[Closed] Pensions - Very confused!

Hi, Does anyone know anything about pensions?

all you need to know:

1) every month, flush a few hundred quid down the bog.

2) work till you die. Then work some more, you idle ****ing communist.

I think I need to start a SIPP, although I'm confused to say the least.

who do not currently have a pension set up

From /www.gov.uk/workplace-pensions:-

A new law means that [b]every[/b] employer [b]must[/b] automatically enrol workers into a workplace pension scheme if they:

are aged between 22 and State Pension age
earn more than £10,000 a year
work in the UK
This is called ‘automatic enrolment’.

Other things you may need to know:

3) The person who sold you the pension has a much, much nicer car than you. And a holiday home in Provence.

Who's paying for that then?*

* clue: see ahwiles point 1

^^ what he said ^^ Although I think there needs to be 5 or more staff for the employee to provide a pension.

But not all companies have reached the auto enrolment staging dates. Worth asking when your current employer's staging date is as that'll give you an idea how long you have to wait for their scheme to exist.

haha! I'm very much of ahwiles thinking and that's why I'm still renting at 31 and only just setting up pensions, ISAs etc.

My employer told me he'll set it up in 2016, but he's off work at the moment so I can't press him about it.

A colleague's just retired six years earlier than planned because he paid into a pension and invested a bit each month into Isa's, when things started turning a bit cack at work he was in the enviable position of being able to just give them the V's and he now spends all day on his bike, I'm no financial advisor, but there's tax breaks for putting money into pensions and if your company's paying money in too, then that's free money (sort of)! Afaik it's not a good idea to take money from one pension and move into another when you leave an employer, I've had 3 companies I've worked for and three different pension pots (actually 4, cos I took out a stakeholder pension when they came out about 16 yrs ago). If I was you, I'd leave the old pension alone and take out a new one, the stakeholder pension was quite good because of the tax relief, I paid in £230 a month and tax relief took it up to £300 and you could have one alongside any company pension. Get some advice from someone who knows what they're talking about tho', don't rely on advice from a mountain bike website forum!!

Don't ask for financial advice on STW, ask a financial adviser!
We have a pensions, debt and housing crisis in the UK which is going to leave quite a few people in really serious trouble when they retire because they
a) bought more shiny stuff than they had enough salary to buy
b) paid more for their house than was sensible
c) decided a and b were more important than not starving when retired and spent all their cash when young and have put nothing aside for retirement...

Humans are like this, they tend to try and avoid short term loss even if it means long term gain.

Get some financial advice and get paying into a pension, it's way more important than shiny things today. You get 20% of your contribution added in as tax relief straight off, let alone any long term investment gain. A mix of asset classes is normally sensible and for God's sake don't get into Buy To Let unless you want to lose the lot...

My wife works in pensions......and if you want it in lay end terms

Unless your in a final salary scheme .....then your better off putting your money in a savings account..why

Because when you do evently draw your pension ...you get taxed on it.......

Pensions don't need to be taxing... SIPPs are simple enough

http://www.telegraph.co.uk/finance/investor/11470633/Telegraph-Investor-SIPPs-overview.html

http://www.telegraph.co.uk/finance/personalfinance/investing/sipps/10607824/DIY-pensions-The-cheapest-Sipp-fund-supermarkets.html

I'm with II, was with HL, no-one's making much money out of me.

Hardly any final salary schemes now, I work for local authority, still perhaps one of the best out there, it's career average now though.

Only enroled 2 yrs ago, when I moved up from being a trainee, but doubt there's another 5 years in the job. God knows what 7 years worth of LA pension at circa £30k average will be worth in 40 years time?!? 😕

God knows what 7 years worth of LA pension at circa £30k average will be worth in 40 years time?!?

More than the remaining 23 years put together!

I don't follow, apologies, 6 days of migraine, and now, cider....

Because when you do evently draw your pension ...you get taxed on it.......

Which is fine as your contributions aren't, so you only get taxed once. If you pay into an ISA the money comes from net pay, so you've already been taxed on it.

Unless your in a final salary scheme .....then your better off putting your money in a savings account..why

Because when you do evently draw your pension ...you get taxed on it.......

Bad advice 🙂

your better off putting your money in a savings account..why

Because when you do evently draw your pension ...you get taxed on it.......

You'll get taxed on savings a/c interest too though.

SIPPs for the win!

You'll get taxed on savings a/c interest too though

Unless it's in an ISA....

True...ISAs and SIPPs for the win!

For now I would just save in an ISA if they are going to start a pension scheme.

If they do start one there is a good chance it will be a good investment. As your previous one, they matched your contribution. That is a far better return that you would find in an investment or savings account!

https://www.moneyadviceservice.org.uk/en/categories/pensions-and-retirement

http://www.moneysavingexpert.com/savings/?tab=sect29

Might be worthwhile links

Thanks for the advice, think I'm going to go for Virgins SIPP, until my company offer a pension then perhaps change.

Do I have to get my employer to pay into the SIPP at the point I get my salary to get the tax relief as otherwise I've already paid income tax?

I'm going to start a help to buy ISA in December as it suits me better than the current offerings.

Cheers

Never ask for pension advice on here, because you get the same old claptrap regurgitated as advice like

1) every month, flush a few hundred quid down the bog.

When a pension is simply a tax favourable saving scheme. How to make it work best for you takes some effort, but it isn't that complicated.

Get proper advice. It'll be worth it in the long run. My Pension pot is worth 4 times what I have contributed. How can that be a bad thing?

Virgin don't sell a SIPP do they ? I can only see a Stakeholder pension offering.

'and for God's sake don't get into Buy To Let unless you want to lose the lot...'

explain please.

Never ask for pension advice on here, because you get the same old claptrap regurgitated as advice like

Well you get some good advice!

Do I have to get my employer to pay into the SIPP at the point I get my salary to get the tax relief as otherwise I've already paid income tax?

Your SIPP provider will claim the lower rate tax and add it to your SIPP - takes a few weeks. Higher rate tax payers can claim the rest on the their tax return.

[i]'and for God's sake don't get into Buy To Let unless you want to lose the lot...'

explain please. [/i]

Expect the usual answer of govt going to kill anyone with buy to let properties, etc. Same old shite people have been spouting for years. As a sole source of future income then BTL isn't the way to go but as part of an investment portfolio then it does work well.

I have 3 BTL's around the country that make a good monthly return, the profit from them goes into my pension pot - win, win.

i assumed that the statement was in relation to having BtL's rather than a pension. i too have BtL's, but these are to supplement my pension (or other investments, for that matter).

'and for God's sake don't get into Buy To Let unless you want to lose the lot...'

explain please

It means putting all your investment into a single asset class (very, very bad investment practice) one which in the UK and globally has a repeat pattern of boom and bust. UK market is currently hugely distorted beyond all historical measures of value (esp wages) by massive foreign inflows, excessive speculation by inexperienced investors and emergency low interest rates leading to excessive lending.
All these factors will change at some point over the term of your investment. That UK government are after every source of tax they can get to pay off our monstrous debt is only one factor to consider...

Fashionable 'get rich quick' schemes never work long term - this quick history is well worth a read:

[url= http://www.investopedia.com/features/crashes/ ]The anatomy of market crashes[/url]

A balanced portfolio of numerous asset classes which you can invest in with low fees is boring as hell but much less exposed to risk and changes in government policy
e.g. a combination of cash, gilts, bonds, equities (low-cost index tracker generally produce a better return than managed funds). Wrap the lot in a pension and you get the tax benefits too.

BTL is made more risky if includes a mortgage - gearing means you could be wiped out with a fall in property prices. Thing is we are also likely to own our own property so adding BTL property to the value of our own means massive exposure to property prices. I have a fair chunk invested in unit trusts both in a SIPP and in ISAs but is smaller than the value of the house I live in. I can't see me ever owning a BTL place - this is also partly as I think BTL is bad for society though.

ScottChegg - Member

How can that be a bad thing?

our OP, 'tails' is 31.

he'll be 70 before he can access his pension, if 40 years of sedentary desk jobs don't kill him before then...

the idea of a long and happy retirement, playing golf, hooning around in classic cars, jetting off to Tuscan winter retreats, is a day-dream that will die with the baby-boomers.

(now that the 'boomers' have been [s]bribed[/s] allowed direct access to their pensions, we can expect the pension black-holes to open even wider, and btl investment hoover up all the remaining houses that aren't already owned by ****ing landlords)

it's been a brilliant play though. The money being taken out now to buy flats and houses is the money being paid in by people who haven't yet retired. The rest of us, decades from 'retirement' are the ones expected to put money into a scheme that will enable the boomers to finally and completely price us out of the property market. We're paying for them to buy the houses on which they'll charge us rent. It's not enough to dry-bum us once, they have to do it twice.

Unless your in a final salary scheme .....then your better off putting your money in a savings account..why

Because when you do evently draw your pension ...you get taxed on it.....

Whereas in a savings scheme it's taxed before it goes in.

All this thread shows is that most people know f-all about pensions. A pension is an undeniably good thing, if you take the time to understand it. It may seem complicated but it really isn't - if your average IFA can figure it out then almost anyone can. So don't bother dealing with an IFA, don't listen to the moronic bleating of the nay-sayers on here, do a modicum of research and stick it in a low-cost SIPP.

Agreed. But it's easier to shout 'bogeyman' than find out what it actually means.

The rest of us, decades from 'retirement' are the ones expected to put money into a scheme that will enable the boomers to finally and completely price us out of the property market

What a load of self indulgent twaddle.

I'm decades from retirement, doesn't mean I haven't got a plan in place. Might be utopia; might not, but at least I'm taking responsibilty for my future rather than blaming everyone else, in advance.

good for you.

The current better off NI payers are paying for the older generation and it's not unlikely they'll not benefit themselves as there won't be enough money in the pot by that time. So they need their own pensions to pay for their retirement or risk having to downsize their property or whatever - which might be a valid approach to retirement planning for some.

Pensions are just a wrapper around an investment with massive tax uplifts. 20% overnight thanks very much. When you pay into a pension you are paying the future you, look after it.

Whatever you do, don't go to Cheekygets wife for advice

Or broess 😉

OP, SIPP are the most flexible although you don't need one of those to what you want. You can transfer your Royal Lomdon pension into one into which you can continue to pay into. Royal London may even be able to offer you an in-house transfer,mask them. There may be charges to make this transfer especially to another provider. Savi g for your retirement is a sensible thing to do, who knows what the state pension and retirement age will be by the time you retire. Best to have your own pot

Don't forget about hidden charges to having a pension!!!!!
http://www.thisismoney.co.uk/money/pensions/article-2566646/What-hidden-pension-charges-paying.html

I think in theory having a pension is a good idea......but the problem is we are all living too long now.
Back when pensions were first invented.....it was just a matter of getting your life in order before you pop your clogs.....most people didn't live past a couple of years into retirement back then...if they made it at all

So in all the best time to retire was the last 20years.....when we all retire.....if we ever do....how much would we need yearly??....I bet10 grand won't get you **** all

If your employer is prepared to match or add to your contributions then it is by far the best investment you can make. If your employer matches your contribution of say £200 gross per month then that is £400 going into your pension pot. Remove your 20% tax relief and you are getting £400 for £180 net contribution.
Leaving aside charges and even assuming a trivial amount of growth you would have to be mad not to see that as a good deal (it will likely include other benefits such as insurance etc)

For those saying pensions are rubbish can you tell me an investment that can match that?

I have a mix of pensions and ISA's to shield some of income later from the tax man but my pensions have all performed pretty well over the long term.

I (was incredibly lucky) had 10 yrs of a final salary scheme and when I get the statements I have to pinch myself when I look at what I will receive! I wont be well off but it is a significant amount based on what I put in etc.

In summary ignore the doom mongers and investigate for yourself.

I pay into our company defined benefits scheme.
I put in 5% and the company match it, if/when I get another promotion they'll put in 8%.

I know nothing about pensions, but know that when retirement comes, I will have only contributed at most 50% to 'the pot'
So even after all the fees/expenses/etc, it will have to have performed pretty badly as an investment over 30+ years for me to have lost the 50% my employer puts in, and have started eating into 'my half'

(basically what Surfer says above)

I was a late starter to this pension thing - I didn't start paying in until I was 34 (42 now) but having discussed this subject at a recent school reunion, it became obvious that quite a lot of my piers have no provision in place at all, So I guess what I'm doing will be better than whatever they end up with.

I will have contributed at most 50% to 'the pot'

If you are on the basic rate of tax for each £100 that goes in you will have contributed £40. If you are on 40% tax then that £100 going in will have cost you £30

If you are on the basic rate of tax for each £100 that goes in you will have contributed £40. If you are on 40% tax then that £100 going in will have cost you £30

Just tipped over the 40% bracket in the last year or so - your figures prove my (and your) point - my current set up is a no-brainer.

a lot of my piers have no provision in place at all

Nothing worse than a pier without provision:

[img] [/img]

^^ Slow news day Mudshark?

I'm an Engineer - Spelling has never been my strongpoint!

the right pension is good.

the wrong pension is bad

employer contribution ones are hard to beat independently unless your some sort of stocks and shares wizard.

ours is salary sacrifice and for every 6% i put in they put in 10% - i get tax relief and national insurance relief on the portion sacrificed.

Been doing it since i was 23.

the 2 parts i like about my pension are - 1 it defaults to pay my wife - not all do , some only a percentage - some none at all.... and 2. its locked away until i choose to retire - so the wonders of an albe it low compound interest work their magic - so it cannot be used for a new car or a bigger house when we are young and wreckless.

http://www.thisismoney.co.uk/money/saving/article-1686704/The-amazing-power-of-compound-interest.html

a good laymens article on compound interest.

^^ Slow news day Mudshark?

It made me smile - love a bad pun 🙂