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7 hours ago, Mikhail Liebenstein said:

To date governments have always tried to allow access to private schemes around 10 years before the state pension.So the rise to 67 moved the private schemes to 57.

All  the literature says it is still 55 and the gov website 

https://www.pensionwise.gov.uk/en/your-pension-before-55

I think they like the idea of people accessing it early to spend in the economy and not be liable for benefits once drawn 

Seems a bit unclear looks like it will rise to 57 by 2028 but looking it up it says this will be a cliff edge so prior people could have a bigger gap - and no legislation currently 

Edited by GregBowman

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Pensions, now that most people will have to wait until they are 70 or very close to that age to receive a state pension, not knowing what itwill actually pay or what it will buy at the time......anyway who will still be working at age 70? Who is still working now full or part-time at 68?.....So how will people support the cost of living from say age 60 to 70 and onwards?.....As already mentioned £50 per month flat into a personal pension will not provide a £2k equivalent monthly income from 60 to 70...many have not been putting anything into a personal pension their whole working life until recently and are only now in their 40s and 50s........Many start working later into mid twenties so might have lost 5 to 10 years potential pension contributions shortening pension saving years......they might think other financial commitments more important at that time like paying off debt, rent and mortgage, bringing up children etc.....money into a pension can sort that out later......and later, £50 per month will have to do for now.😉

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56 minutes ago, GregBowman said:

All  the literature says it is still 55 and the gov website 

https://www.pensionwise.gov.uk/en/your-pension-before-55

I think they like the idea of people accessing it early to spend in the economy and not be liable for benefits once drawn 

Seems a bit unclear looks like it will rise to 57 by 2028 but looking it up it says this will be a cliff edge so prior people could have a bigger gap - and no legislation currently 

Well yes, I’ve just taken the age as 57 for ages as I won’t be 55 by 2028, basically this change impacts people who were 47 or under in AprIl this year. 

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8 hours ago, Orb said:

In your professional experience, are you able to guesstimate the likelihood of a positive experience come pension time from schemes such as auto-enrol workplace pensions? 

Not directly - but some pointers would be:

DC pensions are great if...
- Your employer pays significant contributions in
- You are a higher-rate taxpayer
- You don't definitely don't need the money until you're at least 58

DC pensions are not so great if...
- The level of contributions going in is so small that they could potentially be overtaken by means-tested benefits (noting that the benefit system when you retire may look very different to today)
- You don't follow a sensible investment strategy (such as taking investment risk when young, and reducing that risk as you near retirement)

Remember the risks change as well:
- The younger you are the longer time you have to invest, and that allows you take investment risk and get reward.  Whilst the stockmarket can fall 10% in a day, and 20% in a week (as we have seen in March) over a 40-50 year period, including dividends, you can make lots of money.
- However, the younger you are the more time future governments have to change the rules, and the more likely you are to impacted by the changes (since often people retired or close to retirement are excluded from changes).  I personally would place a low likelihood on a future government simply confiscating your pension.  However, they could easily do things like change the retirement age or tax treatment.  The government also considered essentially doing away with future contributions to pensions altogether, and just basically moving entirely to a kind of Workplace Lifetime ISA system, with you and your employer both chipping in.

2 hours ago, GregBowman said:

All  the literature says it is still 55 and the gov website 

...

Seems a bit unclear looks like it will rise to 57 

You're right: the minimum pension age today is 55.  The government has announced an intention to change it to 10 years below State Pension Age in the future (whatever the SPA of the moment is) but hasn't yet passed legislation to do so.

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Not that long ago was 50 now 55 might soon be 57.......some depending on the work they did could retire with pension under the age of 50......many who did take the money work now in the same employment, getting both pension and wages, some might have got a redundancy payment also.....😉

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9 hours ago, regprentice said:

 

My last pension statement gave a range of possible values for the fund to pay out at.... One third of that range is less than I pay in each month. That isn't the promise in the glossy pension brochures and it's not an incentive to save Into a pension.

Here we go. I am an investor but I’ll blame everyone else that my investments are crap.

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9 hours ago, Orb said:

 

SIPP is where I plan to explore next. I hear positive things about that route. I must add, I've only recently opted out from workplace pensions after paying in since their inception. So am in a stepping stone phase. 

W/P pension or personal pension should do the job.

only need sipp if buying property in pension.

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10 minutes ago, Killer Bunny said:

W/P pension or personal pension should do the job.

only need sipp if buying property in pension.

Some w/p pension schemes are a bit rubbish, opaque funds, high charges that kinda thing. Maybe that's getting better now I dunno.

In those cases certainly worth taking the free employer contribs at the time but if you move jobs then at that point, unless I'm missing something, you may as well transfer that pot into a better value, better managed private pension wrapper.

Mind you I think people who trade like crazy and have about twenty different funds in their sipp wrappers to be a bit strange. I suspect they're into BTL too.

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Yes the pension needs to offer a large range of investments. 

Yes, changing employer normally should have one transferring the W/P pot into one's own managed personal pension.

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11 hours ago, Orb said:

I don't trust anybody. 

I don't trust that in 26 years workplace pensions won't be means tested against the standard state pension rate, and that state pension payments will only top up workplace pensions to that rate. Remember, the government are working decades ahead as well as currently. After seeing how ordinary working people are living a daily scam and con, it wouldn't surprise me if after paying NI til my retirement AND a workplace pension, come retirement I will see only the worth of a state pension. 

I don't trust employers. I know 2 people who saw deductions in their weekly pay packets for pension contributions, and when their company folded they realised there was no pension. The company were simply underpaying them. Ok, it was partly the employees' fault for not verifying the authenticity of their pension company, but for all I know false and convincing paperwork may have been sent to the employees. 

I don't trust my money going into speculative markets, nor managers of investment companies. They always seem to come away unscathed. I've read numerous accounts of these people, often prominent ones too, circumventing regulations and finding technical loopholes to trade in very risky assets. I can do without that. 

With me it's not necessarily financial illiteracy, it's a trust issue. 

 

Well fear not, whatever happens, you will be very poor as a pensioner and entirely at the mercy of whatever government is in power.

So you do have absolute trust in  government after all.

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32 minutes ago, Killer Bunny said:

Here we go. I am an investor but I’ll blame everyone else that my investments are crap.

Im not an investor at all. The vast majority of people aren't. My employers pension fund is tasked with making sensible decisions on my behalf. 

I'm always a bit confused by pensions vs house price discussions on forums. 

People here will refuse to invest in a £500k new build house because they can see it for the edifice it is. Something overvalued and due a crash, where the sensible 'market fundamentals' dont apply. 

I feel exactly the same way about most investment discussions, values assigned in the stockmarket don't reflect companies values and pivot wildly on rumors and fear, golds overvalued, ,bitcoin simply doesn't make sense, gilts depend on believing governments are even vaguely competent. 

When I look up and down the investment choices list for my pension most of the options I'm presented with make just as much sense as arguing house prices can only ever go up. 

To me someone who doesn't believe in house prices, but believes in the stock market makes sense in its current form as an investment is taking a two positions at once which are diametrically opposed. 

Edited by regprentice

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Fees can be very high....a fee to invest, an annual fee for so called management and a fee to change or exit.....why not just go for a tax efficient tracker, low cost no management required.....the market manages itself doesn't it.?😉

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15 hours ago, spacedin said:

For one, you can draw you pension wherever you go, unlike pension credit which is residency based. Plus you won't lose this income if you decide to do a little work on the side. 
 

Thanks spacedin, I hadn't considered those aspects.  

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51 minutes ago, Killer Bunny said:

W/P pension or personal pension should do the job.

only need sipp if buying property in pension.

Partial Transfer into a sipp annually. Often nets you a bonus for doing so, lowers the fees and you can access the 800 lb gorilla that is vanguard funds a lot easier..most WP schemes don't have those I've found.

 

1 hour ago, scottbeard said:

Not directly - but some pointers would be:

DC pensions are great if...
- Your employer pays significant contributions in
- You are a higher-rate taxpayer
- You don't definitely don't need the money until you're at least 58

 

With salary sacrifice, DC pensions can be are awesome if you're a lower rate tax payer too - especially because *current* benefit eligibility takes your P60 figure to calculate entitlement. 27p from net salary to get £1.138 into pension? Thank you very much. Crazy not to do so. Actively keep housing artificially inflated, but allow us to do this? Then do it.

21 minutes ago, regprentice said:

I feel exactly the same way about most investment discussions, values assigned in the stockmarket don't reflect companies values and pivot wildly on rumors and fear, golds overvalued, ,bitcoin simply doesn't make sense, gilts depend on believing governments are even vaguely competent. 

When I look up and down the investment choices list for my pension most of the options I'm presented with make just as much sense as arguing house prices can only ever go up. 

 

Sigh. A good pension scheme is a liquid as running water. You can choose to hold cash, gold, bitcoin (it does make sense), real estate, funds that rebalance themselves, direct equities. Whatever you want, whenever you want. Try selling an actual house on a whim.

Edited by Frugal Git

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27 minutes ago, regprentice said:

When I look up and down the investment choices list for my pension most of the options I'm presented with make just as much sense as arguing house prices can only ever go up. 

 

A large part of the investment industry is just there to confuse and extract fees from you.

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1 hour ago, scottbeard said:

You're right: the minimum pension age today is 55.  The government has announced an intention to change it to 10 years below State Pension Age in the future (whatever the SPA of the moment is) but hasn't yet passed legislation to do so.

This is strictly not true. The minimum pension age is only 55 if funds are held in an IR approved fund and have followed IR rules. In common sense terms you can retire whever you have enough money and that could be 55 but it could be 25.

This highlights the fact that when folk talk about pensions they talk about the IR approved structure. However, as annuity rates have declined quite substantially over the years, it may well be that folk have to look well beyond the IR approved structure and the tax relief that it offers and look to a wider set of investment vehicles as at least a supplement, and possibly as the, main vehicle for saving.

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44 minutes ago, regprentice said:

Im not an investor at all. The vast majority of people aren't. My employers pension fund is tasked with making sensible decisions on my behalf.

 

To me someone who doesn't believe in house prices, but believes in the stock market makes sense in its current form as an investment is taking a two positions at once which are diametrically opposed. 

Im not an investor at all.  It's your pot of money. You ARE an investor whether you like it or not.  You gave the e'er (what a strange concept) authority to invest for you. You must take more responsibility and see what options there are. You e'er doesn't give a sh..

is taking a two positions at once which are diametrically opposed.  What have house prices to do with the stock market? FAR FAR less than you imagine.  Almost zero.

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58 minutes ago, Frugal Git said:

Sigh. A good pension scheme is a liquid as running water. You can choose to hold cash, gold, bitcoin (it does make sense), real estate, funds that rebalance themselves, direct equities. Whatever you want, whenever you want. Try selling an actual house on a whim.

I don't care whats in my pension in the same way I don't care whether my car has a timing belt or a timing chain, or disc brakes or drum brakes. A car is a car and a pension is a pension. 

Most of my older relatives have final salary pensions, they haven't had to make a single investment decision yet have a guaranteed income for life, protected from inflation, at around 75% of their working income. Most of my peers at work are also in final salary scheme, as per my earlier post I missed the close of that scheme by a few months. 

Why can these people make zero investment decisions, excercise no financial skill whatsoever, and take away funds paying £30-40k a year, yet I have to find some way to turn 15% of my wages into 75% of my final salary in a low interest rate environment pending a crash. 

It's fundamentally unfair in the same way that the same people were able to buy large houses at 4x income multiples when I'm looking down the barrel of 10 to 12x multiples. 

You being given the 'freedoms' to play with your pension investments is just a way for TPTB to take your eye off the real problem of intergenerational withdrawal of final salary pensions. 

A number of court cases are beginning to be won around employers 'switching off' final salary pensions to younger staff, though largely in the public sector. .. Hopefully something positive will come from this. 

https://gov.wales/written-statement-outcome-court-case-firefighters-pensions

https://www.leighday.co.uk/News/Press-releases-2020/January-2020/Hundreds-of-teachers-are-issuing-legal-claims-chal

Edited by regprentice

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11 minutes ago, regprentice said:

I don't care whats in my pension in the same way I don't care whether my car has a timing belt or a timing chain, or disc brakes or drum brakes. A car is a car and a pension is a pension. 

Most of my older relatives have final salary pensions, they haven't had to make a single investment decision yet have a guaranteed income for life, protected from inflation, at around 75% of their working income. Most of my peers at work are also in final salary scheme, as per my earlier post I issued the close of that scheme by a few months. 

Why can these people make zero investment decisions, excercise no financial skill whatsoever, and take away funds paying £30-40k a year, yet I have to find some way to turn 15% of my wages into 75% of my final salary in a low interest rate environment pending a crash. 

It's fundamentally unfair in the same way that the same people were able to buy large houses at 4x income multiples when I'm looking down the barrel of 10 to 12x multiples. 

You being given the 'freedoms' to play with your pension investments is just a way for TPTB to take your eye off the real problem of intergenerational withdrawal of final salary pensions. 

A number of court cases are beginning to be won around employers 'switching off' final salary pensions to younger staff, though largely in the public sector. .. Hopefully something positive will come from this. 

https://gov.wales/written-statement-outcome-court-case-firefighters-pensions

https://www.leighday.co.uk/News/Press-releases-2020/January-2020/Hundreds-of-teachers-are-issuing-legal-claims-chal

Final salary pensions were *always* a fantasy land Of promises that could never be fulfilled. 

They should not come back. They are imho part of the reason why young people's salaries are so rubbish - because our current t efforts are being used to plug the promises of those blackhole schemes.

Deal with reality. There is no point in harking back to the good old days when things were created by actuaries who lived in cloud cuckoo land. The best you can do now is to take control. Control is good. A DC pension/SIPP gives you that. 

 

 

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My dear dad had a private sector final salary pension. He was one of the few who actually realised it was utter nonsense and how lucky he was.

I thank him for being a sensible, thinking person and not someone who thinks he got it because 'he was worth it'.

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2 hours ago, scottbeard said:

Not directly - but some pointers would be:

DC pensions are great if...
- Your employer pays significant contributions in
- You are a higher-rate taxpayer
- You don't definitely don't need the money until you're at least 58

DC pensions are not so great if...
- The level of contributions going in is so small that they could potentially be overtaken by means-tested benefits (noting that the benefit system when you retire may look very different to today)
- You don't follow a sensible investment strategy (such as taking investment risk when young, and reducing that risk as you near retirement)

Remember the risks change as well:
- The younger you are the longer time you have to invest, and that allows you take investment risk and get reward.  Whilst the stockmarket can fall 10% in a day, and 20% in a week (as we have seen in March) over a 40-50 year period, including dividends, you can make lots of money.
- However, the younger you are the more time future governments have to change the rules, and the more likely you are to impacted by the changes (since often people retired or close to retirement are excluded from changes).  I personally would place a low likelihood on a future government simply confiscating your pension.  However, they could easily do things like change the retirement age or tax treatment.  The government also considered essentially doing away with future contributions to pensions altogether, and just basically moving entirely to a kind of Workplace Lifetime ISA system, with you and your employer both chipping in.

You're right: the minimum pension age today is 55.  The government has announced an intention to change it to 10 years below State Pension Age in the future (whatever the SPA of the moment is) but hasn't yet passed legislation to do so.

Made me look up though that’s what I like about grown up posters on here 

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59 minutes ago, crouch said:

This is strictly not true. The minimum pension age is only 55 if funds are held in an IR approved fund and have followed IR rules. In common sense terms you can retire whever you have enough money and that could be 55 but it could be 25.

This highlights the fact that when folk talk about pensions they talk about the IR approved structure. 

"Minimum pension age" is the name under legislation for the earliest age at which you can draw a pension from an HMRC registered pension scheme.  It is those sort of schemes that this whole thread is about.  You are absolutely right that you can save for your retirement in all sorts of ways, but in the UK "pension" is typically used to mean "HMRC registered pension scheme".

31 minutes ago, regprentice said:

I don't care whats in my pension in the same way I don't care whether my car has a timing belt or a timing chain, or disc brakes or drum brakes. A car is a car and a pension is a pension. 

Most of my older relatives have final salary pensions, they haven't had to make a single investment decision yet have a guaranteed income for life, protected from inflation, at around 75% of their working income. Most of my peers at work are also in final salary scheme, as per my earlier post I missed the close of that scheme by a few months. 

...

You being given the 'freedoms' to play with your pension investments is just a way for TPTB to take your eye off the real problem of intergenerational withdrawal of final salary pensions. 

Unfortunately the likes of you and I will never get a final salary scheme.  That is an intergenerational inequality but unfortunately that's just life and it won't change.  Final salary pensions are gone and won't come back.

Unfortunately that also means you need to take responsibility for your pension.  If you need help with it you can always consult an independent financial advisor, just as you consult a mechanic about your car.  

Also note that the phrase "pension freedoms" is used NOT about freedom to play with investments, but rather the freedom to draw the money down in retirement without having to buy an annuity.  That is a positive development, and not a smokescreen.

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20 minutes ago, scottbeard said:

"Minimum pension age" is the name under legislation for the earliest age at which you can draw a pension from an HMRC registered pension scheme.  It is those sort of schemes that this whole thread is about.  You are absolutely right that you can save for your retirement in all sorts of ways, but in the UK "pension" is typically used to mean "HMRC registered pension scheme".

Yes and of coure I understood that. My point was that you can "save" for a pension in a myriad of ways: starting up a business and then selling out; buying and selling classic cars....

Not only are these other methods available it's arguable that diversification is a good thing in itself as the typical funded scheme will contain the "usual suspects" and therefore have a potentially higher risk than a more diversified portfolio including schemes outside the IR type framework. 

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28 minutes ago, Frugal Git said:

Deal with reality. There is no point in harking back to the good old days when things were created by actuaries who lived in cloud cuckoo land. The best you can do now is to take control. Control is good. A DC pension/SIPP gives you that. 

7 minutes ago, scottbeard said:

Unfortunately the likes of you and I will never get a final salary scheme.  That is an intergenerational inequality but unfortunately that's just life and it won't change.

 

I wonder if either of you went back in time and spoke to a young Gandhi, or Martin Luther King you would say to them just to take the status quo on the chin 'Deal with reality... The likes of you and I will never....' 

I can see the inequality here, so can you, sadly the younger generation is lacking a totemic figure to galvanise that feeling into action. Hopefully that will come. People are certainly trying to deal with that inequality in the courts, in terms of both pension inequality and wage inequality. 

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2 hours ago, Peter Hun said:

Well fear not, whatever happens, you will be very poor as a pensioner and entirely at the mercy of whatever government is in power.

So you do have absolute trust in  government after all.

You are a silly billy... I have other wealth. 

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  • 399 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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