Indeed - that info would be potentially very handy to those of us who don't get the contributions when making decisions - heck of a contrast to my last place where the contribs were 16% (against my 5%) into a rather nice FS scheme.

It was almost Public Sector, not quite though

Interesting stuff on this thread, as you all know the Government is legislating that every worker must contribute into a pension fund. Bullet points on how this will work appreciated.

p.s. some very very nice people work in the pensions fund industry

"Not quite" because it isn't PS but ~50% of it's funding does come from public monies (the fraction varies and may well be lower given a recent £1bn cut in central funding).

From the annual glossies sent out by the pension scheme their income from investments was, over the last few years, ahead of their liabilities and, again, according to said glossies the future liabilities were covered from incoming contributions.

Sounded to me that it was pretty healthy and sustainable but I'm not an expert so may well be wrong.

Not far from the truth though - they are a rip off. My wife has a fund in the US and the managers take 1% off whether they made money or not. For the last 6 years though the value of the fund has actually gone down, so even before real terms it's worth less. But heck - the advisers still cream off 1% a year because of the sterling job they are doing!

Even my father retired last year with 40 odd years of a pension - his calculation was that a savings account at the local bank would have outperformed his retirement fund by a considerable margin! Seriously - what is the point of a financial adviser if a standard savings account outperforms the advisor?

Then there is the issue of our politicians - they WILL raid the UK pension industry in the future. The Labour Party will get into power again some time in the future and decide that wealth redistribution is order of the day (again) and will penalise everyone who put money aside. They did it before....

Sorry, but I'd rather pay the tax and keep the money myself.

I am sorry to hear of your experiences through your Wife and Fathers losses on the management of their pensions. But not surprised.

So far as I am aware the only guaranteed return fund in the UK went bust, namely Equitable Life. I think we must draw our own conclusions . So far as I am aware no financial adviser will guarantee any return on any investment. If there are any, I would be interested to hear of them.

Sidicks knows what he is talking about.

Sensible advice is to talk to an Independent Financial Adviser who will charge you a fee up front for the advice. Make sure the adviser is at least "G60" qualified (or equivalent).

Pensions are a tax-efficient way of saving for retirement (tax-relief up to your highest marginal rate up to a maximum of £50k). You can buy & sell shares yourself outside of a pensions or ISA wrapper, but you may become liable for Capital Gains Tax on any proceeds when sold and you'll be paying each time you deal. A pension or ISA shelters your investments from CGT and dealing costs are relatively low because of the economies of scale involved when fund managers buy & sell assets.

It is very easy to show how a speculative start-up company can show meteoric investment returns to their initial investors over very short periods. The difficulty for fund managers is to be able to always pick those companies, invest at the bottom and get out when the share price tops-out. Any investment fund attempting to do this is taking massive investment risk. Most people cannot afford to take such high investment risks with their pension fund, this is why most mainstream fund managers aim to consistently outperform the average fund in their sectors, whilst taking a calculated level of risk. This is why most "managed" or "balanced" funds will be unlikely to deliver consistent double-digit returns. They manage risk through diversification.

No fund manager can outguess the market all the time or always be the first to spot a good asset to buy. Read up on the fruit-fly principle and you'll understand why.

We became accustomed to investment returns of 20-25% per annum in the 1980s and 1990s because inflation was high at the same time, so to encourage investors (think fund managers) to buy their shares, companies had to declare annual dividends that were greater then the annual yield Government index linked Gilts were offering. Fund managers usually reinvest dividend income, showing healthy investment returns. In turn this made certain "blue-chip" stocks & shares appear more attractive to other buyers, hence they also saw their intrinsic value rise as well (see "supply & demand"). This boosted the asset value of companies such as Marks & Spencer, Glaxo, Marconi etc. Everyone wanted to invest, so there was no shortage of new capital (yours & my premiums) entering the market.

Fast forward to the last five to ten years and we have seen both interest rates and inflation fall to record lows. Companies no longer need to declare annual dividends of 15 or 20% because index linked Gilts are only offering 0.5 or 1% returns over the rate of inflation. Globalisation means that where once markets on opposite sides of the world were rarely in the same part of the economic cycle at the same time, multi-national conglomerates have parts of their business throughout the world, hence the world stockmarket behaves all at the same time in roughly the same ways. Its a completely different investment world now.

What does not help is ill-informed media hyperbole about "mass pensions mis-selling" and "extortionate fees". If pension providers make no profit, they go bust and you're only covered up to £50,000 by the Financial Services Compensation Scheme if your pension provider goes down the drain because everyone transfers their funds out or the Gubberment decides they can't continue to charge the fees and charges you contractually agreed to when you signed the proposal form. If your financial adviser truly misled you about the likely costs of the policy or failed to assess your investment risk tolerance and put you into a Far Eastern Emerging Markets Fund when you should have been invested in Gilts & Fixed Interest, you are free to complain to the business that gave you the advice (not always the pension provider). If you get no joy, you then have six-months to refer the complaint to the Financial Ombudsman Service, which is an independent dispute resolution service that can make the business pay you compensation (if merited) up to £150,000. The Financial Ombudsman Service is a completely free alternative to the Courts, but it is not the industry regulator and it is not a consumer champion. It is impartial and may not uphold your complaint.

Remember, financial advisers are not clairvoyants and do not have crystal balls (they walk funny because of other reasons), so you can't complaint that you were mis-sold just because your pension fund has not performed as well as you expected. A decent IFA will have made this abundantly clear when recommending the pension in the first place.

Hope this is useful. Happy saving.

The robbing fkers. Charging 1% a year? It's a bloody disgrace. Yes, it's much better to pay 40% tax and keep all the money myself (except for the 40% bit the taxman takes of course). Mathmatically it's much better for the taxman to have 40% a year than pay a Wall Street thief 1%pa). This is a scientifically proved fact.

Good grief, we've agreed again. No way can giving away nearly half your money before you start make sense compared with 1% pa charges.

If people were saying "I'd rather do an ISA than a pension", fair enough. But walking away from all of the tax reliefs is very odd. Even business owners planning for CGT need to be careful - who knows what rate of CGT will apply when they actually come to sell? Might as well do a bit of planning and pay yourself a salary which is wiped tax free by pension contributions to spread the risk.

Well, I never had one of those pension plans like public sector get or companies generously contribute to. All I ever had were the ones you put a monthly contribution into from your own resources, and because I don't know one end of an investment fund from the other, I put it in the managed fund assuming the 'manager' is an expert who manages the fund for me.

You wouldn't really have to be Superman to outperform the ones I had. You'd have had to be able to put the contributions in a box in a cupboard. I know this is my fault because....well, I'm not sure why, but accept it's my fault if for no other reason than that it was my decision to get involved with the thing. And I know it's not just me because everybody (as far as I know without exception) who got involved in the same type of scheme ended up with the same or more or less the same highly unsatisfactory result.

As to 'spread the risk', I'd be careful with that if I was you. It's a theory based on the misconception that a diverse range of things can't all go wrong at the same time. They can.