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I pretty much agree with what has been said on this thread. I could afford a pension, but I trust them or the Government.

What I find worse is the Government changes things for political gain, such as the SIPPS changes. Why didn't they wait for the Pension Commission Report and its policy recommendations due out soon?

I will however continue to save.

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Well, I have a public sector pension being a teacher, but it won't exactly let me live a life of luxury (despite what the tabloids will have you believe). May be just about okay as long as I can pay off any mortgage I might have by the time I retire. But I'm starting a stakeholder plan soon for my 20 month old boy. i'll go for the minimum contribution of £20 per month but even this means he shouldn't have to put in about 15 per cent of his salary to get a breadline pot once he starts working - it should have grown decently, barring another Equitable Life. After paying out for all the retirees he'll be supporting once he's of age, I'd be surprised if he had two pence to rub together after tax...

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Well, I have a public sector pension being a teacher, but it won't exactly let me live a life of luxury (despite what the tabloids will have you believe).

At least you have the assurance that the provider (HM Government) will still be there in 30 years time, and they will always pay their bills, be it via tax rises or the issuance of gilts, your outcome is guaranteed so there's no worrying about stock market peformance. I would say you're quite lucky, even if they do raise the retirement age to that of the state pension :)

If you're in a private scheme there is a constant worry about collapse of the company or the provider, a stock market crash, debt and bond defaults, or the HM Treasury dipping in with stealth taxes whenever it deems necessary and without warning, a factor increasingly likely if they intend to find a way to pay for the unfunded public pension schemes.

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If you're in a private scheme there is a constant worry about collapse of the company or the provider, a stock market crash, debt and bond defaults, or the HM Treasury dipping in with stealth taxes whenever it deems necessary and without warning, a factor increasingly likely if they intend to find a way to pay for the unfunded public pension schemes.

My company contributes 100% of what I put in on a private stakeholder pension scheme. I still have not joined it because of;

1. It's related to stockmarket... in a 40 years timescale until I retire it only takes one crash to f.. it all up. At least if I invest/save my money I can take them away when I need them, even if this means loosing the company's contribution.

2. Don't trust insurance companies. Katrina, in the states, got most of them into serious trouble and it had an effect worldwide. Should I invest my money into an institution that could be wiped off by a couple of Katrina's??

However, because of the theory of not puting everything into one basket I was thinking of contributing a small amount £50 per month (i.e. 100plus, accounting for company's money and tax relief).... but then again, in the current climate it appears that people who did not save anything at all and rely only on state pension are better off than people who saved a tiny little bit.

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it only takes one crash to f.. it all up.

A common misconception. The more crashed the better, but gradually transfer to safer / cash funds as you approach retirment.

A PENSION IS THE LAST THING ONE SHOULD INVEST IN, HERE'S WHY;

INFLEXIBLITY - you are not in control and you cant take the money before certain age. If your terminally ill (at 45 say) you cant touch the fruits of your labour!

If you die, chances are the provider keeps all or most of your pot!!!!!! This has just happened to a freinds Dad. He died at 65 with a fund of hundreds of thousands in the Prudential (literally weeks away from retirment). The Pru kept the lot.

Apart from property and my business I use several Unit Trusts. I love the fact I can transfer funds, dip - in when I want, and can leave all of it to my family.

Edited by dogbox

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A PENSION IS THE LAST THING ONE SHOULD INVEST IN, HERE'S WHY;

INFLEXIBLITY - you are not in control and you cant take the money before certain age. If your terminally ill (at 45 say) you cant touch the fruits of your labour!

If you die, chances are the provider keeps all or most of your pot!!!!!! This has just happened to a freinds Dad. He died at 65 with a fund of hundreds of thousands in the Prudential (literally weeks away from retirment). The provider keeps the lot.

Apart from property and my business I use several Unit Trusts. I love the fact I can transfer funds, dip - in when I want, and can leave all of it to my family.

hes right.

why hand over your pot to some city type to mess with. half the time they bodge it. if you die they chop it up. no your better in bonds or gold or ISAs. this way you control everything and you know where your money is. maybe get some life insurance instead for partner worries ect.

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INFLEXIBLITY - you are not in control and you cant take the money before certain age. If your terminally ill (at 45 say) you cant touch the fruits of your labour!

Indeed: I only pay enough into the pension to get the maximum employer's contribution, that's more important than the tax benefits.

Otherwise, though, I agree: the future is looking increasingly unstable, and the last thing I want to do is lock up my savings for thirty years or more with a group of people whose investment acumen is hardly impressive, and where it could be looted by future governments at any time. I'm not expecting to see a penny from my pension after successive governments have trashed the economy, so if I get any decent amount in the end it will be a bonus.

Edited by MarkG

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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?

This subject freaks me out - I have no pension provision at all. My mum and dad both had equitable pensions, dad's was with profits, mum's wasn't, so between them it kind of evened out, but I have no idea how to go about getting a pension. I went to see Standard Life with a 1500 squid starter pot 5 years ago but didn't go ahead with it - I don't know how much of that I'd have left at this stage but probably not much! Does anyone out there have a good book recommendation on how to use sipps - or indeed how to invest as a substitute for an official pension scheme - strikes me that by the time you've paid the fees and the fact, as Marina says, that fund managers on average do no better than amateur investors, you might even be able to make up the tax relief (if you count the tax at the other end - could get complicated). Anyway, anxiety increasing, any recommendations bookwise? :o

OK, right fred's dead, got that ISAs, bonds and gold. Have ISAs and some bonds (do premium bonds count? they seem like joke bonds, but that's what I've got). Gold - there's a lot of talk on here about that and I must find out more about it. Again, any good book recommendations for bonds or gold? Based on my 'if in doubt, buy a book' approach, which might not be best. Website etc. references gratefully received, too. Thanks.

Edited by North London Rent Girl

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At least you have the assurance that the provider (HM Government) will still be there in 30 years time, and they will always pay their bills, be it via tax rises or the issuance of gilts, your outcome is guaranteed so there's no worrying about stock market peformance. I would say you're quite lucky, even if they do raise the retirement age to that of the state pension :)

If you're in a private scheme there is a constant worry about collapse of the company or the provider, a stock market crash, debt and bond defaults, or the HM Treasury dipping in with stealth taxes whenever it deems necessary and without warning, a factor increasingly likely if they intend to find a way to pay for the unfunded public pension schemes.

It's true - but then again I only became a teacher at 30 so I have a private fund from before this. Only paid in because my employer put a bit in, too. The wife also has a private stakeholder plan so we're fairly well exposed to the stock market... Not sure I could cope with working till 65 - have to physically restrain kids on a regular basis, not to mention standing up all day and bending down over kiddie sized tables. it's okay if you're a pen pusher in the Civil Service - teaching gym to a bunch of 8 year olds is another matter entirely.

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how to invest as a substitute for an official pension scheme -

Maybe this will help;

A pension is an inflexible expensive 'wrapper'. Within that wrapper are investments. It is common for pension schemes to 'farm - out' the investing bit to Unit Trust and other specialist investment managers.

I cut - out the pension wrapper bit and invest directly in the Unit Trusts.

For the last 15 years I have had a keen interest in this. In those 15 years all sorts of pundits and advisors recommend 'x' fund, but in the end its 'pin the tail on the Donkey' time. In other words, dont get too clever trying to pick an investment fund and never ever rely on an advisor to pick a fund from the thousands available. Simply spread your monthly contributions amongst 2 or 3+ providers.

Id include a general low cost tracker (eg Fidelity have the lowest charging tracker, and as it simply tracks its low charges you want).

Id then invest some in another fund manager and pick 2 of thier individual funds to invest in (for example Russia and health, or the far east plus eastern europe). Another option is VCTs (venture capital trusts) which provide money for new business.

The beauty of Unit Trusts is that you can for example, transfer more of your 'pot' inot the providers cash fund near to retirement for safety. Also its totally flexible as you are in control of when you access your money and your beneficiaries get ALL the stash when you die (unlike a pension).

Avoid Banks and Insurers, they are not real investors. I personally also dislike Investment TRUSTS, as they leveredge thier positions with borrowing - too risky to give my hard earned cash to spiffs with a taste for debt.

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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.

And then (presumably), you screw yourself as you have no personal provision for your old age. Forget property for a pension - it won't happen. Unit trusts are fine, but without ISA's you're going to foot an insane CGT bill when you liquidate, so be careful. And again, pensions may be inflexible, but what other investment can give you up to an instant 40% profit?

1. It's related to stockmarket... in a 40 years timescale until I retire it only takes one crash to f.. it all up. At least if I invest/save my money I can take them away when I need them, even if this means loosing the company's contribution.

What were you planning on doing, investing in cash? If you want to get any kind of real return on capital over time, you have to invest in some real assets, which mostly means stocks, period. Unit trusts, ISAs, pensions, investment bonds, the lot, all have some equity component. If you refuse to invest in shares to some extent, a retirement full of cold baked beans and daytime TV beckons.....

Edited by Time to raise petrol prices

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My pensions strategy is not really that well thought out. I pay in £100 per month to a Virgin Money stakeholder. My reasoning was that I can get 40% tax relief straight away, so the fund would really have to collapse to be worth less than what I put in.

I always thought that it was a no-brainer to invest at least some money in a pension, because of the 40% tax relief. That said, having read this thread, I dont know whether to increase or decrease my provisions!

I am 27 years old, earn £40k, have only a couple of grand of debt (this will be paid off by the end of the year). I have no savings as I have been paying off student debt for my entire working life (only 2 years as I done some travelling and further study after uni). My employer doesnt contribute to a pension scheme until im 30, at which point I get 6% from them.

I also have £3k in a fixed benefits pension scheme from my previous job, apparently the transfer value is something like £850.

Does anyone have any advice for me? Should I transfer the fixed benefits one into the stakeholder so its all in the same pot? Would it be better for me to transfer the stakeholder to a SIPP? I would feel comfortable doing my own investing- In fact it would probably be quite good fun :)

Edited by kempstar

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I would rather control my own money than have a suit making decisions on my behalf - Pensions industry has shown itself to be incompetant.

Pensions are, IMO, the biggest bomb shell waiting to explode in this country.

I mean, forget the house prices. When the governments of the future, whatever political persuation, finally let the public know that the country cannot afford the pensions, it will hit the fan huge time!

Already the public sector unions are getting hot under the collar - we aint seen nothing yet. Just wait until they have to tell, teachers, nurses, firefighters, Police etc that they cannot have what they were promised because the private sector cannot fund it - It will be very very interesting.

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Just imagine if Gordon had taken a different decision in 1997 and raised cash from a capital gains tax on houses, rather than raiding pensions. Then we might not have a pension crisis or a housing crisis!

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My company contributes 100% of what I put in on a private stakeholder pension scheme. I still have not joined it because of;

1. It's related to stockmarket... in a 40 years timescale until I retire it only takes one crash to f.. it all up. At least if I invest/save my money I can take them away when I need them, even if this means loosing the company's contribution.

2. Don't trust insurance companies. Katrina, in the states, got most of them into serious trouble and it had an effect worldwide. Should I invest my money into an institution that could be wiped off by a couple of Katrina's??

Your company contributes regardless of your own contributions but you have still not joined? Your company is offering free money. You may not see it until you are 60+, but this is free money you are refusing! Its like turning down a pay rise!

As for Katrina, what has that got to do with it? Without discussing the finer points of the UK savings market, I can assure you that you are very mistaken.

I agree that pensions are inflexible and lock away your cash but that is the whole point. Thats why the government provides such attractive tax incentives.

For a top rate tax payer maximising contributions is a no brainer. Your contribution gets 40% tax relief (and 17% of this comes back as cash via your tax return). Also, your fund rolls up tax free (or for share dividends free of upper rate tax).

I contribute the maximum I can to my pension and then complement this with other tax efficient savings like ISAs and VCTs. I also opt out of SERPS. There is no way I am going to trust the goverment to provide for me in 30+ years.

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Your company contributes regardless of your own contributions but you have still not joined? Your company is offering free money. You may not see it until you are 60+, but this is free money you are refusing! Its like turning down a pay rise!

As for Katrina, what has that got to do with it? Without discussing the finer points of the UK savings market, I can assure you that you are very mistaken.

My company matches my contributions. If I contribute £100 they put another £100 in it. If I don't contibute they don't contribute.

Katrina will generate more than 2million claims. If that's not enough for insurance companies to go bust, then it will certainly create problems with their ability to pay back claims. The private companies' ability to repay pensions in 2050 (nevermind if they will still be there) to an aging population just frightens me!

Does anyone know how protected are our money in a stakeholder pension, if the insurance company goes bust? I know in a bank you can take back 100% of the first 2K and 90% up to 30K. I don't mind that much about banks, cause if I sense troubles I can just move my money away. It's the sheer scale of 40years 'til pension time and the inflexibility of access to your money that makes it a matter of concern. And even if you can somehow shift between companies while you are still paying into it (not 100% sure how easy it is), what happens when you actually get your pension (in 40 years in a galaxy far far away). I made these queries to Friends Provident a couple of months ago, but they never replied.

By the way, I am not 100% negative against pensions (only 99% lol), but there are far too many questions that have to be answered satisfactory.

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Your company contributes regardless of your own contributions but you have still not joined? Your company is offering free money. You may not see it until you are 60+, but this is free money you are refusing! Its like turning down a pay rise!

As for Katrina, what has that got to do with it? Without discussing the finer points of the UK savings market, I can assure you that you are very mistaken.

I agree that pensions are inflexible and lock away your cash but that is the whole point. Thats why the government provides such attractive tax incentives.

For a top rate tax payer maximising contributions is a no brainer. Your contribution gets 40% tax relief (and 17% of this comes back as cash via your tax return). Also, your fund rolls up tax free (or for share dividends free of upper rate tax).

I contribute the maximum I can to my pension and then complement this with other tax efficient savings like ISAs and VCTs. I also opt out of SERPS. There is no way I am going to trust the goverment to provide for me in 30+ years.

I agree if they are contributing regardless - might as well be in it.

'Company schemes - best possible!' just what a financial advisor said to me. Unfortunately, I wont be working for one company for 30+ years therefore I will need to move my pension around as the industry is not flexible without huge admin transfer costs.

Several companies. Several frozen pensions = f all.

Tax breaks are NOT what its all about.

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My pensions strategy is not really that well thought out. I pay in £100 per month to a Virgin Money stakeholder. My reasoning was that I can get 40% tax relief straight away, so the fund would really have to collapse to be worth less than what I put in.

I always thought that it was a no-brainer to invest at least some money in a pension, because of the 40% tax relief. That said, having read this thread, I dont know whether to increase or decrease my provisions!

I am 27 years old, earn £40k, have only a couple of grand of debt (this will be paid off by the end of the year). I have no savings as I have been paying off student debt for my entire working life (only 2 years as I done some travelling and further study after uni). My employer doesnt contribute to a pension scheme until im 30, at which point I get 6% from them.

I also have £3k in a fixed benefits pension scheme from my previous job, apparently the transfer value is something like £850.

Does anyone have any advice for me? Should I transfer the fixed benefits one into the stakeholder so its all in the same pot? Would it be better for me to transfer the stakeholder to a SIPP? I would feel comfortable doing my own investing- In fact it would probably be quite good fun :)

The goverment will tax the annuity when you retire. Maybe they'll tax it less than 40%. Maybe they'll tax it 95%. Who knows? Its way too far in the future to tell.

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Any advice I give is irrelevant - because I am not resident in UK.

I have company "provident fund" (not a pension, a lump sum on leaving)

I also have an auto debit, going into ETF and some utilities.

If I were in the UK - yes, I would be trying to build up a pension, alongside PEPS/ISA. Its a mess, but you need to do something for the future, and the tax break is worth going for.

One thing for when you actually retire, look at a DIY annuity using I/L gilts. My father did this, and was much cheaper/ better value than purchasing annuity.

As I said on another thread - you should be aiming for a capital sum that is about 25 times your required retirement income. That should be enough to keep income in pace with inflation.

5% above inflation? Wow! I would reckon on 2-3%.

Note costs are the enemy - go for ETF and buy bonds direct from HM Treasury.

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I mean, forget the house prices. When the governments of the future, whatever political persuation, finally let the public know that the country cannot afford the pensions, it will hit the fan huge time!

Already the public sector unions are getting hot under the collar - we aint seen nothing yet. Just wait until they have to tell, teachers, nurses, firefighters, Police etc that they cannot have what they were promised because the private sector cannot fund it - It will be very very interesting.

You underline the point nicely. With so little being sure about company schemes, all the more reason to get an inexpensive stakeholder.

Katrina will generate more than 2million claims. If that's not enough for insurance companies to go bust, then it will certainly create problems with their ability to pay back claims. The private companies' ability to repay pensions in 2050 (nevermind if they will still be there) to an aging population just frightens me!

Respectfully, you are talking nonsense. A private pension pot goes to buy an annuity for YOU only, and has no relationship to how many other people are claiming, like in big public sector schemes. The fund buys fixed interest securities when you retire. Your income is very very safe. That's it. There's no question of a private pension co being unable to fund its pension liabilities (Equitable Life aside), because the only person who will be claiming on your pension fund is YOU! (from money you saved personally, for your personal benefit only - simple, see?)

Edited by Time to raise petrol prices

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I have to say to anyone who knows nothing about pensions and has read this thread, YOU STILL KNOW NOTHING ABOUT PENSIONS!

Whilst there is (quite rightly) a lot of caution on this thread surrounding pensions, there is also a hell of a lot of factual inaccuracies. There's too many to go into.

I would suggest that anyone being offered a company pension at the moment not to base their decision on what they have read on this thread.

As they say on Motley Fool DYOR!

NDL

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  • 336 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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