and/or downsize their main house?

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I've invested in PEP's and ISA's instead of pension. While this has had its ups and downs (still not worth what I put in thanks to the 2000 stock crash) at least I can get my hands on it if I want to.

As I paid tax one the money that went in, I won't pay tax when I take it out... (pension is just the other way around you pay no tax going in, but get taxed when it comes out).

I may take out a SIPP, or additional ISA's, but its very important to find a provider with very low charges. There are online brokers who have decent low fees. Pension providers often have yearly charges well above ISA's and so on... so its worth doing the research.

My main argument against pension investments, apart from their recent poor performance and the charges is the lack of flexibility. In a rapidly changing world its best to be able to get your hands on the money if you want it.

There is no knowing what the tax and welfare environment will be in 20-35 years time, that is why flexibility is important. Although its possible that means testing will survive, with PEP's and so on you have the option of spending all the money whenever you want if it turns out to be not financially beneficial to have savings.

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Yep I have the same. I pay 4% of my salary in and the company adds 8% on top. You don't work

for telecoms by any chance?

I work for a oil pipeline company (Shell/BP), all the old guys (baby boomers) are on a two thirds gold plated pensions, none of that good stuff for young people today. Everyone starts on 8% raising to 15% depending how long you work for them and your age, plus the company pays admin costs.

Also its in a fund which I can control the breakdown (on-line), so if we have another SM bubble i'll make sure I'll move my money out before its pops.

I have 60% of my pot equally spead throughout the world over various asset classes which I don't play with and the other 40% which I play with, I have been aiming money at japan and germany, and moving money away from dollar assets for the best part.

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Who cares about Brown's stupid means-testing policy if you're going to retire in twenty or even thirty years? This daft bit of policy will be ancient history by then, as will the government that made it. Get saving and look after your own interests!

As for putting money into commodities, I was looking at JPMF's Natural resources fund recently - it's done more than 250% in the last 5 years!

...well spotted(I've been in that fund myself since 03),but that doesn't mean that it will continue upwards at that trajectory does it?......I'm still long on the sector.

there may be corrections.......it's a market after all just like houses,shares etc.

my personal view is that long term,commies are a good bet(I harp on about the 1975-1989 cycle but there are disturbing similarities so that's how i've positioned my investments)....but don't expect it to be uphill all the way....if I see an opportunity to sell out at an overblown price and buy back in lower then I will take it!

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I'm 25 and I have not put a penny into pensions. I could easily afford to, but i'd rather save it. The reasons for this are:

  1. I'm not sure how the goverment will tax the money I have saved in 40 years time. I know how they tax my salary now (they take 32% of it)
  2. If I get a mortgage in the future I can pay it off quicker. Whats the point in borrowing money on one hand and investing it with the other?
  3. I don't trust pension companies
  4. I don't want to pay comission for my pension (i.e. the 0.5% a year or whatever)
  5. It is futile. The only way I see of being comfortable when I retire is to be rich. The only legal way to have a decent chance of being rich is to start a business. I see that as my plan for retirement. Not a pension.

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  • 301 Brexit, House prices and Summer 2020

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      • down 5% +
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      • Even
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      • up 5%



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