father_jack

If you're worried about the charges, a good dodge is if you can find a mate who works for one of the life companies and can get them to take the sale and re-invest the commission into the pension and bung them a few quid.
I did this a few years back - zero charges and bunged the person in question £200. Perfectly above board this was with Standard Life but I presume most life companies will let their staff do this..

MarkO

Carl:
I'll be the second to admit it then. I'm 30, earn decent money, and don't have a pension yet either. However, my dad (a retired IFA) nags me constantly about it, and my account is on the case at the moment, so I suspect that will have changed by the end of Jan.

Tiggs

father jack- them were the days- it wont work now as the adviser will earn bugger all to give back!

most pensions are now on 1% amc only, trust me, there aint much there for the adviser!

T

father_jack

What does 1% amc mean? i.e. 1% of what

[Edited by father_jack - 12/19/2002 4:49:01 PM]

Fast_Blue_Scooby

The company that I work for has a good pension scheme, well it did at the time I joined, 12 years ago. I can retire at 60, a long way off at the moment, but I will get around 2/3 of my final salary!! Yippee!!

However even though it would be good just to sit back and rely on that, and I would be well off on that money anyway. I am going to be investing my spare money each month in various schemes, house property and the like so when I do eventually retire and it will be a lot sooner than 60, I will not only have made my own arrangements but will also be getting my works pension, you see I can buy extra years when I want so can tie it in to retire say at 45, 50 or whatever.

MarkO

Heh. Another final salary scheme, eh? Watch that slashed in the next couple of years.

Tiggs

fj- amc = annual manag. charge, 1% of whatever is in the pot (otherwise know as bugger all)

think about it, if you put £500pm in thats £6k at the end of year 1, thats £60 after a year! you think the adviser will earn much if the firms making £60 after a year!

now do the maths with £100pm!

T

Fast_Blue_Scooby

I've just had a letter confirming exactly what I will be getting. Right here in front of me. So how can they slash it??
Anyway as I said before I am making my own provisions.

camk

Tiggs,
As ever the 'investment community' are as much to blame as the punters. They promote themselves as experts but always have the stocks can go up as well as down clause(hardly promotes confidence). We're supposed to be buying growth and experience, during the major bull market the growth was much less in Pension Funds than the general market due to fund managers 'not exposing themselves to undue risk' yet when it all goes t1ts up the fooking world falls apart in Pensions, whatever happened to fund managements, anyone can make cash in a Bull market. these guys are sh1ttin themselves as they have been exposed as Snake Oil sellers. Therefore they are stirring up a hornets nest to encourage us to fire in more cash to bail out their current position.
Pensions will go the same way as Endownments unless these gits and the Government get their act sorted out and start living up to the hype and promise. No-one has any faith, therefore there is no commitment. I'm sure the punters who are retiring today or attempting to pay off their endownment mortgages will say its all their fault......not quite. They are just unlucky to be at the end of a bull market, well it SHOULD NOT be like that, they were probably not advised well of this being a possibility.

Cheers
Cammy

LEE P

I agree with cammy, its o.k to say stick hundreds of pounds a month away in thwese pensions but arent thhey stock market related?
What about those two companys that have been flushed out from cover that lied about there profits? and thats just two that we know about! the months running up to that catastrophy did you or anyone else suspect it? what happens if over the next 20 years theres more of these companys that have bullsh1tted there profits to get investors?

im 29 and the next 31 years or whatever i decide is a long time in this economic climate to say X Y Z company will still be up and running imho.
im investing my money in property and about to buy my second to renovate to let out, but the way i look at it is the house market is high s alot cant afford to buy so they rent.
even if it slumps in the furture like it did before all the people that cant afford to keep there home because the interest rate has shot up they will need some where to live so they rent and ill hope house prices come back.

i do not know a poor IFA and i have to clients of which they dont know i have contact with both and the IFA has lost the company director 75k off his pension fund due to the stockmarket and has been advised to ride it out! lets just say hes seriously pished off, bet the fund manager didnt loose 75k of his salary.

another client of mine retired 2 years early to make sure he got his 2/3 salary pension as he thought it was to much of a risk to loose if they decide to slash it before he retired!

i bet the IFA are slightly worried at the mo and are taking mild earache off ther clients??

Trout...

Lee,

so which Life Offices lied about their profits? Just intrigued.

For others, remember that Life and Pensions offices work on your behalf to balance that fact that at any given time property, equities, cash or bonds outperform the others.

So recently it has been property - next year it will be bonds - the year after possibly cash.

Bottom line is - get the best pension that you can afford - and it isn't necessarily a stakeholder. The major life offices continue to offer good value personal pensions that are likely to give a higher return than a stakeholder.

Use the FSA comparitive tables to find out what you can expect from various investments with various companies.

Trout

Lemmy

The trouble with pension schemes is that you are at the pension companies mercy and cannot do anything about their malpractices.

I have been religously saving into a pension scheme with my current employer for 12 years at upto 16.5% of my salary. The trouble is it was Equitable Life and I have lost at least 25% of my fund tranfering out before it all goes belly up.

With money purchase pension schemes you have to buy an anuity when you retire, which currently pays out at a poorer rate than you can get with other investment schemes. Also the fund cannot be inherited like normal investments. I reckon that at the moment you are better off saving into an ISA. You do not get tax relief but this is more than counter acted by the better growth, no tax on the interest, no other hidden Labour government taxes and the flexibility to do whatever you want with your money come retirement.

Alan

paulr

Tiggs...you make some good points but there are two things that put me off getting a pension,even though i know i should.

1.Whats to stop me saving for 20-30 years and then the stockmarket go bang and i loose it all.

2.I hate the idea of giving my money over to people im not sure i can trust.

IMO thats the number one problem.....TRUST......can we trust pension companies...they dont exactly go out of their way to generate trust.

Tiggs

stockmarket, stockmarket, stockmarket.....anyone with a life office run personal pension can switch it to cash or fixed interest in seconds.

the underlying fund can be as diverse as you want, if you think the stockmarket sucks put all your pension in cash for 50 years.

stockmarket, misselling, charges, etc are all used by ppl as a reason not to save for retirement....what they really mean is they dont want to save cause if they did there is BOUND to be a product to suit them.

fast bloke

Far to drunk to read all of this, but I am with Tiggs. The things that confuses me most is the people who pay 100 a month into pension and 100 a month into life + critical illenss cover. Guys - you will more than likely need your pension. - You will hopefully not need your life and CIC. If I told you that you need to put away at least 10% of your earnings or you would be homless in 25 years, what would you do? Ok, so If I told you the same thing but said your house would be paid for but you would die of hypothermia why is the class answer always 'I'll sort that when I'm a bit older'

Tiggs

drunk but spot on!

Mr evolution

I think a pension is a waste of money for starters if I had invested in one for the last few years of work as it stands i would have lost my money instead I saved every penny and used my scooby fund to buy a house to rent out and got a 60% return on my money . At the end of the day not saving for the future IS stupid but IMO pensions have proven to be a bad way to do it and I would rather get a real return on my money than **** abput with a pension that keeps my money were I can't get to it and gives a pitiful return.

Tiggs

scary talk, if ppl really belive that then there arent gonna be many pensions living happy in 30 years time!

camk

Tiggs,
if we can stick it in cash or fixed interest then why pay 1% management charges..only benefit at this time is tax relief and that at the expense of flexibility...Your right that too many people make no provision, however following the herd is also risky IMHO.

regards
Cammy

BTW i have a pension, DB scheme, if it gets changed to DC scheme then I've been done over by my company or pension folks. No surprise then.....What about all these bloody firms that took 'payment holidays' during the so called good time. They should be boosting the payments at bust times to balance it up. Still no trust....

paulr

NO...NO...NO.....every year for the last 4 years i have put the max amount into a cash ISA,and intend to carry on doing so.Also i've just started saving £100 per month in a building society savings plan.
I know i loose out on tax relief,but

1.I'm in control of it,
2.It should be reasonably safe.

It also encourages me to save MORE because i know if i ever hit hard times i can dip into it,hopefully i wont have to btw.If it was tied up,and at the mercy of fund managers i'd only save the min amount.

I'm coming onto nearly £200 per month saving atm.No way would i do that if it was out of my control.

GM

There are two sides to the investment risk issue. Sure, sticking all your savings/pension fund into cash is going to guarantee your capital - but the downside is that you never have any chance of making more than a few percent on your money. The phrase that is sometimes used is "reckless conservatism". If you're investing for the medium to long term history suggests that you will virtually always be better off with an equity based investment. Certainly for a pension you'd want to start moving out of equities and into cash/gilts maybe 10 years or so before you expect to retire to limit any losses due to a big fall in the market close to retirement when you won't have time to make the loss up.

paul w

Goto agree with Mr Evo and paulr(posted while i was tapping away)

I'm a young 34 now and I've never really earnt good money 16k max but spent and saved wisely and decided that paying into my pension was not good as i got into the stock market at the same time with free shares and was making far more than my pension comp were and i knew fa and these guys were pros. Also could not afford much as i didn't earn alot.

Stopped paying into pension 6 years ago and started buying houses with smallish deposits instead,now have 6 nearly 7 houses that i rent out and these will be worth far more than any pension i could have paid into.

I believe that pensions are for the financially naive,there are better returns out there if you open your eyes and remember if you become ill and need your funds they are locked away,my way i just remortgage or you access your trusts whatever earlier.

Just my views Paul

[Edited by paul w - 12/22/2002 9:29:13 PM]

paulr

Not in my book it doesnt.To me history suggest that most of the time you will be better off,but that there is also a sizeable risk that at some point you may loose a fair amount of money.

A bit different from virtually always being better off.

camk

Tax relief on Pensions is a bit of a fantasy. Sure your don't pay tax now on the income you put in but you do later on the pension income that comes out(plus on the dividends recieved by your fund during the life of the investment), best hope is that you receive relief at 40% today but pay at lower rate on pension....not exactly a cheery prospect that you'll not be getting enough to pay higher rate.....

I've got no particular beef with the stockmarket, now is a better time to invest than 2000 was IMHO. My issue comes with management fees that buy you professional management and its still goes down the toilet in line with everything else. They want it all ways, management fees are fixed and they explain less than spectacular gains with minimising risk and then when things get bad they still get whacked. Endownments=ISA's=Pensions, same situation, herd mentality leads to ordinary folks getting fleeced by the big investment firms. Time and Time again.

We need a general overhaul of Pension management to allow people to do it in a variety of ways, its currently far too rigid IMHO. Footballers get to put more into pensions when they are playing as they are deemed to have short careers, this probably happens to lots of folks who have a short period in their career when they are earning the most. Why can people not just whack in what they like.

Regards
Cammy

GM

Max contribution rates are the same for footballers as for anyone else. However they can retire at 35 at the moment - although the Green Paper last week proposes removing that option. There are actually a good number of occupations where you can get an early retirement date - most sports people, dancers, croupiers(!), money brokers etc.