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Pensions Blowback

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Brown has created the mess with pensions, it has been obvious for years that his theft of £B's a year was going to have serious consequences.

http://news.independent.co.uk/business/new...ticle329492.ece

Nestlé's KitKat threat: 1,600 UK jobs at stake in pensions levy row

Safety net will need £700m from business, and PPF calculations are leading to battles over soaring bills

The row is understood to threaten up to 1,600 jobs in York, where Nestlé makes confectionery. The company has been told by the PPF that the "risk-based" levy it would have to pay could be as much as £12m a year. Nestlé had been expecting to pay only about £300,000.

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Guest magnoliawalls

Brown has created the mess with pensions, it has been obvious for years that his theft of £B's a year was going to have serious consequences.

Could this add upward pressure to house prices?

A few months ago I moved to another rented flat - having been messed around by the two previous agencies I had rented through I was determined to deal directly with a private landlord and viewed several places. Each of the potential landlords were of the baby boomer generation; on being asked if they were likely to sell in the next few years two of them said: 'I see this as my pension'.

Many people will prefer to 'invest' in property which is tangible rather than a pension fund that they have little control over.

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IMHO the whole problem here is the financial soup in which no-one is accountable and governments allow themselves to make no provision for future liabilities. If you know that you have liabilities, ring-fence the provision against it.

That is why the Australian system of superannuation is so great (NOW! but I won't bore) and works so well. Nobody could touch the money once it was in the pot until the liability was released.

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Could this add upward pressure to house prices?

A few months ago I moved to another rented flat - having been messed around by the two previous agencies I had rented through I was determined to deal directly with a private landlord and viewed several places. Each of the potential landlords were of the baby boomer generation; on being asked if they were likely to sell in the next few years two of them said: 'I see this as my pension'.

Many people will prefer to 'invest' in property which is tangible rather than a pension fund that they have little control over.

Quite right, this is something bears cannot understand. What has changed is that some of the wave of money that went into pensions has been redirected into property and there is no going back. It has created as one bear recently commented a new 'baseline' in the valuation of housing in this country.

Even if house prices go down a bit so what, these boomers are looking long term so do not care that much especially when they have seen pension portfolio values wobble greatly over the years.

Lets look at it this way, people ended up seeing tons of their cash go into pensions & AVC's often only to see very little return and in some cases losing the lot ! You really think subsidising a BTL couple of hundred quid per month on a BTL is a big deal to a lot of these people?? Most were putting way more each month into pensions.Some would rather roll over dead instead of signing up to pensions with Gordon Brown & Co changing their minds every five minutes on them.

Now I'm not saying this is a good thing but its easy to understand the mentality of these people given their experiences with pensions. They are after long term capital gains to offset subsidising in the early years, debatable whether that will pay off so well but its going to take an lot to shake this belief as they are just thinking of the long term.

Edited by mercsl

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mercsl,

It worked for deacdes until some twit busted it. A lot of the rout in the stock market was caused by people cashing out equities to go into fixed income and property, most f it encouraged by yes you guessed it the governemnt again.

PS people without jobs won't be able to afford one house let alone subsidze other houses, they won't be able to afford a pension either of any form, neither will they be able to pay increaing rents.

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Now I'm not saying this is a good thing but its easy to understand the mentality of these people given their experiences with pensions. They are after long term capital gains to offset subsidising in the early years, debatable whether that will pay off so well but its going to take an lot to shake this belief as they are just thinking of the long term.

Inexplicably, it is the nature of the herd to sell near the bottom and buy near the top. Few private investors bailed out of the stock market during the bull run; many seemed to wait until their investments started to slide.

I think the same will apply to residential property. The superficial arguements for investing in "bricks 'n' mortar" - tangible, people will always need somewhere to live, etc - were just as valid five or six years ago, with the added bonus of the potential for yield.

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mercsl,

It worked for deacdes until some twit busted it. A lot of the rout in the stock market was caused by people cashing out equities to go into fixed income and property, most f it encouraged by yes you guessed it the governemnt again.

PS people without jobs won't be able to afford one house let alone subsidze other houses, they won't be able to afford a pension either of any form, neither will they be able to pay increaing rents.

Things are different this time...property seen as your pension was not a big factor back in 1989. People who see it as a long term pension alternative will have a different mindset to selling up when house price movements go down a bit.

I take on board your comment about jobs and stuff, personally I would not touch anything outside of central london which will be fairly desirable both for both renting and buying long term. Location is the key to BTL.

Some investments up north may be fine but I think it helps if you know your local market. Why anyone would want to live in Bradford is beyound me so yes even I would expect a crash there! Not north bashing here, even northerners would admit some places are cack.

While yes some BTL's doing this as a pension will get it wrong long term it does not help you bears in the present does it? Most of you will have retired (still renting) by the time a lot of these dooms day scenarios get tested fully. Pension advisors always told boomers to forget the ups and downs on the stock market and think long term...no wonder they have that mentality with BTL's....

Edited by mercsl

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  • 301 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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