UKC

Ive just had my twice yearly catch up with my financial chappy and to say he's the harbinger of doom is an understatement. Im now 40, just, and have been paying into a pension for about 12 years in one form or another. Certainly not at the lower end of the spectrum but by no means Trump-esk.

If I want to retire at 65 with a sensible yet modest income the numbers he has given me which need to be saved per year are eye watering. If I want to retire at 60, forget it.

This is a cry to all of you. Please, please, please get some good advice and quickly and for those of more tender years, start now.

(this was a free public announcement for all ostrich's, do not bury your head and hope all will be well)

In reply to TheDrunkenBakers:

I appreciate the sentiment, but you could shove all your income into a pension yet a change in the rules could mean you lose out.

In reply to TheDrunkenBakers:

I'm lucky enough to still have a final salary pension.☺

In reply to TheDrunkenBakers:

I married a woman 12 years younger than me with a good career. Thats my pension plan sorted

In reply to TheDrunkenBakers:
I found this story on the BBC website yesterday
http://www.bbc.co.uk/news/business-35339475
It makes interesting reading. Here are a couple of key points.

The richest 1% now has as much wealth as the rest of the world combined, according to Oxfam.
Oxfam also calculated that the richest 62 people in the world had as much wealth as the poorest half of the global population.

Is this a fair distribution of wealth?

In reply to arch:


I've dropped out of two of them, due to the shite that they entailed i.e. the jobs...

In reply to Ridge:


It's probably more likely that tax relief on contributions will change. The taxation of existing pension funds is becoming more flexible. Therefore, ideally, it's best to fund them as much as possible now, before tax relief on contributions completely disappears.

What other investment gets an immediate 20% + bounce ?

In reply to TheDrunkenBakers:

One of the problems is that pensions are given a mystique by Advisors when if fact they are just a pot of money you pay into so that when you retire you can take from it. If you expect to live for 20 years after retiring and you expect to work for 40 years then you have to save half your salary to have the same in retirement. Or save a quarter for a pension of half the salary. Said like this its just too scary, particularly when you already have 2 other pots on the go called Buy a House and Start a Family. Of course it sounded better 50 years ago when you only lived for 10 years after retiring and worked for 50 years before and were grateful for a pension of 50% so that 10% of your salary did the trick.

So the Financial Industry and Governments came out with voodoo magic of unrealistic growth rates and hidden charges and hey presto. Except that inflation hid the problem over the last 40 years by making it easier for a generation to build equity in their houses, and final salary schemes made the payout far greater than the input with the shortfall supported by Mr Ponzi.

Seems to me that with pensions as with medical and social care, there are an awful lot of chickens that have been let out to roam over the past 40 years now looking for a place to stay. The politicians know it and dare not do anything since we will kick them out if they do, we know it and just hope that if we keep our collective head in the sand it will go away. The trouble is the pain doesn't come to everyone at once, if it did it would get sorted. So whilst it only affects a minority of the electorate the situation continues.

In reply to arch:


Would check that, think they've all been replaced by CARE schemes, not going to go into how shafted we were at the change over.

In reply to arch:

You may want to read the recent article in this Saturday Financial Times which says that very soon the total pension allowance for tax purposes will be reduced from 1.25 million to 1 million, and that anything over 1 million will be taxed at 55%.
Apparently this could affect a lot of public workers like the police and those in education. I cannot remember what you need to do to work out if you are going to be affected, but I seem to remember that it involved multiplying your defined benefits(DBs) by 20. Then a further computation.

(By the way, I have nothing like a pot of even half the limit)

In reply to Removed User:


You have completely the wrong end of the stick; you should have married someone 20 years older with a good pension and spousal benefits!

In reply to m0unt41n:


Except that this isn't true either as it makes the huge (and historically incorrect) assumption that inflation and interest on your savings are equal as well as assuming that your living costs will be the same (which they almost certainly won't be with, typically, no children to pay for).

Actually, given our current economic system, any investment in a pension can reasonably be expected to be worth exponentially more than the capital amount that you save, with the a correlation between time 'saved' and the amount of gain.

The 'problem' today, in simple terms, is that people aren't seeing pension saving as a priority and therefore don't start until later in their lives than our parents generation which means the time for the savings to increase in value is shorter leading to reduced pension income.

Coupled with this is the fact, as you allude to, that owning a property is also becoming something that people do later in life so the pension 'top up' (in simple terms) of house selling / downsizing / reduced living costs is also reducing.

A complicated issue, compounded by the intricate ways in which all these types of financial instruments are interlinked, for example, pension pots provide a lot of capital for mortgages, means that it's not as simple as the maths you state in your post, nor the politics needed to amend it.

A blunt, and politically unpopular, argument would be that, if you live longer then you need to work longer. 60, or 65, as a retirement age is entirely arbitrary. Pensions, as they exist today, have only been around for 100 years or so and there's no reason why they should remain fixed in the timescales of 100 years ago.

In reply to TheDrunkenBakers:

I binned mine 20 some years ago, my provider drove a very expensive car, wore very expensive suits and a very expensive watch and seems to get his fee regardless of what my fund was doing (bugger all at the time)
So I have my own provision. My business is my pension fund, if it works I will be okay, if it doesn't work I will be screwed.
Pretty much exactly the same as having a pension except it relies on me making the correct long term decisions and investments rather than a guy who is living very well off the fees we all pay making decisions based on short term get rich quick investments.

I know it's not as simple as that but I have seen too many people being screwed by their pensions

In reply to keith-ratcliffe:





Yawn! Yet another reason to dislike Oxfam. I wonder if they'd be happy to explain why they pay there CEO 600 times more per year than poor africans earn. Come to think of it its 5 times what the average person in the Uk earns.

In reply to Hyphin:


Still some final salary schemes kicking about, but not many. Just sneaked into mine about seven years ago, but doubt it will still be going when I retire.

In reply to TheDrunkenBakers:
I'm a member of the Electricity Supply Pension Scheme. We can retire at 60, assuming you can manage on the pension. I wont be fully paid up until I'm 63.

25% of your pot tax free and 2/3 (Roughly) of your final salary in a pension. Or a proportion less if you go early.


I'd go now if I could.........


Edit: Along with a lot of others too.

In reply to TheDrunkenBakers:

Consume less now, overpay the mortgage, change careers to a less stressful part time job in your 50's, don't keep up with the Jones, make sure children know they will need to be independent by the time you are in your mid fifties.

In reply to keith-ratcliffe:

>




You have missed out a key point that to be in the wealthiest 1% in the world (know that is a different 1% ) you "only" need £533, 000 thats a retired teacher in a big terraced house in sheff (house +pension) and 'only' £48, 300 to be in the top 10% wealthiest in world, thats someone with a run down mortgage free house in burnley on benefits.
So yes there is huge disparity in wealth, but it is more than likely that you are one of the wealthy in global terms.

In reply to Dax H:



>

I hope you are Limited, I have heard the revenue loves investigating retiring Sole Traders.

In reply to veteye:

This was announced almost a year ago and is exactly the point others are making regarding retrospective taxation.

When I started work I listened to advice and made strenuous efforts to fund a pension early. I continued to do so, but when life limit was brought in and then successively reduced, I am screwed over by decisions made years ago that were directly in line with what governments of the time wanted. Effectively the prudent are being punished.

That said, I can't see state pensions remaining universal. It's one of the last big untapped sources for any chancellor to balance his (when will we get more women in these roles) books.

In reply to TheDrunkenBakers:
I was fortunate enough to learn that to earn roughly 2/3 salary at retirement (apparently) you need to save as a percentage of your pay, half the age you started saving. So if you save from the age of 40 you need to put away 20% of your income. Have you factored in any inheritance you might receive?

We have just started that all-in-it-together pension thing that the government has imposed. I am now saving £20 a month. It is a joke! Thankfully, I am putting into a different pension pot at a much more higher level. Still not enough though

PS - My retirement age is currently 68. I expect that to go up before I retire.

In reply to Phil1919:

And pray to God that you don't get hit by a bus at 64.

In reply to Edradour:



>

Spot on.

It's very simple. You need to save a LOT more than you think you should which means sacrifices NOW.

Most people don't because when you are younger your priorities are different and old age seems a long way off.

This means that you either have to carry on working longer or accept a much reduced standard of living when you reach retirement age. And the situation is getting steadily worse.

Be aware THEY (who most people naively believe will bail them out when old age comes) actually don't exist. Your future is firmly in your own hands NOW.

Talking glibly about "knowing" lots of people who have been screwed by pensions plans is no reason to just cop out, it means learn from their experience and invest in a spread of pension schemes. As the OP says don't be an ostrich because the problem seems insurmountable.

In reply to Phil1919:

I think that you have a simple view of what life is likely to be in your 50's. My son is somewhat independent,but he lives in a house that is owned by my ex-wife(who lives in her partner's house) yet I don't think that he pays much rent(he's 26). My daughter is at university and will need to be financially helped for another 18 months. Then she has to get a job, and fewer graduates are finding that easy. So what happens if she does not? Or if she does a post-graduate qualification? I'm in my 50's.
Your sentiments are sensible I agree,but practicality does not allow all their aims in an easy way.

In reply to Reggie Perrin:



I appreciate your sentiments and one does need to read the full report and understand the figures to make a proper assessment. You are fully correct in that to be in the top 1% you dont have to be, by UK (or at least nice suburban city area) standards that wealthy. My beef, and Im fully supportive of people enjoyng the spoils of their efforts, is that the top 62 have such a grotesque amount of wealth. They could each keep, say, £1billion, give the rest away to well run and managed charities and make such a difference.

Anyway, back on thread, get a pension

In reply to Edradour:


yeah, many savers are worse off at the moment.


Nope, there are many people who cashed in the pension who got a very poor payout because of the markets dropped and they are now trapped on a naff annuity. Others in the 65-70 bracket can't afford to retire because their pension haven't boomed like you said.


I would agree there, I started late at 24/25 investing properly, so I wasted a good few years, but some people don't wake up until they are 35 or so. I can't see the UK culture changing so investing in brewery shares would seem prudent.


I would argue that if you want to live comfortably in your 70s, then live more modestly in your 20s. It is an education thing.

In reply to TheDrunkenBakers:

I assume your financial adviser is taking 2 or 3 per cent of your pension fund every year for the benefit of his 'advice'. Get rid of him. The money adds up over the years - you have 27 or so years to go until retirement, 27 x 2% is a huge amount of money.

If you haven't done so already set up a self invested pension plan (SIPP). Invest your money in good quality investment funds such as https://woodfordfunds.com/our-funds/weif/ and https://www.fundsmith.co.uk/ . These funds will sometimes go down in value, but over the years they will outperform most other forms of saving. Do not touch with a bargepole any investment product offered by a high street bank.

In reply to Phil1919:

Yes to all of that.

Also diversify your investment to protect against tax changes, pension pot, property, some gold jewellery, antiques, a painting etc.. but only invest in what you understand, don't be conned into the many schemes, if it sounds too good to be true, then it probably is.

In reply to TheDrunkenBakers:
>


Agree, there is a superb book, The Wealthiest Man in Babylon and it should be compulsory study at school. https://en.wikipedia.org/wiki/The_Richest_Man_in_Babylon_(book)

In reply to Edradour:



I agree that if interest rates are greater than inflation then it is not simple. Unfortunately the Financial Services Industry also realised this and decided to make life easy for us all by introducing hidden charges and commissions that brought it all back down to being simple.

I can't think of another section of society that is so regularly been fined and wholly condemned for ripping off everyone else, other than maybe the Kray Twins, but at least they had a couple of movies made about them.

In reply to John2:

You pay for what you get.There are very good financial advisers. Too often people are hoodwinked into going with financial advisers as there are no fees. Yet in reality they are just tied agents or reps of one finacial company selling their own products. You have to do your homework about who is good/poor. If you find a good one who gives solid advice, they are worth their weight in gold and you will want to pay them more than 2 or 3 per cent.

SIPPs are only good if the advice you got says that SIPPs are useful for you.It does not mean they are right for everyone.

In reply to m0unt41n:
You are legally entitled to ask for all details of commission and charges. its upto you to find this out.

As regards the ripping off, it is one of the arguments for going with a really big name, so if they cock it up you know you will get your money.

In reply to neilh:


Which is why I mentioned the Kray Twins since they would also have plenty of resources with which to compensate their customers.

In reply to m0unt41n:

The mafia is a better comparison. It is an unbelievably regulated sector, and yet they still mess it up.You have to have your eyes wide open and not be gullible.

In reply to TheDrunkenBakers:

I sympathise with my students when I ask them about pensions. They are bewildered with confusing financial messages which contibutes to most being underprepared for planned saving and too accepting of debt. The UK has a personal debt crisis, an out-of-control housing market (due to decades of under-investment in building), too many younger adults with no financial planning for old age, and formal pensions schemes have declined in quality as an investment (with decades of even our government adding to the causes... to raise tax and reduce short term liabilities in some areas that will cause larger future costs in others). Rather dangerously, low levels of provision currently look counter productive in retirement (there is a state safety net for those with nothing but above this care costs will sap any smaller savings pots quickly).

I think its helpful to say that a "pension" is any investment that will ensure as comfortable an old age as can be afforded. This could be lots of things other than formal pension schemes, including a house, a business, savings (and avoiding debt), family or community support. Its also wise not to put all the eggs in one basket.

In reply to Offwidth:

Its always been the same on it being confusing.There are just as many older people who have been unprepared.

Your conclusion about not putting all your eggs in one basket is spot on. Best to assume that one of those will break.

You do have to be reasonably financially literate and savvy to figure it out.

In reply to neilh:

'You pay for what you get'.

If financial advisers took their fees as a percentage of the profits made by the investments that they recommend then there would be some justification in saying this. But 2 or 3 per cent of an pension fund compounded over 25 years is a huge sum of money, and the fee is usually taken whether or not the fund has gone up. Better to do some basic research and take responsibility for your own future.

In reply to neilh:
I'm not so sure and in any case confusion is more of an issue when your options are getting limited. From a working class background: I left University with a lucrative STEM degree plenty of job experience and some savings. I purchased a house during my PhD. I have 30+ years as an academic on a good pension (mostly final salary... but despite all the fuss about these being unaffordable its no so different to returns from good investment fund of the time if it had included the same employers contributions and tax protection), have paid my mortgage, have other investments and supportive family and friends who can afford to help me if I get in trouble. If I was 30 years younger things would be a lot bleaker...student debt (which I wouldn't have accepted: I'd either have got sponsored or gone abroad)... my academic job arguably a bad choice due to changes in the overall pay and conditions.. housing much more unaffordable ... most work based pensions schemes much worse value... much reduced ability to afford independant investment.

In reply to veteye:

I don't think a 4 line answer can fully solve all individual cases.

In reply to TheDrunkenBakers:

Working for myself I don't have any significant pension and I'm not paying into one now either (I'm 31).

However, what I have done is buy a couple of houses with I have rented out, and I plan to buy another later this year.

£10-15k deposit on each, let someone else pay the mortgages for the next 20 years (plus a bit of over payment when I can) and by the time I'm 50 I'll have an income I can live on plus I've still got the full assert value of the property which I can do with as I wish.

Seems better than most pension plans to me.

In reply to Hyphin:


Ditto

Mine was Final salary in name only for the last 10 years, the company took some kind of holiday from it and changed the goal posts when times were good, and I then later found that my pensionable salary is 10K LESS than my actual salary, and then they closed it altogether, and made us join another crap scheme that I pay more in to get even less than before out !

I am 56 when I was 40 I thought I might be able to retire at 60 and be comfortable.

However, I am mortgage free, and if I can kick out the last of 3 daughters before then, and sell my house for a tiny wee place that my wife will accept, I might get a bit of free cash that way.

In reply to Lord_ash2000:




Have you seen the changes in buy to let tax relief that are coming in by 2020? And the new 3% stamp duty on buy to let property. I think property used to be a really safe pension plan but it is becoming so hard for them to be a cost free investment (until the mortgage is paid off) that I think their heyday has passed.

As someone above has said, what you're after is diversity, some property, some pension (tax benefits on this type of saving are good), some stocks and bonds, some cash.

In reply to Lord_ash2000:




If these houses are second or buy-to-let homes then wont any asset appreciation accrued should yu sell up to release the fund be liable to capital gains?

In reply to Lord_ash2000:

by the time I'm 50 I'll have an income I can live on plus I've still got the full asset value of the property which I can do with as I wish.

You can't of course have the income to live on AND have the full asset value to do with as you wish, if you sell to realise the cash. And of course, when you need to sell the market can be crap, we had a chap who bought locally at 400K and got caught with the last house price crash, and failed to sell it at 100K less .

In reply to TheDrunkenBakers:

There are fabulous deals in waiving capital gains if for the property you are now renting you had previously lived in it for a good few years. This may go soon (haven't checked the latest details).

In reply to neilh:

I always wonder If they are so good , why have they not already made their fortune and retired ?

(edit I was just recently advised to put my money into a Dollar Account . (Not a regulated Financial Advisor)

In reply to summo:


There are always going to be fluctuations but, as I said in my post, you can reasonably expect pension type savings (i.e ones not kept in cash) to increase in value over time.

Many annuities were poor but you no longer have to buy them and much more freedom around how you spend your saved pension money on retirement.

In reply to John2:

Do you know the cost of training a competent finacial adviser. It is not cheap.The cost of all those exams and they are regularly retested.The days of any person doing that work have long gone

It does of course raise the brarrier to entry to get top quality advise. Which is one of the big problems.

By the way I am not in the financial servies industry.

In reply to Offwidth:

The options now are just different.We can debate this one forever. Its being financially savvy that helps more than anything.

In reply to Jim C:

I have met both bad and good ones, granted the good ones are more difficult to find...

Good scam that( an FX dealer I suppose,that is possibly the next big scandal)

In reply to summo:

I would agree there, I started late at 24/25 investing properly, so I wasted a good few years, but some people don't wake up until they are 35 or so. I can't see the UK culture changing so investing in brewery shares would seem prudent.

I started at 21 and was paying into the same 'Final Salary' Scheme for the next 35 years, and when I recently asked how much I would get if I retired now (aged 56 ) I was very disappointed to say the least.
Likewise the option for retiring 60 and then 65, better, but not good, and certainly not great, despite joining the very first day I could.

I just can't imagine how crap the new schemes are for the youngsters you better hope you live to 100 so you can work to 80.

In reply to Indy:


What a ridiculous statement.

'Poor Africans'? Seriously? Putting aside the fact that Africa has 54 countries with a huge diversity of personal wealth including, in many countries, a rapidly expanding middle class, why would a UK based company pay in line with the wages of 'Africa'. Do you earn more than these 'poor Africans'? I'm willing to bet that you do but obviously don't apply the same conditions to yourself because you're not working in the charity sector.

Secondly, Oxfam is a £300 million a year business. Do you not think that the CEO's role is pretty bloody difficult and stressful and that, just maybe, it's necessary to pay someone quite a bit of money to get it done properly. That having decent wages might attract someone who actually knows what they're doing (see Kids Company for the opposite result) Are you seriously arguing that because he works for a charity he should be paid £25k a year to run a £300 million business? Utterly fatuous.

In reply to Reggie Perrin:


Yes Limited but the revenue don't worry me. We were audited a few years ago as part of an investigation on a company that I supplied some goods and labour to and they also supply different goods to me.
The result of the audit was that I am squeaky clean.
Other than the time and disruption whilst they are doing the audit there is nothing to worry about the hmrc knocking on the door if you have nothing to hide.

In reply to ByEek:


Why is it a joke? All auto-enrolment does is force people (and their employers plus the government, in the form of tax relief) to pay into a personal pension and, by 2021, you'll be saving 10% of your salary in a pension unless you opt out. Surely this is a good thing if people aren't currently saving for retirement?

There are lots of schemes that are auto-enrolment compliant so plenty of options for where your money is invested, I really can't see how this is a joke in any way. Pretty great government policy if you ask me.

In reply to Jim C:

Better than no penion at all. All of us living alot longer has knocked on the head the possibility of us finishing early. These medical improvements have had a downside......maybe we would get a better pension if we signed up for euthanaisa at 75.

In reply to Edradour:

Whats it worth? For a lot of mimum wage / low wage workers it will amount another tax because it will be worth absolutey nothing when they retire. I got auto enrolled into one via a second employer...ridiculous.

D

In reply to Dauphin:


Why will it be worth nothing?

It's not a tax either. As identified in this thread, people aren't saving for their retirement which, in simple terms, is likely to lead to an increased financial burden on the state in the future. Therefore, the government has introduced a policy to make people save a proportion of their money for their retirement. It's still your money, if you die early then it will be given to your next of kin.

In reply to John2:


I've often thought that this would be a much better system, potentially for both parties, as it would incentivise FA's and fund managers to maximise profits. Goes anyone know of an investment opportunity that actually works this way?

I'm currently invested partly in a managed fund offered by a high street bank. They take a percentage of the investment each year regardless of performance. I tried a couple of financial advisers but all they were interested in was selling similar products they presumably took a commission on.

By the way, I'm not relying on this investment for my pension. I'm already retired on a final salary deal - very fortunate I know. This is cash inherited from my parents a few years ago.

Martin

In reply to Dauphin:


It will be worth a lot more than the pension they would have if they were given free choice. I think better tax incentives for employers to top up pensions are essential. But also education at school level. This weekend the pubs & clubs will be full of youths spending £100-200 over a weekend on nothing. Then at sunday lunch time there will be old men chewing the fat about how their pension is barely covering the essentials. It's just a matter of narrowing those two schools of thought a little. Flash car with expensive insurance, trip to Ibiza clubbing, or put aside for your future etc..

In reply to Martin Hore:

The closest product to that system that I know of is this one https://woodfordfunds.com/our-funds/wpct/fees/ . It's specifically marketed as a long-term investment, to be held for at least 5 years.

In reply to Jim C:

I've always tried to manage my own funds, I start with PEPs did ok, but then the company (morgan Grenfell) was found to be mismanaging and I got compensation as it should be been doing even better. Since then I've avoid managed funds, as you are often paying 1 or 2% a year of your pot for the 'manager' to do very little at all. Buying a house at 25 with my brother to rent out, was the turning point. Once committed to a mortgage you tend to view your lifestyle a bit more critically and assess each purchase. 20 years on I'm one third retired and look to increase that proportion ever decade or less. I'm quite happy to live a conservative lifestyle with lots of free time, than flog away until I'm in my 60s. The key is how to educate my kids so they start planning even earlier.

In reply to Edradour:

I'm aware of the tax changes and stamp duty changes, stamp duty isn't a problem unless I'm buying more, and to be honest for the investment properties I'd be buying, firstly it won't amount to much and secondly any loss from tax is likely to be balanced out with a lower asking price. The tax changes regarding offsetting interest are a frustration, but my yields are high enough that I can weather it.

Of course property values go up and down over the years, but if you've no plan on selling then it doesn't really matter, and if in 20-30 years time for whatever reason I wish to sell up then I highly doubt they'll be worth less than they are now and even if they are then as long as its more that I've invested (i.e. the deposit) then I'm still doing pretty well out of it.


Sound advice diversity is of course always the best way to offset risk, don't want all your eggs in one basket and all that But I still personally think that looking ahead long term if you had to pick one investment property is the way to go. Tax and interest rates etc change over time but ultimately there is only so much land and a growing population so I'm not too worried.

In reply to Edradour:


of course there is 'usually' an upward creep, but profit relies on being able to exit a time of your choosing. Many endowment policies failed for this very reason. Pension wise, a good provider will convert your fund to a low risk cash basis, nearer your planned retirement rather risk being at the mercy of the markets etc.. not all funds are well managed though.


Yes, with taxation limitations and some companies have issued limitations on their policy holders too. It's not total freedom, limited freedom.

In reply to Lord_ash2000:




of course and you will always need a roof over your own head, so it is rarely going to be a poor choice. Granted the government is determined to hammer small landlords now (whilst those with 14 or more properties are left alone), so letting out a single house is about to get much more expensive, not good for the tenants IMHO.

In reply to neilh:
The assumptions made on longevity were optimistic before and likely pessimistic now. Kids today are on average less healthy with massive increases in illness like diabetes (where most will die young). The baby boom generation did appear to have a pension windfall but things have gone too far the other way now: the assumptions used in calculations for some pension deficits are plain mad (significant average wage growth for particular pay grades consistently above inflation in the public sector?.. growth estimates linked to post crash austerity distorted gilt yeilds). It good to see the back of forced annuities and more pressure on unjustified percentage fees for poorly managed funds but most pension news looks bad for the next decade looks bad to me. On top of all the increasing personal and housing debt, if you see this as the same as what I faced on graduating I'm surprised: financial savvy has gone from being a bonus to pretty much essential.

In reply to TheDrunkenBakers:
I'm in a Local Government scheme that has been gradually eroded over the years and is likely to be seen as an easy target in the future. It is still defined benefit, but has gone from final salary to average earnings. Generally speaking I'm paying more for less in comparison with when I entered the scheme 15 years ago. Girlfriend in a similar situation with an NHS pension.

We own (mortgaged) a fairly modest second property and rent that out. This has some impact on our available cash now, but in the future should provide a steady additional income or a capital injection if required.

In reply to Martin Hore:

Managed funds by high street banks v commission based products. All will depend on the performance at the end of the day, but I bet the banks charges are similar to a decent financial advisers commision.So you could have done a straight comparison as you are entitled to ask for the commission amounts.In the end I suppose it is what you are comfortable with.

In reply to Babika:


I also have to sleep with her

In reply to neilh:

Look at this. An adviser has two clients, one of whom has a pension fund of £10,000 and the other of whom has a £100,000 fund. He gives them both the same advice, and charges one £200 a year and the other £2,000. He hasn't worked ten times harder for the wealthier client, he's just stiffing them both for what he can get out of them.

In reply to John2:
You have still not factored in what the cost of the banks charges are and whether that fund performs well or badly against other funds. The bank does not do it for free, they still have to pay their staff.So you still pay for it, it is just hidden as the bank does not have to disclose those costs ( its a tied product)

Whichever way, if you are comfortable with that, then that suits you.As any decent adviser will tell you, there is no point in buying a financial product if you are not comfortable with doing it that way.

Advisers will aslo fix their fees at costs to suit.Its down to you to negotiate.So when their is high " commissions" they drop them down , so the £2,000 will become £1,000.Good ones wil be upfront about this.

In reply to neilh:


Better to ask your fund manager for list of the years total transactions or trade on your fund, they might barely do anything or they could be actively managed. You can of course opt for the level of management with some funds, but you do pay for it and there is no guarantee of how much work they really put in.

In reply to Edradour:

No common sense please this is UKC.

Pensions - lots of eggs, lots of baskets:

Property, SIPP (some managed funds, some indexed linked low cost funds), ISA's, Premium Bonds, company pension if possible - you'd be mad not.

Mind you all this is only possible if you actually earn enough money to save........

cheers
mark

In reply to neilh:


That's all part of the con though isn't it. The exams, however expensive are no guarantee of competence or honesty.

In reply to neilh:


So what are the costs? All businesses have on going training costs.
I spend at least 3k per year per man in training costs, this includes various safety courses, factory training for the different brands we represent, hotel accommodation and travel and losing their productivity for x amount of days each year but my rates are well below that of the average financial advisor.

In reply to The New NickB:


I was a bit discouraged when my financial adviser got his calculator out to do a percentage calculation which any reasonably numerate person should have been able to do in their head. Maybe numeracy is not part of their qualifications.

In reply to The New NickB:

It's upto you whether you use one or not.

In reply to neilh:


Of course.

In reply to Robert Durran:

I would be as well. Find another one. Maybe he/she is not independent adviser .

In reply to Dax H:

We have friends who are accountants in the UK, doing books for local people and businesses, they do one long weekend seminar a year to maintain currency with their assoc. I can't see advisors being much different.

In reply to summo:

Wow a whole long weekend, that's an intense amount of training there.

In reply to neilh:


Alas, I may have a possibility of a pension ( crap if not) but genes are not so good.
My father got ill before he reached retrial age, and died at 69 after 5 years of illness, he paid his NI and taxes his whole life and got next to nothing out apart from treatment that failed to save him. My mother has lived a bit longer, but has dementia, which is expensive for the NHS.

Money is of course not everything,good health would be traded for many a good pension I'm sure.

In reply to Removed User:


And she with you.

In reply to Jim C:

Haha! Brilliant - have a like!

In reply to Dax H:


I guess some years a day might cover tax changes, in others you might need a week.

In reply to summo:

Welll turn it around and ask the adviser how much training they get and what exams they are qualified in to provide financial advice and how much continuing professional developement they do. You may find interesting responses which give an indication of the advisers competence and in turn help you decide if their company is the right one to trust your money with.

By the way as I have said before I am not a financial adviser....i just question peoples view of them as all " crooks".

An interesting topic considering the bear stock market.

In reply to summo:


Not wanting to side track the thread but you're quite right, at the end of the day private rentals are needed in this country and making it less profitable for the landlords means less houses available and higher rents on those that are still going.

In reply to Lord_ash2000:

I think we had a problem because investments were so bad elsewhere. My bank advisors were pestering me to think about the purchase of a buy to let and this sort of thing en masse does affect the local property market (where in the case of Nottingham, like most of the north, there is no shortage of places to rent).

Just to go back to pensions for a moment...

I'm 30, have two pensions from previous jobs (with contributions of 1 year and 2 years respectively), and have just started a 3rd job. My employer in this job won't give me a pension until I've been in for 6 months.

1. When I get a new pension after 6 months, should I bring across the two old pensions and put them into this new one?
2. For the next 6 months, apart from putting any savings I can into an ISA, what would be a sensible thing to do with any extra money I have each month, which is typically £300-400 after bills etc.

I have literally no idea, and would like to have a bit of an understanding so I can then do some more defined research!

Thanks.

In reply to NottsRich:

ISA's are crap at the moment, they offer next to nothing, you can do better in a current account if you look around, unless you want stocks and shares ISA's but at the moment they are hardly any better.

In reply to NottsRich:



What size is the employer? You should check whether they have hit their auto-enrolment date yet - they might have to give you a pension now.


It's entirely up to you. Personally I would, because it makes it easier to manage and, eventually you'll be getting one payment but it shouldn't make any difference, assuming the various scheme perform equally.


As someone else has said, have a look around. There's some good regular savings accounts linked to current accounts (First Direct for eg) and also some current accounts that will pay 5% or so on small balances. 6 months is too short for stocks and shares but no reason why you would need to stop saving after 6 months. Speak to an IFA if you're unsure.


MoneySavingExpert is a good place to start.

In reply to neilh:

Never said they were crooks, only that you should question your financial advisor or fund manager. It's your money, don't have blind faith.

In reply to Lord_ash2000:

At the moment our tenants are helping to pay our mortgage, the tax changes will hurt a little, but it is still viable.

Once the mortgage is cleared, if the tax rules don't change then it would be more viable to pay the council tax ourselves and rent it out for 20-30% of the year as a holiday let and use it ourselves in between. The new government measures would have the wrong effect.

Pretty sad really, as we want to be good landlords, currently renting it out at around 10% below the normal rate, much to the dislike of the agency that manages it. We want the house used 365 but can't afford to do this if it's costing us too much.

In reply to summo:
I think we can both agree on that.

Interestingly I know a few people who have bought buy to let properys and reckon it was the worst business/pension decision they have ever made.One woman I know who has 20, says its a nightmare and cannot sell them fast enough.

In reply to neilh:


like anything it is about knowing your market, buying at the right price, if you can do the maintenance yourself etc.. Like any business you need an aptitude if you are going to take on 20 properties.

In reply to Jim C:


I guess you've missed my point...what I meant was.....oh gawd, I just can't be bothered......its lost.

In reply to Removed User:

Unless she trades you in for a younger model, I'm a handsome 34 year old with a six(ish) pack if you wanna mention me to her.

In reply to Wsdconst:


I'll bring it up over supper......although Barnsley might be the stumbling block

In reply to Removed User:


Barnsley has been a stumbling block all my life , looks like I'll have to find another rich women to sponge off, and that's easier said than done around here.

In reply to Wsdconst:

LOL, Well I thought you were after her for her youth, not her wealth (as she doesn't have any of that). Good luck with the search.

In reply to summo:

Its not easy money doing buy to let..LOL if you can do it in London where there is good capital growth then I think its worth it .Shovelling all your pension into 1 or a couple of buy to lets could be just as traumatic as having everything in a couple of funds on the stock market( never mind the govt making it less attractive)

I suspect like me you have seen some people do well out of it and some who have been bitten badly.

Its the old story of do not rely on one thing for your pension

In reply to Edradour:

Thanks for the advice.

Re ISAs I was looking at the Halifax help to buy ISA which gives 4.5%, plus the government bonus if the money goes towards a first house deposit. If I don't end up buying, then I've still got a 4.5% ISA which seems ok to me.

I think I'll combine my current pensions then, just to make life simpler. There's not enough in them to worry about losing/gaining small percentage values.

Not sure what the auto-enrolment date is - how would I check that? My contract says I'll get a pension after 6 months. The company is <13 people. About 8 full time and several part time/consultants. Does that make a difference?

In reply to Removed User:

I've already got one but I'm always on the look out for an upgrade to the newer model,plus the one I have is really high maintenance.i married for love, next I think it'll be for money.

In reply to Removed User:


I'm in a similar situation. I hope to retire in 4 years, I'll get a pension of some £20,000 pa. My wife is younger than me, but already has a pension pot which will pay out double that. If she keeps working, she loves her job, as intended until she is 59, we should be comfortably off.

In reply to keith-ratcliffe:




What has this to do with the topic at hand?