Discussion
I know its a bit off topic and dull but whats the general opinion on personal pensions.
I've been paying towards one for 15 yrs or so, but I'm beginning to think that rather than putting money away for the future, I'm just funding some 'fund managers' (for want of a better term) comfortable lifestyle..
Bearing in mind the trouble with Royal life, Sun & Royal alliance etc. would I be better paying off my mortgage faster, new car, blowing it out my a$$?
cheers chaps & chapettes.
I've been paying towards one for 15 yrs or so, but I'm beginning to think that rather than putting money away for the future, I'm just funding some 'fund managers' (for want of a better term) comfortable lifestyle..
Bearing in mind the trouble with Royal life, Sun & Royal alliance etc. would I be better paying off my mortgage faster, new car, blowing it out my a$$?
cheers chaps & chapettes.
Mrs Smifffy was a project manager with a blue chip pension provider, and is firmly of the opinion that pensions are as much use as a hedgehog in a condom factory.
Pension companies have no obligation to offer any sort of guaranteed terminal bonus on pension schemes, even on the guaranteed return schemes they are struggling to meet the % returns that they have "guaranteed".
Basically the actuaries are all laughing at the returns they will now be giving, and many of the providers of stakeholder schemes have now closed the funds to new members because they cannot meet the returns without raising the charges which they are not allowed to do. Fortunately with your average pension there are no such charge limits and they can sting you with all sorts of admin charges.
With interest rates as low as they are, it's a little difficult to say where your money should go. Property is one answer, but then the market has been flooded with buy to let entries. The stock market is unstable, and shows little growth.
Perhaps one of the best areas is the gold market. Seems to have shown consistent growth over the last 18 months. Other than that, invest in cars and beer (although not at the same time probably)
Pension companies have no obligation to offer any sort of guaranteed terminal bonus on pension schemes, even on the guaranteed return schemes they are struggling to meet the % returns that they have "guaranteed".
Basically the actuaries are all laughing at the returns they will now be giving, and many of the providers of stakeholder schemes have now closed the funds to new members because they cannot meet the returns without raising the charges which they are not allowed to do. Fortunately with your average pension there are no such charge limits and they can sting you with all sorts of admin charges.
With interest rates as low as they are, it's a little difficult to say where your money should go. Property is one answer, but then the market has been flooded with buy to let entries. The stock market is unstable, and shows little growth.
Perhaps one of the best areas is the gold market. Seems to have shown consistent growth over the last 18 months. Other than that, invest in cars and beer (although not at the same time probably)
Pensions are the worst thing to put your cash in at the moment second only to my Halifax ISAs - they are w@nk. I bought a house to rent out 4 years ago, it makes money on a monthly basis and is rented to a divorcee and her 3 kids so they will be there forever. Its value has doubled in this time so compared to my shares* and other investments it was by far the best option. My advice would be to get a property to rent but remember budget your borrowing on what the repayments would be at 7 % interest rate. This way you wont get stung when it rises again - common sense really.
* arrrghhh - I try not to think about how much money I have lost
>> Edited by broccoli on Tuesday 3rd September 17:33
* arrrghhh - I try not to think about how much money I have lost
>> Edited by broccoli on Tuesday 3rd September 17:33
Mind you one or two folks have posted here - even just in the last week or two - about the problems of evicting non-paying tenants.
On the whole, probably better not to buy-to-let with a mortgage. So even if some w@nker doesn't pay and takes a while to get rid of, you're not stung with the mortgage repayments and you still get the capital appreciation.
On the whole, probably better not to buy-to-let with a mortgage. So even if some w@nker doesn't pay and takes a while to get rid of, you're not stung with the mortgage repayments and you still get the capital appreciation.
I was in the lucky position of having made some dosh a couple of years ago on a company sale. I considered putting a lump sum into my pension to use up the balance of my last 7 years allowances to avoid the taxman getting his grubby mitts on it, but in the end I decided I'd rather have 60% cash now than 100% tied up in a pension, of which I could only extract 25% in cash on retiral, and the rest has to go into some poxy and by then worthless anuity.
I think pensions are like anything else in life - if you want it done properly, do it yourself.
And the best option is to spend it all and die penniless - having had a whale of a time. If you run out of dosh, rent a place from someone who has bought to let, and then don't pay rent - I hear it can take a year or two to evict you
I think pensions are like anything else in life - if you want it done properly, do it yourself.
And the best option is to spend it all and die penniless - having had a whale of a time. If you run out of dosh, rent a place from someone who has bought to let, and then don't pay rent - I hear it can take a year or two to evict you
Life is about balance, yin & yang.
Don't put all your eggs in one basket. Yes, shares have done s**t for the last few years and property spectular. If you swap over now and then it all goes pear shaped the other way..............
Pensions is a tricky emotional issue at the moment. They are becoming more expensive as we live longer and interest rates drop. (Actually some people do consider living longer might actually be good news). You can't expect to retire at 50 having saved nothing in your life and some magic pension appears for you to do all that you want for the next 30 or 40 years.
Talk about spend it now just because pensions are "expensive" worries me. I don't know how people think they are going to eat in their old age. Don't expect the government to bail you out in x years time. I don't want to pay taxes out of my savings for you because you were living it up while I was planning and having to wait for my Tiv. Just don't seem fair.
Maf
Actuary
PS Not allowed to give financial advice, thats reserved to people who flog you policies & products, quite often without 2 o'levels to rub together. It is possible to find a good IFA, though difficult, and you have to pay for it. You wouldn't expect a competent mechanic to service your car for free would you? Skills cost.
PPS More than happy to explain "how things work" on this pensions malarky, if anyone has any specific questions I can be of assistance with.
PPPS I've paid most of my mortgage off, definately a basket worth chuck an egg or two into.
>> Edited by Maf on Wednesday 4th September 00:13
Don't put all your eggs in one basket. Yes, shares have done s**t for the last few years and property spectular. If you swap over now and then it all goes pear shaped the other way..............
Pensions is a tricky emotional issue at the moment. They are becoming more expensive as we live longer and interest rates drop. (Actually some people do consider living longer might actually be good news). You can't expect to retire at 50 having saved nothing in your life and some magic pension appears for you to do all that you want for the next 30 or 40 years.
Talk about spend it now just because pensions are "expensive" worries me. I don't know how people think they are going to eat in their old age. Don't expect the government to bail you out in x years time. I don't want to pay taxes out of my savings for you because you were living it up while I was planning and having to wait for my Tiv. Just don't seem fair.
Maf
Actuary
PS Not allowed to give financial advice, thats reserved to people who flog you policies & products, quite often without 2 o'levels to rub together. It is possible to find a good IFA, though difficult, and you have to pay for it. You wouldn't expect a competent mechanic to service your car for free would you? Skills cost.
PPS More than happy to explain "how things work" on this pensions malarky, if anyone has any specific questions I can be of assistance with.
PPPS I've paid most of my mortgage off, definately a basket worth chuck an egg or two into.
>> Edited by Maf on Wednesday 4th September 00:13
"PS Not allowed to give financial advice, thats reserved to people who flog you policies & products, quite often without 2 o'levels to rub together. It is possible to find a good IFA, though difficult, and you have to pay for it. You wouldn't expect a competent mechanic to service your car for free would you? Skills cost. "
Careful Maf - at least one of us on here ( me obviously ) is an IFA - well qualified at that! It's okay though, I understand where you are coming from. Quite rightly you point out, you get what you pay for.
Careful Maf - at least one of us on here ( me obviously ) is an IFA - well qualified at that! It's okay though, I understand where you are coming from. Quite rightly you point out, you get what you pay for.
Before paying into a pension look into your family history - with mine I should get a dirt cheap pension - The record for a male in my family is 4 years after retirement, and that is really exceptional. What I'm trying to say is work out your odds - don't go sinking a shitload of cash into something you'll never use and can't leave to relatives.
P.S. Diamonds are among the best (read safest) investments, as they never loose value in the long term (short term fluctuations aside), and people will always love shiny things
P.S. Diamonds are among the best (read safest) investments, as they never loose value in the long term (short term fluctuations aside), and people will always love shiny things
I think the problem is that everyone's getting all het up about the market's current exhalation; it's really nothing new and any wisened hack in the securities trade will expound the virtue of taking a long, indeed, a very long (i.e. 20 year) view of (blue chip) investments.
Over which time, investments aren't at all bad but it really comes down to that old chestnut of personal utility/ net present value analysis versus cashflow and risk considerations.
And there's the rub with pensions; a basket of risks spread in different ways , exposing or protecting to varying degrees but never kid yourself it's anything other than a posh flutter. It HAS to be!
The broadest consensus would seem to suggest to me that generally speaking, bricks and mortar are the best starting point. But at the same time, whatever else you do, you really mustn't overlook the critical requirement in life that at one point or another MUST be adhered to; TVR ownership.
At which point, the accelerative thrust of any of Mr.Wheeler's latter creations will banish tedious notions of common sense and the future. All that matters is your next down change and if you're lucky, the next pop-pop-Bang on the over-run...
There is no answer, only speed.
Over which time, investments aren't at all bad but it really comes down to that old chestnut of personal utility/ net present value analysis versus cashflow and risk considerations.
And there's the rub with pensions; a basket of risks spread in different ways , exposing or protecting to varying degrees but never kid yourself it's anything other than a posh flutter. It HAS to be!
The broadest consensus would seem to suggest to me that generally speaking, bricks and mortar are the best starting point. But at the same time, whatever else you do, you really mustn't overlook the critical requirement in life that at one point or another MUST be adhered to; TVR ownership.
At which point, the accelerative thrust of any of Mr.Wheeler's latter creations will banish tedious notions of common sense and the future. All that matters is your next down change and if you're lucky, the next pop-pop-Bang on the over-run...
There is no answer, only speed.
My father paid into an Equitable Life (it isn't by the way) pension (amongst others) for 30 odd years. He's lost a great deal of money through those halfwits.
Pensions are a necessity imo but should not be relied upon in the short term. They are a posh flutter and can decrease as well as increase. The point I'm trying to make is pay that mortgage off and beat the system. Wealth not comes from how much you have but also how much you pay out and the mortgage (generally speaking) is your largest outgoing therefore your biggest drain on your resources. Remove that and you immediately gain.
If you can then build up a property portfolio (say 3 or more properties for example) over the lifetime of your working life (without over extending yourself) then you have the possibility to lead a very comfortable lifestyle in later life.
That's what I'm working towards. I want to have a minimum of 7 houses by the time I retire (30 in a month's time). Plus penions and the rest of it.
Pensions are good but pensions and property ownership is better!
Pensions are a necessity imo but should not be relied upon in the short term. They are a posh flutter and can decrease as well as increase. The point I'm trying to make is pay that mortgage off and beat the system. Wealth not comes from how much you have but also how much you pay out and the mortgage (generally speaking) is your largest outgoing therefore your biggest drain on your resources. Remove that and you immediately gain.
If you can then build up a property portfolio (say 3 or more properties for example) over the lifetime of your working life (without over extending yourself) then you have the possibility to lead a very comfortable lifestyle in later life.
That's what I'm working towards. I want to have a minimum of 7 houses by the time I retire (30 in a month's time). Plus penions and the rest of it.
Pensions are good but pensions and property ownership is better!
Re Buy to Let, always go for the fixed 6 month rental contract. If necessary it is easy to evict the tenant, they have no rights at all after the six months unless you offer them the chance to renew for a further 6 months. Both of my brothers and myself have UK properties let like this, never had a problem, or an empty property.
"Quick everyone buy property" smacks a bit of the late 80's to me... not that I'm saying its a bad thing as other financial conditions are somewhat different. However anyone today who has the Actual answer to what we should invest in for the next three decades is a very clever man, my best gain so far has been on classic cars.
As an aside, if I pay more into my Endowments (I know!) than required to meet the final morgage payment I assume i can use it as an investment vehicle and reap the rewards tax free..? anyone ?
Cheers
Matt.
>> Edited by M@H on Wednesday 4th September 12:26
As an aside, if I pay more into my Endowments (I know!) than required to meet the final morgage payment I assume i can use it as an investment vehicle and reap the rewards tax free..? anyone ?
Cheers
Matt.
>> Edited by M@H on Wednesday 4th September 12:26
quote:
"Quick everyone buy property" smacks a bit of the late 80's to me... not that I'm saying its a bad thing as other financial conditions are somewhat different. However anyone today who has the Actual answer to what we should invest in for the next three decades is a very clever man, my best gain so far has been on classic cars.
Quick everyone buy a property 7 years ago would be better, but I was in the classis car game for a couple of years, made loads more money out of houses and computers. I reckon PHers are better informed about a lot of money decisions than pension salesmen (how else do we afford £20k+ cars) so do we buy houses or classic cars (or £5k watches) as an investment ??
Because if I'm still working when I'm 55, I'm going to be really pissed off
Actually make that 35
Heres a question re pensions, since we're on the topic.
I have a pension policy which the provider decided to turn into a paid-up policy because on a review form I stated I was a company director. Funnily enough this is what it said on my application form 10 years earlier, but what the hell. Anyway, my question is what does that do to my "investment"? WOuld I be beter arguing the toss and start paying into the scheme again (especially as I am now a regular employee again), or do I just leav it as a paid up scheme?
Advice welcome (especially free advice
) - its all greek to me!
I have a pension policy which the provider decided to turn into a paid-up policy because on a review form I stated I was a company director. Funnily enough this is what it said on my application form 10 years earlier, but what the hell. Anyway, my question is what does that do to my "investment"? WOuld I be beter arguing the toss and start paying into the scheme again (especially as I am now a regular employee again), or do I just leav it as a paid up scheme?
Advice welcome (especially free advice
) - its all greek to me!Incorrigible - I (I technically mean 'we' as I'm going over to the darkside on 28th Sept = ie in 3 weeks!) have 1 property apiece at the moment, both with fairly low mortgage amounts on them Our aim is to keep both and pay off the mortgages on them and then start saving for the next deposit.
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