Pension funding?

Re: Pension funding?

Hi Martin

Interesting wee story that :).

This could be quite a good thread , I wonder if anyone has got an exciting pension plan story to tell , where they made a great decision 25+ years ago and their pension pot has far exceeded ther expectations.

I took out a small personal pension about 13 years ago with the great intention of adding to my contributions and having a huge fund accumulated 25 years down the road.
Reality is a few years went by and I never increased my contributions as the performance was nothing great and I’m still paying in the same amount monthly now as I was 13 years ago.The fund was really struggling a few years back but it seems to have recovered and performing reasonably but nothing startlingly good.

I believe that if I’d simply paid all my net contributions into a high interest bank account and getting 5{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} net interest per annum I’d be pretty close to the same sort of fund as I have now , so I’m fairly under whelmed by that sort of performance.
Of course this has been a time of low inflation and low interest rates blah , blah , blah.

About 5 years ago I decided to really stretch myself on a big mortgage and buy as good a house as we could (hardly) afford , rather than adding to my pension and this has turned out to be a very wise investment ATM.
Only problem is when it comes to retirement if we want to realise the asset we’d have to downsize and I’m not sure we like that idea either although it’s nice to have the option.

That’s my story so far , burying my head in the sand I suppose :).

Bryan

Re: Pension funding?

These seem to be common stories where personal pensions are concerned. Its no real surprise though, a mate of mine was talking about his pension when he came to see me a couple of weeks back.

No this guy has paid a fortune into his pension pot and when he recently evaluated what he is likely to get he was disgusted. Its the same for mortage endowments and like personal pensions they are only as good as the management of the funds and the markets. With low interest rates for a long period of time neither in my opinion are sound financial investments and everybody I speak to who has either is dissapointed with the performance of their investments. I perosnally reckon the only people that make anything out of these are the shysters that sell them !

My own endowment is due to mature next year and it will only just break even with a little bit more than was forcasted 25 years ago. Many say that putting money away in accounts that pay decent ineterest and moving this money as and when required is the best way to look after your funds and you can choose when you want your money and how you want it.

I myself do not have a personal pension but I don;t think that I have missed out on much. Life is a lottery and we take our chances, nothing is for certain even that you may be around to collect the proceeds of any pension.

Re: Pension funding?

The thing with a pension is that you will need enough in the pot to provide a income. That income needs to be enough to fund all you will need because if its not then you would get no help from the state and will be paying income tax for as long as you live as well as forking out for a whole host of things and you could be worse off than you might think.

My friend has paid a signifiicant sum so far into his pension pot and he will be getting far far less than his financial experts were forecasting and those people are on a tidy retainer as well as large commisions.

Fortunately my friend deals in hundreds of thousands and is not short of a penny or two so this may end up a inconvenience for him. However if you are relying on a pension to provide for all your needs and at the end it does not and in the process it puts you into the halfway house it may be a bad investment.

Re: Pension funding?

iadom wrote:
Also unlike all of the other investments mentioned above, the lump sum at the end is totally tax free.

Problem with this is that I think I’m right in saying only 25{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} of your pension fund can be taken as tax free cash :x.

As I said I’d love to hear someone give us a good and positive pension story.Endowments of course are totally different and a few of my friends did well from them when they took them out pre 1980 ish.

Bryan

Re: Pension funding?

EFS wrote:Another 10 years like that and I can take early retirement………..
At 64 😥

I could make some sarcastic (probably caustic) comment there but, in the interest of world peace, I’ll resist the temptation. The fact that I’ve mentioned it is probably quite enough. 😆

I started a private pension when I was 18. After 22 years it’s done, well, not a lot really so I decided on the property route. Despite being told many years ago that I’d be quid’s in when I retired that is, if I didn’t keel over before I popped it.

I could be right and be taking a punt the right way or, I could be wrong and I can look forward to sleeping under canvass in my latter years. But, way I see it, either way it’s a gamble the way things are on a game in which the rules change on a regular basis.

I don’t like playing by the rules when the odds are against me. 😉

K.

Re: Pension funding?

Bryan wrote:

Problem with this is that I think I’m right in saying only 25{e5d1b7155a01ef1f3b9c9968eaba33524ee81600d00d4be2b4d93ac2e58cec2d} of your pension fund can be taken as tax free cash :x.

Why is that a problem, I can think of no other investment that allows you to take such ( possibly ) large sums of money tax free, after already giving you very generous tax relief on your contributions in the first place.

The recent changes to CGT will have a major effect on anyone with a strategy based solely on property.

Jim.