EddScott

Surprised there isn't a thread on this already.

Did anyone see this last night?

Probably one of the worst examples of tabloid TV journalism I think I've ever seen. The Will Writing show was bad enough and had some worthwhile points, last nights show on the otherhand did nothing but put off anyone even considering a pension and appearing to suggest that auto-enrolment and NEST was a going to be a great idea.

The first off show a lady who lost money via Equitable Life - a completely irrelevant issue to fees and charges and only really in the paper because of the type of people that had EL pensions - accountants and solicitors who thought they were being clever at the time.

Next is an story about an IFA practice taking high commissions on pension transfers - yes it happens and it needs stamping out but they are just as many unscrupulous accountants, solicitors not to mention the attrocious behaviour of the retail banking sector.

Topped off with the final story that over 40 years of £200 you have £120,000 invested and the show implied that the fees and charges on some pensions would add up to close to £100,000. They made it sound like you get £20,000.

They had a lady from the pension society (or something similar) who attempted to explain that fund performance was the greatest influence on final pension value and when asked about kickbacks the lady pointed out that the fund was purchased in bulk and a discount provided - usually passed to the client in low initial charges or AMC but lets not let the facts get in the way of gutter press reporting.

Panorama really has become the Daily Mail show.

f1_fan

iTrader: (9)

I gave up watching it for that very reason.

If I want a load of poorly researched, headline grabbing, biased and blinkered tosh I come into NSR

kingofturds

iTrader: (1)

f1_fan

iTrader: (9)

Just writing in the style of NSR

Dingdongler

I missed that show and agree that a lot of previously well respected investigative journalistic programmes have been dumbed down.

However most pensions and funds are rubbish, they are basically a big con. I wouldn't trust anybody with my external pension fund, I'll invest it myself thanks

EddScott

Which is exactly what the program said and it really isn't true. A well advised and well funded pension should have no problems keeping someone comfortable in retirement.

Dingdongler

I disagree and would welcome you to prove me wrong.

I need minimum £50k a year when I retire, I would also still like to make sure I pass on a decent amount of money/assets to my kids when I die

Lets pretend I'm starting out at age 25 now, and aim to retire at 60. At 60 I need the equivalent of the £50k a year as I mentioned. Explain to me how you would achieve that, and I want a 90% gaurantee that I'll get my £50k a year.

EddScott

Your guarantee would have to come in the shape of investing the money in savings accounts rather than investment funds. This would at least ensure your fund would not go down although what interest rates you receive compared to inflation is anyones guess. There are specialist pensions which allow you to do this.

You are retiring at 60 which is quite young so your annuity rate is likely to be quite low. As you are choosing a very low investment strategy your actual monthly contributions are going to have to be very high. You'd probably require (in todays money) around £750K in your pension. I'd say about £1500 a month should cover it - less if you were prepared to accept some risk.

You may want to scoff at this and clearly my answer is as serious as your question, but the average middle management drone in the local council has a pension fund of close to these figures.

Like I said, a sensible approach to investment advice and a proper commitment to a pension fund rather than a token gesture, will ensure that you will have something worthwhile at the end of it. You might be surprised to learn that some advisers actually take pride in making as much as possible for their clients.

john banks

Do you want £50k to be index linked so that you have the equivalent to £50K purchasing power when you retire?

madscoob

iTrader: (3)

did they forget to mention that on average it takes 12-14years just to get back what you have paid in over your working years . great if you live to 80

Turbo2

I know this is not relevant to the show, but I always think that the money I put into my private pension is "written-off" (and in Equitable Life's case, it really was!). I just know that if I invested it elsewhere (other than bricks and mortar), I would just end up taking it out at some point and spending it. So I'd end up with a lovely collection of cars come 65, but no money to live on!

Dingdongler

My question is a serious one and relates to me, and I'm not scoffing at anything. I'm not sure you have actually explained how you would achieve what I have requested. Also

1) You've said the only way to even get near a guarantee of the income is to put it into a savings acct!! Firstly my capital would easily be eroded by inflation. This is an immediate fail. At todays interest rates I would need approx £2million in the bank to achieve my £50k per year minimum pension

2) Why is 60 early to retire?? I started full time work at age 23 and have never had a carear break. It's a very stressful job and very much want the option to go at this age. If I'm very healthy I'll consider going to 65 max.

So rather than just very general comments about how great pension advisors and vague comments about not using a pension as a token gesture, explain given myy circumstances how you would do it.

I have my own strategy as to how I will acheive it, I want to know yours

jasey

I have a long term strategy.

Spend all my money by the time I'm 70 and then kill a policeman.

Life in prison - free healthcare, food, gym membership, television etc.

And it will get me away from the wife

can't find a down side

EddScott

You wanted a 90% guarantee that you would get your £50K. To achieve a guarantee you can really only fix the growth rate over a fixed term. My mention of inflation was to point out that this wasn't a good strategy.

You also receive tax relief on the contributions plus you receive tax free cash (under current rules) I'm afraid the figures used were in todays money.

60 is early to retire when compared to annuity rates - the later you take your pension, the higher the annuity rate.

My comments are no more vague than your 2nd post.

My strategy for pension provision is no different to anyone else who is serious about their pension. A reasonable % of salary and a watchful eye on the funds to aim for a good double figure annual return averaged over the term.

EddScott

**

Turbo2

Hardly fair on the policeman though is it? Why not just kill your wife and be done with it? In that case you won't run the risk of them letting you out early on "ill-health" grounds like the Lockerbie bomber and then having to face her again!

jasey

If I kill the wife there would be too many witnesses claiming she had it coming - I probably wouldn't be convicted

I'd search out the policeman that throws pissed grannies into cells and then claims he/she slipped on spilt tea

Dingdongler

Yes, I should have mentioned that.

Dingdongler

1) So you can't guarantee my anything?

2) You do however want me to put in large amounts of my income in

3) If I buy an annuity at an age when I may have a few years to live I'll get **** all anyway.

4) Once I die all that annuity I would have paid for is gone into thin air, nothing to pass onto my kids. As you mentioned a middle rank office drone may have a pot of £750k, mine may well run into millions

5) You want me to pay you to watch the pot and get double digit growth. Something you want to be paid for but provide no promise to do so. You will get paid regardless, as will all the fund managers even when they lose money.
I'm sure it's been shown time and time again that 90% of fund managers don't even beat the benchmark index ie you would have done better (or as good) just investing in a tracker that reflected a similar area in which they were investing (once you take into account their fees.


I'm sorry but I think these types of pensions are a mugs game, as yet even despite the tax break nobody has managed to convince me otherwise.
The thing is, millions of other people feel the same as a result of what these pension funds have returned over the last 20-30 years. That's one of thhe reasonns why just about everybody and their mother has turned to property as a pension nest egg

And I'm sorry but your reply is a lot more vague then mine. I've told you when I started work, when I want to retire and on what income. Your answer is just basically telling me to retire later, put an unspecified % of my income in whilst you keep a 'watchful eye' on things!!

EddScott

1) No, can you guarantee your retirement? If so, kudos to you.

2) Not large no, reasonable and affordable. I have not idea what is reasonable and affordable to you hence the unspecified %

3) Retire whenever you like, its the annuity rate that dictates the amount. Its quite possible to ensure that if you are dead the pension will continue.

4) Completely depends on what type of pension you have. See 3.

5) You forget this is a commercial enterprise and people have to be paid. By all means make your own fund choices however many seek advice. As for passive Vs active I completely agree there are arguments for both investment strategies.

Clearly you'll never be convinced that pensions are not a "mugs game" so the discussion is effectively pointless. You cite property as being peoples nest eggs? Do you not need somewhere to live in retirement?

My reply was not vague - your post lacked the amount of money you were able to afford. It would seem a little odd to demand a retirement income of £50k but yet you were only prepared to invest £25 a month. I did not tell you to retire later, I told you how annuity rates work.

Dingdongler

1)Not sure what you mean by 'can I guarantee my retirement'?

2) I didn't feel the need to say how much I can afford. I've told you what I want in what space of time. Just tell me how much I need to put in, if I can't afford it I'll tell you. I'm not a retard, I wouldn't expect a retirement income of £50k if I was on low wages now and wanting to put £25 a month in would I? Obviously the £50k represents a smaller proportion of my income that would suffice once the kids have been schooled etc.
Give me a number please?

3) Not sure what you mean when you ask me whether I need somewhere to live in retirement. Of course I do, what's that got to do with loads of people investing in BTL for their pensions?

4) Yes it's a commercial venture, but it's a commercial venture highly weighted towards all the people making money out of it and not towards the consumer. I find this unacceptable

hodgy0_2

do you enjoy having your meat delivered by the back door

hodgy0_2

also financial products are designed to make the people selling and administering them money


the benefit you derive is neither here no there

Gregsti01

iTrader: (1)

In thirty years time various banks will screw up your pension nothing set in stone.Get a deposit box,each month buy yourself,gold,rare stones,then every so often change the bank,if times get hard take a little out and sell it.When you get old give the children a bag of nuggets,but dont give the wife the key!!!!

john banks

^ agree with that, it is parasitic. Pension regulations result in inflexibility, excessive charges and the encouragement to make an investment to defer tax to when you will hopefully be paying less tax. The investment choice itself, well, it has been shown repeatedly that active management does not outperform passive management.

EddScott

1) You are asking for a 90% guarantee of £50K. This I cannot give you and I asked if you could.

2) I did give an approximate figure of around £1500 a month. If £50K a year is a small proportion of your current salary, £1500 might be achieveable. Over the course of 35 years theres no reason why £630K could not achieve over £1m.

3) You said people are using property as their nest egg and most people only have one home so hardly a retirement vehicle for the masses. BTL is your answer as an alternative to a pension? It works well for those that can afford multiple houses or support multiple mortgages, the periods of vacancy and the repairs and upkeep to the properties etc.

4) So all these people with BTLs are renting homes for the exact cost of the mortgage and other associated costs and not making money out of those that can't even buy 1 house let alone a portfolio of properties?

SPEN555

Take out a Life insurance policy that pays £50k a year then go jump under a train

madscoob

iTrader: (3)

you are all missing the important part they dont want you to know AND THAT IS ITS UNLIKELY THAT YOU WILL LIVE LONG ENOUGH TO GET BACK WHAT YOU HAVE PAID IN , do the sums i had my pension statement from work the other day approx 14k in fund if i was of retirement age today i would get 1090pounds per year 14k devided by 1090= 12.84 years 68+12.84 is 80.84 years old unlikely to get that old me thinks

Gordo

You're better investing the max into a shares ISA each year and picking long term (safe, yielding) stocks yourself.

See this article here:

http://blogs.telegraph.co.uk/finance...ement-charges/

A 1% annual charge (usually nearer 2.7% when they include the hidden audit fees etc) hammers your returns on a cumulative basis, Often they have a profit share as well - which means the vast majority of upside goes to the fund investor rather than you - and they have downside protection through the annual fee - i.e. even if they're rubbish they win and you lose. It would be much better if they took, say, 20% of ultimate returns achieved, but they'd hate to kill the golden goose and their cashflows wouldn't work.

Gordo

Gordo

dp