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Thread: Pensions....

  1. #101
    Quote Originally Posted by Dave B View Post
    If you look at some of my previous posts going back years...I've been saying this all along.
    Educated , common sense people understand this, ****tards do not. Majority ****tards = God help us all.
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  2. #102
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    Quote Originally Posted by Weeman
    What do we do here, still teach kids about Jesus in School and barely include any common sense lessons on financial management?
    On the former point, not really. Schools these days tend to run away from any form of religious education, which can't possibly lead to an increase in intolerance...

    On the latter, I look forward to you trying to teach your own teenager about financial responsibility. They may be taught it, but how many are likely to listen?


    Quote Originally Posted by Weeman View Post
    He's got a solution, granted its a 1930's right wing party one but it's a solution
    You could call it his "final solution".
    Last edited by Neil Mac; 12-01-2018 at 01:39 PM.
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  3. #103
    Quote Originally Posted by Stu View Post





    Good plan!
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  4. #104
    Quote Originally Posted by Neil Mac View Post
    On the former point, not really. Schools these days tend to run away from any form of religious education, which can't possibly lead to an increase in intolerance...

    On the latter, I look forward to you trying to teach your own teenager about financial responsibility. They may be taught it, but how many are likely to listen?




    You could call it his "final solution".
    I actually have no issues with the Jesus side of things, principles are spot on. In the case of Isaacs school they still do a fair bit of Jesus. I do wish however that when I was at school I had dedicated lessons on life management to prepare me for later life. Instead I had RE and I've tried many times but I'm buggered if I can turn water into wine yet. I did however managed to rack up £7k of debt by 19 by buying a Clio 16V on HP.
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  5. #105
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    Quote Originally Posted by Weeman View Post
    I actually have no issues with the Jesus side of things, principles are spot on. In the case of Isaacs school they still do a fair bit of Jesus. I do wish however that when I was at school I had dedicated lessons on life management to prepare me for later life. Instead I had RE and I've tried many times but I'm buggered if I can turn water into wine yet. I did however managed to rack up £7k of debt by 19 by buying a Clio 16V on HP.
    Well, at least you weren't taught that Eugenics/economic cleansing was a good thing.
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  6. #106
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    Quote Originally Posted by Neil Mac View Post
    There is definitely some funny maths going on with regard to Defined Benefit (Final Salary and the like) pensions. It's almost as if Boris Johnson was involved in the calculations.

    I have an Excel spreadsheet provided by the company which runs the Defined Benefit pension scheme I am enrolled in. It's told me what I can expect to receive as a pension when I retire.

    However, a compound interest calculation based on the current value of my personal pension pot plus my future contributions and the company's contributions plus the minimum percentage interest applied until the day I should retire will provide only enough money to pay that pension for 11.5 years. My statutory company retirement age is currently 62. So, if I live past 73.5 years of age, someone else will be paying my pension. It's a pyramid scheme...

    Now that I've written that down, I should mention that I'm not going to give out my retirement address, lest Hobbit arrange for my execution on my 73rd and a half birthday...
    Further to the above, I can see where it would have been sustainable (thanks to Dave and Nige)...

    As Dave mentioned, life expectancy was 71yrs of age in 1960, 72 in 1970 and 73.7 in 1980. Today's 60 year-old is expected to live to be 88. By the time I retire in 18 years, I'm sure it will have risen again (and a portion of my pension will go directly to my healthcare provider).

    Furthermore, interest rates were higher in the olden days (prior to successive financial crashes), so it's quite feasible that almost all of the pension funds would have covered the pension outgoings of their members for their remaining lifetimes.

    When there was a crossover point of increasing life expectancy and decreasing interest rates, someone should have noticed and done something about it. Sure, greed and incompetence may have been factors, but damning previous generations with 20/20 hindsight isn't very helpful...
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  7. #107
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    Quote Originally Posted by Neil Mac View Post

    As Dave mentioned, life expectancy was 71yrs of age in 1960, 72 in 1970 and 73.7 in 1980. Today's 60 year-old is expected to live to be 88. By the time I retire in 18 years, I'm sure it will have risen again (and a portion of my pension will go directly to my healthcare provider).

    Furthermore, interest rates were higher in the olden days (prior to successive financial crashes), so it's quite feasible that almost all of the pension funds would have covered the pension outgoings of their members for their remaining lifetimes.

    Actuarial science. Funds were performing well and people were lasting as long as they had planned they should All was well. Funds started to under perform and people lasted longer... Pension committees were reluctant to do anything about it because they stood to benefit from current rules and it would be an unpopular decision. They only made those tough decisions when they were forced or had to.

    My rant is over companies taking pension holidays for a year when they thought the funds were too big. Employees had to keep contributing however. Then the market crash happened and the companies are still paying back the deficits to fund the schemes.
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  8. #108
    Quote Originally Posted by Neil Mac View Post

    I have an Excel spreadsheet provided by the company which runs the Defined Benefit pension scheme I am enrolled in. It's told me what I can expect to receive as a pension when I retire.

    However, a compound interest calculation based on the current value of my personal pension pot plus my future contributions and the company's contributions plus the minimum percentage interest applied until the day I should retire will provide only enough money to pay that pension for 11.5 years. My statutory company retirement age is currently 62. So, if I live past 73.5 years of age, someone else will be paying my pension. It's a pyramid scheme...

    Sleep with your eyes open, that's all i'm saying


    With regards to calculations - here's a story...

    When auditing defined benefit schemes I had a high "success" rate of there being a massive adjustment required

    Investment data is grabbed each year - easy to tick against because it's the equivalent of a bank statement

    The pension data that is sent to the actuaries is based off of company data. So the actuary report comes back and it's like... oh yeah that's the same number as we have, that's OK

    However did anyone ever stop to consider what data the actuaries were basing their calculations on and whether it tied back to employee records?

    Now, do you think that the payroll data being sent to the actuaries was:

    a) current
    b) accurate as of the financial statements
    c) probably the same data that they had used for the past X years and nobody had bothered to check


    Depending on staff turnover and salary changes, the adjustment required was usually pretty big

    I also saw a few schemes that had their actuarial liabilities calculated on the *SAME AGES* every year, for multiple years



    But as Neil points out, you don't need to be a maths whizz to work out that the contributions being made into a fund fall massively short of the likely drawdown that you are being promised and there's no way that anything other than a prize-winning return on the investment markets would ever cover the deficit

    Pyramid scheme?

    I reckon it's more of a ponzi scheme. Surely everyone can see there was obviously going to be a shortfall


    As for life expectancy, I don't buy it. People far smarter than us should have been involved in the consideration of these schemes... life expectancy has been on the increase massively year on year and it's a key factor in the calculation so is hardly going to be overlooked in sensitivity analysis


    I believe that those who stood to benefit the most where those that created the ideas. Those who were going to get screwed over were probably only just being conceived so it's a classic case of it literally never going to catch up to the people responsible

    The perfect crime.


    I'll see you all on retirement day

  9. #109
    Quote Originally Posted by Dave B View Post
    If you look at some of my previous posts going back years...I've been saying this all along.
    There's very little, if any, evidence that raising taxes generates government income

    As Dave/Weeman says, it's about everything taken together.


    Sadly, we're more like the Americans. And look who their President is

    Idiocracy (film) is becoming reality

  10. #110
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    My lovely wife would p### herself laughing at this thread.
    I've been adamant for years, telling her that I want taking to Switzerland when I'm about 76 and leaving there ... at Dignitas, that'll do for me.

    She, however, wants to live to 100.
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  11. #111
    Quote Originally Posted by Neil Mac View Post
    As Dave mentioned, life expectancy was 71yrs of age in 1960, 72 in 1970 and 73.7 in 1980. Today's 60 year-old is expected to live to be 88. By the time I retire in 18 years, I'm sure it will have risen again (and a portion of my pension will go directly to my healthcare provider)

    Do you genuinely think that actuaries should base liability calculations off of historical data?

    Or perhaps should they have looked at the annual rates of increment in life expectancy, rolled that forward, and based a calculation off that?

    If anyone's pension right now is being based off of current life expectancy in 2018 when they're due to retire in 2030+ then I may just have to bring forward Plan B, which is all about the size of a big red button...

  12. #112
    Quote Originally Posted by Dave B View Post
    My lovely wife would p### herself laughing at this thread.
    I've been adamant for years, telling her that I want taking to Switzerland when I'm about 76 and leaving there ... at Dignitas, that'll do for me.

    So on a slightly more serious note, I do fully believe we should be entitled to a choice of ending our lives in a pain-free manner, irrespective of whether we're diagnosed with a terminal illness or not.

    On a less serious note, I'm not sure everyone should be given that choice and rather they need annual assessments to see if they meet "minimum acceptable health standards" and get taken care of if they don't

    Morbidly obese and smoke? Right this way sir...

    Next.

  13. #113
    Quote Originally Posted by Neil Mac View Post
    Further to the above, I can see where it would have been sustainable (thanks to Dave and Nige)...

    As Dave mentioned, life expectancy was 71yrs of age in 1960, 72 in 1970 and 73.7 in 1980. Today's 60 year-old is expected to live to be 88. By the time I retire in 18 years, I'm sure it will have risen again (and a portion of my pension will go directly to my healthcare provider).

    Furthermore, interest rates were higher in the olden days (prior to successive financial crashes), so it's quite feasible that almost all of the pension funds would have covered the pension outgoings of their members for their remaining lifetimes.

    When there was a crossover point of increasing life expectancy and decreasing interest rates, someone should have noticed and done something about it. Sure, greed and incompetence may have been factors, but damning previous generations with 20/20 hindsight isn't very helpful...
    Agreed but... Other nations have managed to think far enough forwards or successfully adjust in the recent past to account for it. This is what puzzles me you have examples of working systems and models, so either copy that or get as close to it as possible. Like I said above , most of these would mean a higher tax rate, and the populous would be up in arms. Politicians are so scared of losing anything in terms of rating/support that not one party has had the bollocks to stand up and enforce anything to change it. The minute they do, everyones up in arms about it.

    I am no politician but it doesn't seem like rocket science to me, its like a business, run it like one. I've said it before, **** an elected Prime Minister find a guy that runs a big company very well and pay them whatever he or she requires to come in and run the place properly.

    What do we have now a system of career politicians the large majority from a fairly affluent background, ditch that. You cannot be a politician until you have 20 years in another sector. Your CV is reviewed like a job interview before you are even allowed to stand. Health Secretary must come from a Dr/ Nurse background, Defence from one of the services . Why is defence secretary not the top post one can have as a career soldier/sailor/RAF? You work hard as a policeman you get to Chief Constable you pick the Home Sec from the best of those etc etc. The whole system is old fashioned , out dated and complete bollocks. If you have faith in the majority of these idiots your heads in the sand.

    Problem is this country is like 1980's British Leyland it can't be saved in fact the entire system of finance that runs the planet can't be saved, It's broken and will never be fixed. Only way to fix it is start again, find a system that works for everyone globally , it'll never happen.

    We'll carry on sticking a band aid on the thing as it pisses blood out and those less fortunate will carry on paying the price. If enough people chose to see just how ****ed it all is, politics, banking etc and chose to react and do something instead of burying their head in the daily mail and blaming something like Immigrants, then maybe the system would change.
    Last edited by Weeman; 12-01-2018 at 03:10 PM.
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  14. #114
    Quote Originally Posted by Dave B View Post
    My lovely wife would p### herself laughing at this thread.
    I've been adamant for years, telling her that I want taking to Switzerland when I'm about 76 and leaving there ... at Dignitas, that'll do for me.

    She, however, wants to live to 100.
    She told me she's leaving you at indignitas.
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    To be honest I'm been gobsmacked she's still here...and have been thus gobsmacked since the day before we met
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  16. #116
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    Quote Originally Posted by Weeman View Post
    Agreed but... Other nations have managed to think far enough forwards or successfully adjust in the recent past to account for it. This is what puzzles me you have examples of working systems and models, so either copy that or get as close to it as possible. Like I said above , most of these would mean a higher tax rate, and the populous would be up in arms. Politicians are so scared of losing anything in terms of rating/support that not one party has had the bollocks to stand up and enforce anything to change it. The minute they do, everyones up in arms about it.

    I am no politician but it doesn't seem like rocket science to me, its like a business, run it like one. I've said it before, **** an elected Prime Minister find a guy that runs a big company very well and pay them whatever he or she requires to come in and run the place properly.

    What do we have now a system of career politicians the large majority from a fairly affluent background, ditch that. You cannot be a politician until you have 20 years in another sector. Your CV is reviewed like a job interview before you are even allowed to stand. Health Secretary must come from a Dr/ Nurse background, Defence from one of the services . Why is defence secretary not the top post one can have as a career soldier/sailor/RAF? You work hard as a policeman you get to Chief Constable you pick the Home Sec from the best of those etc etc. The whole system is old fashioned , out dated and complete bollocks. If you have faith in the majority of these idiots your heads in the sand.

    Problem is this country is like 1980's British Leyland it can't be saved in fact the entire system of finance that runs the planet can't be saved, It's broken and will never be fixed. Only way to fix it is start again, find a system that works for everyone globally , it'll never happen.

    We'll carry on sticking a band aid on the thing as it pisses blood out and those less fortunate will carry on paying the price. If enough people chose to see just how ****ed it all is, politics, banking etc and chose to react and do something instead of burying their head in the daily mail and blaming something like Immigrants, then maybe the system would change.
    Dave. Youíve spouted some shite on this thread but the above isnít . Great Brittan dot Com run as a business by people qualified & proven in their field. Shame itíll never happen.
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  17. #117
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    Quote Originally Posted by hobbit View Post
    But as Neil points out, you don't need to be a maths whizz to work out that the contributions being made into a fund fall massively short of the likely drawdown that you are being promised and there's no way that anything other than a prize-winning return on the investment markets would ever cover the deficit

    Pyramid scheme?

    I reckon it's more of a ponzi scheme. Surely everyone can see there was obviously going to be a shortfall
    The point is, when they were initially started, they had to be viable otherwise they`d never have got off the ground. It was only as time passed, life expectancy changed, returns on investments didn`t match forecasts that the shortfall started.

    So no, everyone couldn`t see there was going to be a shortfall.

    Suggesting that at 18 years old, just starting a job someone should have said "Hang on a minute, this pension scheme can`t work, it won`t be self funding" is a ridiculous suggestion.

    You are using the benefit of hindsight. Yes, the calculations may not have been kept up to date and the schemes should have been changed or closed sooner. But seriously, are you honestly saying that as a new starter to a company the average employee should question the viability of the pension scheme and tell the trustees they don`t know what they are doing? No chance.

  18. #118
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    Quote Originally Posted by Nige View Post
    You are using the benefit of hindsight. Yes, the calculations may not have been kept up to date and the schemes should have been changed or closed sooner. But seriously, are you honestly saying that as a new starter to a company the average employee should question the viability of the pension scheme and tell the trustees they don`t know what they are doing? No chance.
    Maybe it's a test for people starting work as actuaries. If they accept the pension, they should be sacked.
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  19. #119
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    Quote Originally Posted by Neil Mac View Post
    Maybe it's a test for people starting work as actuaries. If they accept the pension, they should be sacked.

  20. #120
    Quote Originally Posted by Nige View Post
    The point is, when they were initially started, they had to be viable otherwise they`d never have got off the ground. It was only as time passed, life expectancy changed, returns on investments didn`t match forecasts that the shortfall started.
    They were never viable. Genuinely - we looked at this at Uni as a project. Itís a joke

    So no, everyone couldn`t see there was going to be a shortfall.

    Suggesting that at 18 years old, just starting a job someone should have said "Hang on a minute, this pension scheme can`t work, it won`t be self funding" is a ridiculous suggestion.

    You are using the benefit of hindsight. Yes, the calculations may not have been kept up to date and the schemes should have been changed or closed sooner. But seriously, are you honestly saying that as a new starter to a company the average employee should question the viability of the pension scheme and tell the trustees they don`t know what they are doing? No chance.

    I donít care about the people taking it up. Iím talking about the concept of the schemes

    You do realise that defined benefit schemes still exist and have been tinkered with for about two decades, slowly eroding away - but not enough so that it would upset those who stand to benefit (who invariably are also part of DB schemes)


    Itís simply a matter of fact that the whole basis for DB schemes was flawed from the outset and those that created them did so for their own benefit

    Itís always been obvious that a defined benefit scheme with a blank cheque cannot be funded where the investments cannot ever possibly cover the cost of the liabilities and to say that ďwe didnít know people would live longer - we just assumed that everyone would be able to draw down a final salary / close to a final salary until due because the investments would continue to grow exponentiallyĒ


    Utter nonsense!

  21. #121
    Quote Originally Posted by Weeman View Post
    I have a day off now with nothing planned and I get fricking cabin fever sat around thinking I've wasted a day. What the hell are you supposed to fill that with when you retire, Bowls? Conversations with a wife you've had 40 years discussing the next living room wall paper ? The effectiveness of various brands of pile cream?
    For me right now, I never get time to do anything during the week or week ends. Personally I'd never get bored or having free time, filling it with hobbies, fettling or whatever. Additionally in retirement travel, lie in, take it easy.

  22. #122
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    Quote Originally Posted by hobbit View Post
    I donít care about the people taking it up. Iím talking about the concept of the schemes
    That isn't what you said though.

    Quote Originally Posted by hobbit View Post
    The final salary schemes were shocking. That generation have totally screwed us over for being greedy or, at best, totally naive
    You need to be clear just who you are insulting...

  23. #123
    Quote Originally Posted by Nige View Post
    That isn't what you said though.



    You need to be clear just who you are insulting...
    Oh ok, I did wonder why there was focus on having a go at people who signed up

    I apologise for not being clear - when I say previous generation I donít mean people in a scheme, simply ďhistoryĒ. Much like generation rent must think about me and everyone else


    The fix is simple though

    All you feckers with defined benefit schemes should do the honourable thing and say...

    Do away with the defined benefit. We will accept our pension being valued at:

    Sum of contributions from us and employers
    Combined with...
    The average compound performance of the investments across the years of contribution


    Basically, a best guess at what it would be under a defined contribution scheme

    You canít take out of the pot more than there is in it


    Instead whatís happening is that everyone is looting the pot, the pot is being constantly re-filled by later generations, who are then being told ďoh this pot wonít ever be for you either - see that small can in the corner? Itíll be that... and thatís assuming we ever let you stop working. We may live forever so youíll need to keep refilling this potĒ

  24. #124
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    Quote Originally Posted by hobbit View Post
    The fix is simple though

    All you feckers with defined benefit schemes should do the honourable thing and say...

    Do away with the defined benefit. We will accept our pension being valued at:

    Sum of contributions from us and employers
    Combined with...
    The average compound performance of the investments across the years of contribution
    Well, that's certainly more palatable than the other options you've alluded to

    The Defined Benefit scheme that I'm enrolled in is on the slide, and I'm under no illusions that it will still be there when I get to retirement age. I'm one of the last few people to get on it before it was closed, and there will shortly come a time when the people running the scheme won't be benefiting from it, hence I fully expect them to pull the plug and leave us with a more 'affordable' option. I have some time to weigh up my options, but they won't involve a trip to a Swiss Clinic or a small calibre firearm. I quite like the idea of spending time with my grandchildren.
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  25. #125
    I find this thread fascinating, for the good it can do to get people like me thinking about the future and the interesting topics being discussed about where it went wrong.

    So thanks to the thread starter first.

    I would like to put a hypothetical scenario in place close to my own situation, I am unsure at the moment of my next steps regarding pension and would appreciate any advice (I do have the option at work to speak with pension advisors so could do this also after the advice hear and see if it correlates - I would let you know?)

    If people would be happy to give advice I will put in the details.

    What I'm starting to think about is if I stay with my current employer for +8 years (it could be shorter could be longer - who knows), is it better for me to up my pension payments now with the current scheme, or put the additional money i would pay into it, into another high interest account?

    I could then use the money to buy a second property with the aim to rent it as a 'pension'

    Or if I changed employer and the new employer had a higher pension contribution than the previous employer I could then bleed of the accrued money into this new pension scheme.

    Or just stay as I am and spend it on what ever...(I don't want to do this)
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  26. #126
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    Tom, whilst there is risk with whatever your pension money is invested in, remember anything you put into your pension is before tax. So it's far more efficient than investing money into a savings account after you have already paid income tax on it.

    The sooner you start putting money into a scheme, the longer it has opportunity to grow.

    I've paid as much as I could into my scheme through additional voluntary contributions for many years, obviously keeping the balance between saving for my retirement and living for the present.

    Waiting until a few years before you plan to retire is far too late.

    If you have opportunity to speak to an advisor I'd strongly recommend you to do so.


    If this thread has done nothing apart from make people look at their own situation and plans then it's been very useful!

  27. #127
    Nige, just playing devils advocate, but you seem keen to talk about the tax deferral of a pension

    Do you realise that you could have foregone a contribution to a pension scheme, invested in property, and seen returns outstripping those of the average pension scheme in the past 30 years?

    Iím not saying Iíd advise it, but just because itís tax efficient doesnít mean itís the best way to maximise the return from your investment

    It also depends on your employer

    My wife makes an 8% contribution and her employer makes 18%

    My employer matches my contribution up to 5%

    Clearly one scenario is more favourable than the other... assuming the schemes continue (her DB scheme is currently being changed and thereís a union action to encourage a strike)


    My ďpensionĒ, though in reality I donít really think about pensions, has been a single property. Iíve seen a 125k contribution in 6 years.

    That outstrips any tax free bullsht I could have ever obtained



    The point being - all advice is totally based on personal circumstance

    Oh and a lot of people recommend ďIFAsĒ. Unless youíre paying them an hourly rate, theyíre not independent at all - they make their money from the products they suggest, so thatís anything but being independent

    IFAs are nothing more than failed accountants

  28. #128
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    Quote Originally Posted by hobbit View Post
    Nige, just playing devils advocate, but you seem keen to talk about the tax deferral of a pension

    Do you realise that you could have foregone a contribution to a pension scheme, invested in property, and seen returns outstripping those of the average pension scheme in the past 30 years?

    Iím not saying Iíd advise it, but just because itís tax efficient doesnít mean itís the best way to maximise the return from your investment

    It also depends on your employer
    Oh, I completely agree with that. But the average employee starting work is hardly likely to strike out on their own and start building a property portfolio. They will join the pension scheme through their employer.
    When I started work the last thing I had was enough spare cash and financial astuteness to jump on the property wagon. I just managed to be able to buy a small end terrace house and pay the 15% interest on my mortgage. It was an endowment one too, which was bollocks but I didn`t know any different at the time, I listened to the `advice` I was given.

    Don`t get me started on the rights and wrongs on buy-to let and the effect that has had on prices of properties for first time buyer That is a totally different subject.

    For most people they join a scheme, usually through their employer and if they find they have a spare bit of income after promotions, wage rises etc they can put a bit more into their pension, knowing they can go back to normal payments if circumstances change.

    Hindsight is also great. My Dad was self employed all his working life, had a pension with the Prudential and paid in regularly. When he came to retire it was worth a pittance. But when he started paying, that`s just what people did.
    We are a much more informed society these days and I`m not for one minute suggesting the only way is to put more money into your pension through work. From my experience that has been worthwhile but that isn`t to say it is the best option for everyone.

    However I still suggest that it`s better than doing nothing at all and just hoping things somehow work out without you doing anything.


    Quote Originally Posted by hobbit View Post
    The point being - all advice is totally based on personal circumstance
    Of course.

  29. #129
    Quote Originally Posted by Chris D View Post
    I've spent half of my (currently 27 year) career sat in a shit hole, mostly hostile, I have been shot at, have narrowly missed being blown up by IEDs or rocketed/mortared and all of this time I have been away from my family, who worry themselves shitless that they may never see me again.

    Right now I'm writing this, sat on an american camp cot, in a mosquito net in South Sudan. I've been here two months already and I'm not going home until mid Feb. I'm coming back here again in Jul and I'll be here until Feb 2019. My wages aren't tax free when I deploy. Ever.

    It'll take me some effort to get to the latter figure and some more shit tours too no doubt. That'll be 37 years contribution to the crown, doing a job that many wouldn't.

    I have no shame in taking what they offer.

    Remember folks - encourage your kids to try harder at school so they can join the RAF instead and fight wars from hotels

  30. #130
    We are a much more informed society these days and I`m not for one minute suggesting the only way is to put more money into your pension through work. From my experience that has been worthwhile but that isn`t to say it is the best option for everyone.
    I think pensions have changed so much since you started yours - You could not start one like yours now. What my employer offers is not great compared to what you used to be able to get.

    Is there much risk that the pension I am paying into now could be changed for the worse in the years to come?
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  31. #131
    Regular Nige's Avatar
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    Quote Originally Posted by thesmudge View Post
    I think pensions have changed so much since you started yours - You could not start one like yours now. What my employer offers is not great compared to what you used to be able to get.

    Is there much risk that the pension I am paying into now could be changed for the worse in the years to come?
    I know current schemes aren't as good as the old final salary schemes. Even the investment ones aren't as good as some of the earlier ones as employer contributions are reduced.


    Your current pension will be an investment type.

    So you put money in each month and the company also does and that is invested on the stock market. You can usually choose the level of risk.

    The hope is that by the time you want to retire that's a good sized sum of money that you can then use for your income. As discussed earlier, the drawdown type of pension is becoming quite common. Although it isn't for everyone.

    If you change companies, you may be able to continue putting money into the same scheme or you may need to start another.
    That's what often happens and people can end up with several smaller pots of money spread around different schemes rather than one large one. Sometimes consolidating them is beneficial.


    The way they usually become 'worse' is by the employer reducing the percentage of your wage they put into the pension compared to what you do but whatever is already in the scheme stays there. Unless the market drops.

  32. #132
    Regular Darren Langeveld's Avatar
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    Quote Originally Posted by Nige View Post
    Blah blah, saving blah blah prudent blah blah do the right thing blah blah plan for the future ........

    Unless the market drops.
    That's the rub isn't it? You do everything you think is right but still could get screwed.

    My father in law is in the same position as your Dad.
    Somewhat ironically, given the discussions in this thread, it was only the recent sale of the office block he'd bought that housed his firm that's got him out of the shit!

    Why the hell would anyone entrust their financial retirement to investment bankers?
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  33. #133
    Quote Originally Posted by Nige View Post
    I know current schemes aren't as good as the old final salary schemes. Even the investment ones aren't as good as some of the earlier ones as employer contributions are reduced.


    Your current pension will be an investment type.

    So you put money in each month and the company also does and that is invested on the stock market. You can usually choose the level of risk.

    The hope is that by the time you want to retire that's a good sized sum of money that you can then use for your income. As discussed earlier, the drawdown type of pension is becoming quite common. Although it isn't for everyone.

    If you change companies, you may be able to continue putting money into the same scheme or you may need to start another.
    That's what often happens and people can end up with several smaller pots of money spread around different schemes rather than one large one. Sometimes consolidating them is beneficial.


    The way they usually become 'worse' is by the employer reducing the percentage of your wage they put into the pension compared to what you do but whatever is already in the scheme stays there. Unless the market drops.
    Yeah I do know how it works, it's a case of do I up my payments now, later or never (save separately).

    Upping my payments now does not appear to be the most beneficial because my current employer (hypothetically) will only match my contribution.

    Therefore I should save the same money every month I would have put into the pension and wait until I change to a new contract orbemployer that pays more than my contribution, the question is how much do they need to contribute more than me? What is the tipping point? Anyone know?

    Lastly if my employer contributions never end up going up (they could go down from where they are now looking at the state of things - but I'm don't know the future and would appreciate any expertise here) I would at least have saved a wedge of cash that I could then invest in housing,etc

    What I'm cautious of is upping my pension payments now, to find that my employer contribution reduces, the money I payed in would be locked away - where as if I get on the housing ladder early enough with a second house I could pay of that mortgage before retirement and then live off the rent? I need to do some sums on the scenarios.
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  34. #134
    Regular Nige's Avatar
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    Quote Originally Posted by thesmudge View Post
    Yeah I do know how it works, it's a case of do I up my payments now, later or never (save separately).
    Ah, sorry, I thought you were asking about the basics

  35. #135
    I've never known topics such as the current financial ones stay on subject for so long on here
    I'm arresting you for murdering my car you dyke digging tosspot

  36. #136
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    Angry

    Tom,

    I’ve been reluctant to get involved in this discussion as it can quickly appear like willy waving, and individual politics have a part in ones planning ethos.

    I contribute to my employers pension, however I transfer chunks of it periodically into my SIPP. This gives me the advantage of employer contribution plus the flexibility to invest in more speculative areas. I use a specialist pension broker and he achieved a 40% return in 2017.

    However my wife is self employed and has no pension. I encouraged her to use one to help benefit from the tax advantages but she has been reluctant, arguing she sees no benefit in tying up money long term and then being unable withdraw it without tax penalty.

    Instead she bought property. She receives a 7.7% yield per annum on her investment and enjoyed capital growth of 33%.

    However that’s not the whole story- the yield pays the mortgage, which in turn increases the equity stake in the property, her logic being that the property will be repaid by retirement and the income she receives will be her “pension” whilst still maintain an asset.

    Of course it’s not that simple.

    If you’re a higher rate tax payer the yield can be reduced significantly.

    There are also costs associated with property: maintenance, stamp duty, tenancy fees and of course the risk that the property could be vacant and therefore costing you money.

    Finally, morally some folks get very annoyed about buy to let property and the ramifications for society. I live in London where an entire new tower block is currently empty, bought by speculative eastern business conglomerates looking at capital growth rather than rental income. Is that more immoral than you owning a second property- only you can decide that.

  37. #137
    ^^ thanks very interesting and thought provoking, the morality debat of owning more than one house does not bother me. I like the idea of buying something that needs work, doing it myself, then renting for a time or just selling to keep making a profit. We did it on our first house and the profit we made was over 50k, only lived there 2 years. Have done the same on the next house and completed the work which already doubles the profit we made on the first place. Having a second property could allow me to keep doing it.

    If there is an investment such as a pension scheme, someone is winning and someone will be loosing of it, therefore, there are morals within all of it.
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  38. #138
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    Remember you need to pay 3% extra stamp duty on a second property and capital gains tax on any profit you make.

    A do-er upper to flip needs to see a big return to cover those costs, itís not as easy to make money from property as homes under the hammer suggests!!

  39. #139
    Quote Originally Posted by leavingeasy View Post
    Remember you need to pay 3% extra stamp duty on a second property and capital gains tax on any profit you make.

    A do-er upper to flip needs to see a big return to cover those costs, itís not as easy to make money from property as homes under the hammer suggests!!
    Both of those changes have been suggested to have done little except increase asking prices and rental fees

  40. #140
    Regular Floyd's Avatar
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    I read something today about retirement...


    Your days are endless and yours to fill. You have acres of time to do what you want. You can lie in until ten every day. You have a roof over your head. The NHS will take care of your health. You have a wealth of resources and public services to investigate, from libraries to public parks. You can survive on very little income. At one point it occurs to you are living a life quite close to that of an unemployed welfare recipient. You begin to wonder that maybe you squandered all those years in the office when you could just have signed on and let the state take care of you. As you watch the government eye the potential tax on your pension pot, your investments, your dividends and the rest, you really wonder why you gave them anything and didnít choose just to take everything for a lifetime instead.
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  41. #141
    Regular Darren Langeveld's Avatar
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    Quote Originally Posted by Floyd View Post
    I read something today about retirement...




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  42. #142
    Quote Originally Posted by leavingeasy View Post
    Remember you need to pay 3% extra stamp duty on a second property and capital gains tax on any profit you make.

    A do-er upper to flip needs to see a big return to cover those costs, it’s not as easy to make money from property as homes under the hammer suggests!!
    Buying a commerical property/shop circumvents that (for now...I bet). Possible not as easy to shift on, but rental market could be possible.

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