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DonnieDarker

Pension Advice Sought

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I just met with my comapny pensions advisor/salesman today.

I'm paying in 5% of salary (maximum allowed until I'm 30). The company's contribution is double my own. (ie. they pay 10% making sum total of 15%).

I didnt realise until today that the pension is in a high risk venture and is invested (until I turn 52) in equities (50% UK based, 50% in other markets).

Having seen the markets do well in the last couple of years I've been quite lucky I suppose (the fund grew 24% last year, in line with the sector) but my questions are this:

Does this look like a good pension scheme?

If the stock-markets turn for the worse what sort of alternative funds should I be looking to move to?

I am allowed to move out of the fund whenever I like, as often as I like with no penalties.

Thanks for any advice...I'm really looking for my escape plan if-and-when the markets crash.

Donnie

Edited by DonnieDarker

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I just met with my comapny pensions advisor/salesman today.

I'm paying in 5% of salary (maximum allowed until I'm 30). The company's contribution is double my own. (ie. they pay 10% making sum total of 15%).

I didnt realise until today that the pension is in a high risk venture and is invested (until I turn 52) in equities (50% UK based, 50% in other markets).

Having seen the markets do well in the last couple of years I've been quite lucky I suppose (the fund grew 24% last year, in line with the sector) but my questions are this:

Does this look like a good pension scheme?

If the stock-markets turn for the worse what sort of alternative funds should I be looking to move to?

I am allowed to move out of the fund whenever I like, as often as I like with no penalties.

Thanks for any advice...I'm really looking for my escape plan if-and-when the markets crash.

Donnie

Most company pensions invest in bonds with dire returns. I think that over a very long time scale it is dumb not to invest in equities. Your investments sound fine with 50% in UK equities and 50% in other markets just as long as the 50% in other markets arent more than about 10% in risky stuff like Emerging markets or techniology.

Over the next 20 years the stock market may well have periodic falls but should almost certainly due well over that time period as whole.

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I just met with my comapny pensions advisor/salesman today.

I'm paying in 5% of salary (maximum allowed until I'm 30). The company's contribution is double my own. (ie. they pay 10% making sum total of 15%).

I didnt realise until today that the pension is in a high risk venture and is invested (until I turn 52) in equities (50% UK based, 50% in other markets).

Having seen the markets do well in the last couple of years I've been quite lucky I suppose (the fund grew 24% last year, in line with the sector) but my questions are this:

Does this look like a good pension scheme?

If the stock-markets turn for the worse what sort of alternative funds should I be looking to move to?

I am allowed to move out of the fund whenever I like, as often as I like with no penalties.

Thanks for any advice...I'm really looking for my escape plan if-and-when the markets crash.

Donnie

As I see it (but not an expert!):

In the scheme,

- you get tax relief on your contributions ie the contribution comes out of untaxed income

- but the fund may now or in the future have greater liabilities than assets due to the actuarial screw-up of the last decade or two

- and your company may not be in a position now or in the future to make this good

- accounting rules and govt regulation have changed, will force funds to be more conservative but also perhaps force it to make bad/expensive investments

Alternative, a SIPP

You can now open your own SIPP and claim full tax relief on your contributions. After April you can put loads (annual salary) into it. If you invest in ETFs/trackers the running costs of this would be very low and so would the risks over a long enough period, or you could even buy bonds etc. However you would be missing out on you employer's contributions. I think you have to leave your occupation sheme if you want to have a SIPP - but you should check.

Edited by BoredTrainBuilder

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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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