Times article about pensions
Discussion
I've been banging on about this for ages.
I worked for an investment platform and would deal with plenty of people who would contact us (the administrator) to moan about how little their ISA/SIPP had changed in value or how much they had paid in fees. So called professional financial advisors charging 3-5% initial and 1% Amc to put clients into the worst bog standard funds from banks is disgusting.
I worked for an investment platform and would deal with plenty of people who would contact us (the administrator) to moan about how little their ISA/SIPP had changed in value or how much they had paid in fees. So called professional financial advisors charging 3-5% initial and 1% Amc to put clients into the worst bog standard funds from banks is disgusting.
drainbrain said:
Oh well. Here's a glass raised to that great army of true believers in the pension system.
May all your pounds become fivers, fivers become tenners, and tenners turn into twenties!!
May you stroll down that bleached white beach like silver panthers, surrounded by gently swaying coconut heavy palms, hand in hand with your silver pantheresses whilst laughing naked native children skip happily alongside you showering you with scented petals and their singing fishermen fathers land another net fat with exotic delicacies for your nightly feasting!!
God bless the scheme managers and all owners of annuity companies everywhere who bestow so many blessings on their happy grateful flock of clients!!
Here's to you all!!
Wished I'd seen the unedited version!May all your pounds become fivers, fivers become tenners, and tenners turn into twenties!!
May you stroll down that bleached white beach like silver panthers, surrounded by gently swaying coconut heavy palms, hand in hand with your silver pantheresses whilst laughing naked native children skip happily alongside you showering you with scented petals and their singing fishermen fathers land another net fat with exotic delicacies for your nightly feasting!!
God bless the scheme managers and all owners of annuity companies everywhere who bestow so many blessings on their happy grateful flock of clients!!
Here's to you all!!
Edited by drainbrain on Saturday 1st July8 23:17
Glad to see Royal London in there, the pooled fund invests 7% or so in social housing and 25% in structured products (which will bring most compliancy bods out in a sweat), but the results are steady and impressive. I rate its Governed Portfolio funds very highly.
Saving for retirement isn't only going to be by a pension. Given that the word 'pension' wasn't mentioned once in the Spring budget, the fact that millennials now rate them as so low a priority (certainly in terms of importance alongside ending the public sector pay cap and funding social shortfalls), I wonder if the imperative and latitude for Philip Hammond (or whoever may be in the job) to cull tax relief has arrived. Having said that, although the cost to the tax payer of pension tax relief is substantial. it does seem to be an annual refrain.
https://www.gov.uk/government/statistics/registere...
drainbrain said:
Oh well. Here's a glass raised to that great army of true believers in the pension system.
May all your pounds become fivers, fivers become tenners, and tenners turn into twenties!!
May you stroll down that bleached white beach like silver panthers, surrounded by gently swaying coconut heavy palms, hand in hand with your silver pantheresses whilst laughing naked native children skip happily alongside you showering you with scented petals and their singing fishermen fathers land another net fat with exotic delicacies for your nightly feasting!!
God bless the scheme managers and all owners of annuity companies everywhere who bestow so many blessings on their happy grateful flock of clients!!
Here's to you all!!
What stops you running a SIPP (containing self selected shares/cheap trackers) and then when retiring taking it as drawdown thereby avoiding an annuity?May all your pounds become fivers, fivers become tenners, and tenners turn into twenties!!
May you stroll down that bleached white beach like silver panthers, surrounded by gently swaying coconut heavy palms, hand in hand with your silver pantheresses whilst laughing naked native children skip happily alongside you showering you with scented petals and their singing fishermen fathers land another net fat with exotic delicacies for your nightly feasting!!
God bless the scheme managers and all owners of annuity companies everywhere who bestow so many blessings on their happy grateful flock of clients!!
Here's to you all!!
Edited by drainbrain on Saturday 1st July 23:17
Derek Chevalier said:
What stops you running a SIPP (containing self selected shares/cheap trackers) and then when retiring taking it as drawdown thereby avoiding an annuity?
Don't confuse the poor chap, he's still struggling to understand what a pension is (the term is used in a number of different ways), try and tell him a SIPP is just a 'wrapper' and he'll explode!
Derek Chevalier said:
What stops you running a SIPP (containing self selected shares/cheap trackers) and then when retiring taking it as drawdown thereby avoiding an annuity?
Well, as a pensioner I think it would be pretty pointless to start one now. But I doubt there's anything stopping anyone else doing it. Can see a bit of a problem working out which shares to self-select if you don't know anything about them. And can see a bit of a problem with the trackers when the markets lose ground. And the 'drawdown' thing carries a whiff of taxable event. But I suppose anything's better than an annuity, isn't it? But assuming you're a pension sort of guy, can I ask you something? What would you consider to be a decent retirement income, a good retirement income, and a stunning retirement income for a 65 year old to drawdown from a SIPP?
drainbrain said:
But assuming you're a pension sort of guy, can I ask you something? What would you consider to be a decent retirement income, a good retirement income, and a stunning retirement income for a 65 year old to drawdown from a SIPP?
Too many variables - for exampleAccrued pension point
Lifetime allowance
Taxation policy
Yield of shareholdings (possible to live off dividends alone?)
Health
Derek Chevalier said:
Too many variables - for example
Accrued pension point
Lifetime allowance
Taxation policy
Yield of shareholdings (possible to live off dividends alone?)
Health
Hmmm. Bit complicated for a dumbo like me m8. I'm best dealing with less variable type stuff. Y'know. You invest the money. You get an income. You pay your tax. You spend the rest. In an unvaried sequence until you die. Then the missus gets the income, pays the tax and spends the rest. Really. Like that. Monkey simple. Accrued pension point
Lifetime allowance
Taxation policy
Yield of shareholdings (possible to live off dividends alone?)
Health
Edited by drainbrain on Sunday 2nd July 21:06
drainbrain said:
Hmmm. Bit complicated for a dumbo like me m8. I'm best dealing with less variable type stuff. Y'know. You invest the money. You get an income. You pay your tax. You spend the rest. In an unvaried sequence until you die. Then the missus gets the income, pays the tax and spends the rest. Really. Like that. Monkey simple.
Edited by anonymous-user on Sunday 2nd July 21:06
In all honesty this explains a lot about why you're unhappy with your lot.
Calling a fund a pension is simply a way of managing and deferring the tax you're paying before and during the period that you're receiving the benefit of the investment in later years.
Plenty of ways of doing it if you try.
Regards from a 67 yo who took the time to understand how these things work and is quite happy with his income.
Edited by anonymous-user on Sunday 2nd July 21:45
Edited by anonymous-user on Sunday 2nd July 21:46
REALIST123 said:
In all honesty this explains a lot about why you're unhappy with your lot.
Calling a fund a pension is simply a way of managing and deferring the tax you're paying before and during the period that you're receiving the benefit of the investment in later years.
Plenty of ways of doing it if you try.
Regards from a 67 yo who took the time to understand how these things work and is quite happy with his income.
Edited by REALIST123 on Sunday 2nd July 21:45
What 'lot' is it I'm unhappy with? My income as a pensioner? Well I'm really not unhappy with it at all.
And I'm sorry I don't understand the bit from "calling a fund.." to "...in later years" but I don't.
It's good to know that you're quite happy with YOUR income too, and also that it's justified the time you spent understanding these pension things.
And I'd certainly agree that there are plenty of ways of creating a satisfactory retirement income if that's what you're saying. But that's hardly a secret, is it?
To try to help;
Pension is a word used to cover many things, primarily:
An Income received during retirement. This can be the State Pension that nearly everyone will get, or the income from an occupational pension or personal pension.
The minimum State Pension is pretty much guaranteed to everyone who has paid NI and it is paid by the government. An occupational pension comes with the job and is paid to you (in retirement) by the pension Trustees of the company you worked for. You will have either directly or indirectly contributed towards this pension income.
A personal pension is you own responsibility (and therefore something you can control). In this case the term/word 'pension' is used to denote a saving plan for retirement. This is what is being focused on when calling it a tax wrapper.
The pension (wrapper) itself is not the driving factor in performance (it is simply the device that gives you the tax advantages). It is the investments held within it that make (or lose) money.
So, the word/term 'pension' has many different meanings. Hence the confusion most people have with pensions.
State pension = what you get from the government in retirement.
Occupational pension = what you get from one or more employer in retirement.
Personal pension = what you save yourself free of tax to take out (25% tax free, 75% taxable) in retirement.
Pension is a word used to cover many things, primarily:
An Income received during retirement. This can be the State Pension that nearly everyone will get, or the income from an occupational pension or personal pension.
The minimum State Pension is pretty much guaranteed to everyone who has paid NI and it is paid by the government. An occupational pension comes with the job and is paid to you (in retirement) by the pension Trustees of the company you worked for. You will have either directly or indirectly contributed towards this pension income.
A personal pension is you own responsibility (and therefore something you can control). In this case the term/word 'pension' is used to denote a saving plan for retirement. This is what is being focused on when calling it a tax wrapper.
The pension (wrapper) itself is not the driving factor in performance (it is simply the device that gives you the tax advantages). It is the investments held within it that make (or lose) money.
So, the word/term 'pension' has many different meanings. Hence the confusion most people have with pensions.
State pension = what you get from the government in retirement.
Occupational pension = what you get from one or more employer in retirement.
Personal pension = what you save yourself free of tax to take out (25% tax free, 75% taxable) in retirement.
Try this:
A pension SCHEME or PLAN is a tax wrapper, the aim of which is to be used to contain investments tax advantageously in order to provide the pension INCOME at retirement. This INCOME is known, commonly, as a pension.
So when people say they're putting money into a pension what they mean is they're putting money into a plan designed to create a pension. So they're not really putting money INTO a pension, they're putting money into a plan FOR a pension.
So a pension isn't a tax wrapper at all. A pension is what the tax wrapper/plan produces.
I mean, why argue with the OED definition?
A pension SCHEME or PLAN is a tax wrapper, the aim of which is to be used to contain investments tax advantageously in order to provide the pension INCOME at retirement. This INCOME is known, commonly, as a pension.
So when people say they're putting money into a pension what they mean is they're putting money into a plan designed to create a pension. So they're not really putting money INTO a pension, they're putting money into a plan FOR a pension.
So a pension isn't a tax wrapper at all. A pension is what the tax wrapper/plan produces.
I mean, why argue with the OED definition?
aka_kerrly said:
I've been banging on about this for ages.
I worked for an investment platform and would deal with plenty of people who would contact us (the administrator) to moan about how little their ISA/SIPP had changed in value or how much they had paid in fees. So called professional financial advisors charging 3-5% initial and 1% Amc to put clients into the worst bog standard funds from banks is disgusting.
The problem though is that the media focuses on the concept of the pension which is misleading. I worked for an investment platform and would deal with plenty of people who would contact us (the administrator) to moan about how little their ISA/SIPP had changed in value or how much they had paid in fees. So called professional financial advisors charging 3-5% initial and 1% Amc to put clients into the worst bog standard funds from banks is disgusting.
The issue is obviously the fund management industry. Whether you hold their products in an ISA, a pension or in your own name doesn't come into it. And this clearly confuses angry old dodgy people with an axe to grind.
The fund management industry is still a bit or a farce but has been changed dramatically for the better over the last 20 years.
20 years ago the fund management was essentially the dullwitted offspring of the landed classes. The ones where the inbreeding impacts showed sufficiently to mean you were going to previously have to pay the Church to give them a job but by the turn of the century you could buy them seats in the Insurance or fund management industry.
The Boomers benefitted from enormous tax benefits but ran the lottery as to whether the individual(s) investing their money were either keen to work a return or whether they were stuck inside Lords pushing on a door that had 'PULL' written on it.
Even today there are still elements of this with, until quite recently, bonuses being paid for anyone who didn't end up in the lowest quartile. Which meant a fund manager had to be incredibly bad to not get a bonus, especially given the nature of the funds that were almost designed to sit at the bottom!
But, today we do have genuine transparency and investors are more switched on and with greater expectations. Plus, competition from computers has meant that Giles really can't be left to milk fees out of a hidden pot of other people's' money. That behaviour has very much moved to the alternate investment market such as the direct investment platforms.
The real problem for the industry today is two fold, firstly the tax advantages have been decimated so you need to invest a lot more to achieve comparable results of the past and secondly, the lack of yield due to a decade of zero interest rates to bail out the over leveraged. Meaning that investment strategies that should be lower risk have had to adopt high levels of risk in order to obtain what are historically low yield returns.
Of course, the simple solution is to gear your tits up on BTL. Everyone makes money from BTL and it's risk free. Except that very many such investors are highly leveraged, losing money in real terms and entering an era of both rising rates and rising property taxation.
drainbrain said:
Derek Chevalier said:
Too many variables - for example
Accrued pension point
Lifetime allowance
Taxation policy
Yield of shareholdings (possible to live off dividends alone?)
Health
Hmmm. Bit complicated for a dumbo like me m8. I'm best dealing with less variable type stuff. Y'know. You invest the money. You get an income. You pay your tax. You spend the rest. In an unvaried sequence until you die. Then the missus gets the income, pays the tax and spends the rest. Really. Like that. Monkey simple. Accrued pension point
Lifetime allowance
Taxation policy
Yield of shareholdings (possible to live off dividends alone?)
Health
Edited by drainbrain on Sunday 2nd July 21:06
When I invest in property the money has already been taxed. So £100 is only £60 in my pocket. When I invest that money in property any income is taxed before I can think of reinvesting it.
With cash in a pension wrapper £100 is £100 in the investment, any growth reinvested is also free of tax. This means that you are now compounding without any losses to tax. When you come to draw that money out you get 25% tax free, only then it's taxed as income.
I can buy and sell investments within the pension wrapper without any tax to pay, you can't do that with residential property.
I prefer a mix of both, but with high property prices and further taxes on the horizon for BTL i'm now concentrating on investing in funds through Pension and ISA's.
Edited by 98elise on Monday 3rd July 16:18
drainbrain said:
Try this:
A pension SCHEME or PLAN is a tax wrapper, the aim of which is to be used to contain investments tax advantageously in order to provide the pension INCOME at retirement. This INCOME is known, commonly, as a pension.
So when people say they're putting money into a pension what they mean is they're putting money into a plan designed to create a pension. So they're not really putting money INTO a pension, they're putting money into a plan FOR a pension.
So a pension isn't a tax wrapper at all. A pension is what the tax wrapper/plan produces.
I mean, why argue with the OED definition?
Not sure if you read the article that you linked to in your first post, but the article clearly considers a pension to include the tax wrapper in which funds are accumulated prior to retirement. Why are you now contradicting your article?A pension SCHEME or PLAN is a tax wrapper, the aim of which is to be used to contain investments tax advantageously in order to provide the pension INCOME at retirement. This INCOME is known, commonly, as a pension.
So when people say they're putting money into a pension what they mean is they're putting money into a plan designed to create a pension. So they're not really putting money INTO a pension, they're putting money into a plan FOR a pension.
So a pension isn't a tax wrapper at all. A pension is what the tax wrapper/plan produces.
I mean, why argue with the OED definition?
The government also considers a pension to be a tax wrapper, including the part prior to when income is taken in retirement, as does the financial services industry.
drainbrain said:
Well, as a pensioner I think it would be pretty pointless to start one now. But I doubt there's anything stopping anyone else doing it. Can see a bit of a problem working out which shares to self-select if you don't know anything about them. And can see a bit of a problem with the trackers when the markets lose ground. And the 'drawdown' thing carries a whiff of taxable event. But I suppose anything's better than an annuity, isn't it?
But assuming you're a pension sort of guy, can I ask you something? What would you consider to be a decent retirement income, a good retirement income, and a stunning retirement income for a 65 year old to drawdown from a SIPP?
You are getting really boring now....................But assuming you're a pension sort of guy, can I ask you something? What would you consider to be a decent retirement income, a good retirement income, and a stunning retirement income for a 65 year old to drawdown from a SIPP?
You could pick numerous examples of buy to lets where people have got it very wrong.....well done to you on the portfolio you have built up and how it works for YOU.
I have a pension and am happy how it is managed and run.
Could I have had a buy to let portfolio, YES.
Did / Do I want a buy to let portfolio, NO.
Do I know of instances where buy to let has went terribly wrong, YES.
Do I tell people that buy to let is not good, NO.
Do I know people who have a good income from their pension, YES
Do I know people who have poor return from their pension, YES.
Is buy to let safe with no risk, NO.
Is buy to let for everyone, NO
Are pensions for everyone , possibly with a mix of other investments.
Has everyone time to manage a buy to let when retired, No
Will some sell off their buy to let and live off the income from investment, YES
Could this be the investment and fund managers you are so against, YES
There is no right or wrong, just sensible retirements planning and persons taking responsibility or working with FA.
You have no experience nor the correct knowledge to continuous spout off that Pensions are not worth having, it is very dangerous and worrying you constant downing of pensions when you openly admit you don't know anything about investment.
Like anything else the person has to build up some knowledge of what he is investing in, this would be required in buy to let, it isn't something you can just do and expect to work.
Taking away the article, what is your mission regarding pensions apart from highlighting the obvious that they are not for you.
Do you want to stop pensions globally and have all concentrate on the never to fail buy to let.
DonkeyApple said:
And this clearly confuses angry old dodgy people with an axe to grind.
...Of course, the simple solution is to gear your tits up on BTL. Everyone makes money from BTL and it's risk free. Except that very many such investors are highly leveraged, losing money in real terms and entering an era of both rising rates and rising property taxation.
...Of course, the simple solution is to gear your tits up on BTL. Everyone makes money from BTL and it's risk free. Except that very many such investors are highly leveraged, losing money in real terms and entering an era of both rising rates and rising property taxation.
Jockman said:
DonkeyApple said:
And this clearly confuses angry old dodgy people with an axe to grind.
...Of course, the simple solution is to gear your tits up on BTL. Everyone makes money from BTL and it's risk free. Except that very many such investors are highly leveraged, losing money in real terms and entering an era of both rising rates and rising property taxation.
...Of course, the simple solution is to gear your tits up on BTL. Everyone makes money from BTL and it's risk free. Except that very many such investors are highly leveraged, losing money in real terms and entering an era of both rising rates and rising property taxation.
Assemble a completely unburdened btl portfolio of bmv properties then pray rising rates and other govt. hoodoos etc force a multitude of landlords out of the market thereby driving a contraction in supply of available property to rent. Then watch the parallel effect of a tightening of affordability criteria on planet mortgage.
So this great load of ex-btls arrive on an already sluggish sales market that mostly only cash buyers can obtain in a scenario of stable demand for rental property and contracted supply.....
(where's that laughing policeman smilie?)
tighnamara said:
You are getting really boring now....................
....well done to you on the portfolio you have built up and how it works for YOU.
.......you don't know anything about investment.
Taking away the article, what is your mission regarding pensions apart from highlighting the obvious that they are not for you.
Do you want to stop pensions globally and have all concentrate on the never to fail buy to let.
Hmmm. Now if EVERYBODY globally stopped investing in anything but btl and ONLY invested in btl, what would happen to rents? ....well done to you on the portfolio you have built up and how it works for YOU.
.......you don't know anything about investment.
Taking away the article, what is your mission regarding pensions apart from highlighting the obvious that they are not for you.
Do you want to stop pensions globally and have all concentrate on the never to fail buy to let.
(Mind you, there would be some amount of available cheap rental property so it would stop a bit of moaning from some quarters...)
So are you kinda hinting at my secret mission being to vastly damage - maybe even destroy - my own investment strategy?
Or are you saying that my boring post above wishing goodwill to all pensionistas both clients and management was secretly some kind of twisted PH hyena disingenuousness?
Mate, my experience of pensions (including, I might add, the state pension) is risible. And on that basis alone I am fully entitled to say that they are not for me. They're not. But I'm well aware that Fred Goodwin, many an MP and others earn very comfortable money from their pensions. Not, tho' I think Joe Average.
As to 'other people', whilst, once more - boring I know but a required clarification - if asked I would advise them that my PERSONAL EXPERIENCE with pensions is that they turned out to be a waste of time, I couldn't care less whether they decide to invest in pensions, invest in btl, or convert their entire life savings into 1p coins and stick them one by one up their anus.
Edited by drainbrain on Monday 3rd July 17:24
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