Rob Day

iTrader: (78)

Hey all,

I was hoping this could be a page where we could share our experiences and investments.


I have been looking at my pension forecast recently and I'm relatively pleased with the progress, however I would like to start investing a little more savvy with regular reviews, currently I only check it once every 3-6 months if I am lucky.

I am likely to have at least another 20 years paying into my pension so plenty time to make wise choices, currently investing in American Shares.

Robert.

hedgecutter

iTrader: (5)

Financial products are just a means for some salesman to make money off you. Having been burned by morgage endowments, and a pension that may pay for a night out when I'm about 70, I make my own direct investments now...don't trust the *******.

Rob Day

iTrader: (78)

I know what you are saying, however my employer match my contribution so I cant really lose out here, its just knowing where to plant the seeds, and try and avoid the weeds!

The Trooper 1815

iTrader: (31)

All mine are MOD. Ns salesmen.

andy97

iTrader: (1)

Frankly, very few pensions are worthwhile. I no longer pay into a pension and haven't for way over a decade. I use to have a Pearl pension(remember them)- Pearl were taken over by Australia life who began upping the charges to administer my pension.. After years of paying in my returns were dwindling. I was advised to jump ship for Clerical medical at a whopping 50% haircut to my lump paid in to Pearl. Everything was ok for 2-3 years then their charges began to ramp up again. I was advised to stop paying more money into them and cash them earliest point in my life.

I really doesn't matter how much you pay in because the charges and exit penalties will crucify your pot. Its clearer now to some degree because alot of charges have to be declared and commission based rewards for salesman has been abolished. We pay our IFA a fee for managing our financials, he no longer receives commission.

Speak to several, not just one IFA and try to piece together information that all are giving and decide if you really want to have a pension. Its all to do with maintenance charges not the biggest returns which will ultimately give you a bigger pension.

I personally would buy into another property or pay off your own mortgage earlier. The returns from rental arent amazing but its better than cash savings and there is likely to be some capital growth in the building- housing never drops over the long term.

Riskier is stocks and shares, if you can afford to lose then its perfectly fine to invest a small proportion of your savings to get higher returns. Again its about timing and getting the stock at the right level and riding the fluctuations, which there will be alot. Problems arise if you need to access cash and sell stocks at the wrong time.

hedgecutter

iTrader: (5)

Andy97, totally agree, like you, I have a Pearl/Australian Mutual endowment. It was taken out when I was about 10 years old, and is less than £200 a year. It is now a closed fund, having been bought by an "asset stripper" manager.
So a few years ago, in my late 40s, I asked when it matured, only to find it ran until I'm 65, with no chance of growth and heavy exit penalties. 55 years!! When I suggested that it had been missold, they showed me my signature (10 year old child's) on the policy.
And that was nothing compared to my morgage endowment failure, which was also bought up.
And now the same has happened to my pension.
Don't trust the c**ts.

coupe_20vt

iTrader: (2)

I must be in the minority on here as I'm very happy with my current pension(s).
My pot as of 1/5/19 was £680k
I'm 55 in January next year and have made plans to move it into a SIPP and use drawdown to take an income. I'll take 25% tax free, pay off my mortgage, do some work on the house and have enough left to give my children a deposit on their first property.
I was lucky enough to have started paying into a pension at 19 and continue to pay in today.

njkmrs

That's a nice pot..!
A guy I used to work with has a drawdown pension and if I understand it correctly according to him the pot is his. If he dies it is his families pot.( so doesn't get swallowed up by an annuity provider) It can increase in size if you don't take too much out in big lump sums as it is still invested. ( yes it can go down as well like most investments) .
You can take the money as you need it and take out none if you have money coming in from elsewhere.
Seems like a far better option than a standard pension or annuity.?
Regards
Rob.

Linksfahrer

I'm 55 , After "Contracting out" in 1988 , I took the government paid bonus from memory 7,5k into a plan with now defunct Cornhill ( they sponsored the Cricket ) but they like others took a 1,5% management fee each year
anyhow I paid contributions for 3 months then left the UK to work in Germany, and never touched it since. The plan was supposed to be conservative (20% in shares / 40 % property equity / 10% money interest / rest in commodities Gold/Copper/oil etc) however the growth results were far less than satisfactory.

I still get statements from the "aftermath" firm called Phoenix, and after 30 years the plan is worth 12250 that represents an annual yearly growth of just 1.7% Wow .. glad I didn't keep paying.
and if of course I had just put it in the bank at 1% under Minimum bank interest rates , it would be worth 3 or 4 times that figure, of course you would need to discount for inflation to find the net present value.
which yes you guessed it for the Cornhill / Phoenix pension would be now worth far less than the original investment in real terms.

Luckily I have been working in Frankfurt Germany since the 80's and have done two things, As paying a rent was dead money , I bought German government bonds at 4 and 5 % in early 1990's in order to build capital for a house deposit and then built a new house in 1997, after 25 years the mortgage was to be completed , but earlier due to paying extra "sondertilgung"
and its market value now is at 250% of the original outlay.

Of course I paid into my statutory state pension in Germany. but I have also paid class 2 NI for the years away and will receive at 67 the basic UK state pension +
in combination the German one which based on lifetime earnings. both taken together will make a sum of about 75 % monthly of my earnings today, nothing special , but I have a 5 bed house in my name right.

I conclude that everyone who is not a guru in the finance world who wants to protect his lifetime investment, and provide a family a home, simply cannot afford a "high risk investment"
His existing and developed capital should be for the most part saved at the best bank interest for a deposit, then buy a house in a stable economic area "Your money is as safe as houses"

coupe_20vt

iTrader: (2)

Yes with a SIPP, if you die the whole pot goes to your family and there are no tax issues. Annuity rates are pretty rubbish at the moment, £100k will get you £5k if you're lucky.
I don't intend to fully retire until 2025 so hopefully my pot will continue to grow as will the pension I'll still be contributing too.

Rob Day

iTrader: (78)

I just tipped over 40 last year so I have a long way to go to retirement, my current pot is predicted to be between 400K - 550K at the age of 67, who know where it will end up, but in the meantime I would like to make the best I can from my investments.

My main question to those that are bothering with a pension is what are the best industries to place stocks and shares?

Robert

BMWhere?

Unless you have a good scheme with you employer where they also make a contribution, pensions aren't really worth it any more. The corporate greed of the pensions providers means that they are the only winners these days and you're unlikely to get a decent return. You're way better off planning your own retirement with property and stocks and to minimise your living costs in retirement with an energy efficient home. Although the government are starting to put more requirements on landlords so property trading rather than renting may be a better long-term if rental prices don't increase.

I stuck lucky with one pension scheme, only paid in for six months before the company got in trouble for mismanagement. I was paid out more in compensation than I ever contributed and the find was then taken over by another company who then paid in a lump sum to all members, again more than I ever paid in.

In Germany I now have to contribute to the state pension scheme which my employer also pays into. It should pay a reasonable rate especially compared to the UK state pension as the German system is related to final salary and the number of years you paid in. Combine that with a couple of rental properties and other investments and a plus energy home I'm currently building, I should be pretty set for retirement.

Rob Day

iTrader: (78)

I pay in 5%, my employer matches my 5%, has been the case for a long time now well before the changes in pension regulations. I'll continue as I am with the floating my own shares within the pension fund, and as for property I am not in a position to be thinking about this with two dependant kids, and the house is overkill for our needs now, but the prices of property around me are continuing to rise well year on year so I am happy to make the more later in life and cash in.

Robert.

^Qwerty^

Me and the Mrs have one rental property at the moment, the big question will come when I hit 55 and do I take 25% and buy another one or two. I spoke to a pension adviser earlier this year and they seemed to be very cold on that idea. I can't help but think they have an interest in me keeping the fund growing rather than if we buy a house or two. Clearly if we buy more property we start to get income straight away and we have various options around this:

1) I keep working as I am and put the property income in Mrs's name to reduce tax burden
2) I drop hours at work/semi-retire to avoid the tax burden on myself
3) I drop hours at work, put the rental in Mrs's name and she stops work altogether, and we still pay less tax
4) others?

I'm sure there are pro's and con's to this, but I really don't get why anyone would carry on working until they hit 67+ unless they really want to or have no choice.

The other interesting thing I've found is that now I have access to my pension fund on a web portal, it's value fluctuates massively. It's all relative of course, but when I logged in last month it said my fund had grown my £35k this year, but today, it's saying £1k !!!!. Obviously picking the right time to do anything is going to be very important. I'm currently invested in medium to high risk areas.

Rob Day

iTrader: (78)

Me too, but 75% Medium, 25% High Risk at the moment.

I am in the same camp as you, do not intend on working until my natural state pension retirement age and will ultimately have invested elsewhere, however soon as I have technically 10% of my salary going into a pension fund for 5% of my pretax wage, I might as well carry on with it.

coupe_20vt

iTrader: (2)

With my Stakeholder pension I was invested in Medium and High risks areas up until I reached 50. I then moved it all into low risk funds. It had grown at a very good rate over the years but did take a hit in 2008 during the banking crisis. Thankfully it had got back to it's original value by 2010.

For my current company pension, I pay in 14% of my salary and my company puts in an additional 9%

Henrik

iTrader: (5)

To the people saying "don't bother with private pensions", I will say this.

As the money you're putting in to a pension is tax-free, your investment automatically gets a boost at your marginal tax rate. I imagine for most people on here, that will be 40%. Of course, you then can't access the funds until you're 55 (or even older depending on when your retirement age is), but that 40% is hard to argue with.

Even if you just leave it in a basket of mutual funds, you should come out much ahead of investing in similar funds / shares yourself, given the tax rebates.

If your company also contributes on your behalf, you'd be even further ahead by going pension route.

Crazy not to, to be honest.

andy97

iTrader: (1)

For those who get contribution from employers maybe it offsets the management charges. I didn't have that option so the savings in terms of tax benefits might of looked good but were eaten away by charges. Im fortunate to have a property portfolio significant to ignore my piffling pension pot- and I am in control of it, so can decide to cash it, change rentals etc

^Qwerty^

Mine is currently about 40% up on what I've paid in, which is not a bad return in my book.

andy97

iTrader: (1)

Have you taken in the devaluation of currency?

You could emd up net gain of nil or overall loss over 30-40 years

^Qwerty^

No, that was a very basic % calculation.Since I started paying in to pension funds, the cumulative prices increase is ~100%.

In some respects, it's irrelevant anyway as my employers would not or could not have given me a cash alternative to that of paying in to my funds - and as you can see above, it's not my only egg in the basket.