Are the masses beginning to get to grips with pensions?

[Digga]

Seems we're in a new (welcome and overdue) era of bullst-busting.

The public sector pensions debate is finally out in the open, for the great unwashed to see and now it;s the turn of the private pensions industry to feel the glare of scrutiny. See article on link and also Panorama "Who's taken my pension" tonight: http://www.bbc.co.uk/news/uk-11452857

I knew that the big banks charged well (i.e. in their own, not the consumer's favour) but was surprised about the Co-Op, given their 'ethical' target market.

BBC Article said:

The Co-Op Individual Personal Pension would take out nearly £96,000 in fees across 40 years of investment growth upon deposits of £120,000.

Is the general public in danger of (finally) beginning to understand their pension and will the outcome of all this be a more transparent private pensions industry?

[IainT]

My company pension scheme took £100M more in contribs than payments in the last FY. Plus profits of ~£40M and market growth the fun is now ~£5bn and back up over its previous peak (full recovery from 08-09).

[Digga]

musclecarmad said:

i can tell you 100% categorically that this country has a ticking timebomb on its hands and people don't realise it.

I agree.

What I'd dispute is whether the timebomb is people winding-up at retirement age to find the cupboard bare, or rather - through increased media attention - they begin to be shown how to evaluate their current position and vent their anger on the providers.

I mean let's face it, if it weren't for the income tax credit, a lot of these funds would be burning through money faster than it was coming in.

[Matt p]

musclecarmad said:

no, the public are thick, they don't even know what charges they are paying on their pensions. they don't really care where they are invested or indeed if they are in a good fund.

most don't realise they won't get their state pension till 68 and a lot aren't even claiming back the tax relief they are entitled to.

finally, they have no idea about the income they will give them in retirement.

i deal in pensions and it's the one thing that joe public have absolutely no idea whatsoever about. Yes, they know about mortgages, yes they know about savings and a few can even tell you what an ISA is for and a few rules about IHT but when it comes to pensions absolutely no one knows what they are doing!

it's what keeps me in business - if i see one person on a monday to discuss their pension by tuesday i have been referred 5 of their mates because they know i know what i'm on about.

i can tell you 100% categorically that this country has a ticking timebomb on its hands and people don't realise it.

Ok ill hold my hands up here and say I'm one of the thickos your talking about

I've not got the faintest idea where to start with a pension let alone who too take it out with.

While I appreciate your advice will probably not come cheap or free lol, could you drop me a pm with a basic outline to what I need to start doing etc, as this is something I really need to get a hold of!.

Regards

Matt

[Tiggsy]

musclecarmad said:

no, the public are thick, they don't even know what charges they are paying on their pensions. they don't really care where they are invested or indeed if they are in a good fund.

most don't realise they won't get their state pension till 68 and a lot aren't even claiming back the tax relief they are entitled to.

finally, they have no idea about the income they will give them in retirement.

i deal in pensions and it's the one thing that joe public have absolutely no idea whatsoever about. Yes, they know about mortgages, yes they know about savings and a few can even tell you what an ISA is for and a few rules about IHT but when it comes to pensions absolutely no one knows what they are doing!

it's what keeps me in business - if i see one person on a monday to discuss their pension by tuesday i have been referred 5 of their mates because they know i know what i'm on about.

i can tell you 100% categorically that this country has a ticking timebomb on its hands and people don't realise it.

Same here - people have no idea. Every day I meet people who pay hundreads a month to pensions worth hundreads of thousands...they dont know the fund, the performance....had a guy last week, £600k in a pension - he couldnt recall who it was with! His statements were in a Tesco bag, unopened. Rich, poor, smart, dumb - 90% of people I see sit in a daze when we discuss this.

And the press are no better - as that article suggests - they take a pension quote and dont understand "effect of charges" V "charges" and print nonsense. If you bought a £20k car and someone did you an "effect of cost" on that £20k till age 65 @ 7% you'd end up thinking the car cost more than your house!

[mrmr96]

Matt p said:

musclecarmad said:

no, the public are thick, they don't even know what charges they are paying on their pensions. they don't really care where they are invested or indeed if they are in a good fund.

most don't realise they won't get their state pension till 68 and a lot aren't even claiming back the tax relief they are entitled to.

finally, they have no idea about the income they will give them in retirement.

i deal in pensions and it's the one thing that joe public have absolutely no idea whatsoever about. Yes, they know about mortgages, yes they know about savings and a few can even tell you what an ISA is for and a few rules about IHT but when it comes to pensions absolutely no one knows what they are doing!

it's what keeps me in business - if i see one person on a monday to discuss their pension by tuesday i have been referred 5 of their mates because they know i know what i'm on about.

i can tell you 100% categorically that this country has a ticking timebomb on its hands and people don't realise it.

Ok ill hold my hands up here and say I'm one of the thickos your talking about

I've not got the faintest idea where to start with a pension let alone who too take it out with.

While I appreciate your advice will probably not come cheap or free lol, could you drop me a pm with a basic outline to what I need to start doing etc, as this is something I really need to get a hold of!.

Regards

Matt

Can I have free advice too please?

[Digga]

mrmr96 said:

Matt p said:

musclecarmad said:

no, the public are thick, they don't even know what charges they are paying on their pensions. they don't really care where they are invested or indeed if they are in a good fund.

most don't realise they won't get their state pension till 68 and a lot aren't even claiming back the tax relief they are entitled to.

finally, they have no idea about the income they will give them in retirement.

i deal in pensions and it's the one thing that joe public have absolutely no idea whatsoever about. Yes, they know about mortgages, yes they know about savings and a few can even tell you what an ISA is for and a few rules about IHT but when it comes to pensions absolutely no one knows what they are doing!

it's what keeps me in business - if i see one person on a monday to discuss their pension by tuesday i have been referred 5 of their mates because they know i know what i'm on about.

i can tell you 100% categorically that this country has a ticking timebomb on its hands and people don't realise it.

Ok ill hold my hands up here and say I'm one of the thickos your talking about

I've not got the faintest idea where to start with a pension let alone who too take it out with.

While I appreciate your advice will probably not come cheap or free lol, could you drop me a pm with a basic outline to what I need to start doing etc, as this is something I really need to get a hold of!.

Regards

Matt

Can I have free advice too please?

If it's free advice you're after, go to any local friendly high street bank franchise.

They'll adivse for nothing, and then rape you in the arse for years with their opaque system of fees and charges. That's the problem, in a nutshell.

[Tiggsy]

Part of the problem is the commission has fallen massively now on pensions compared to when I started 15 years ago. Back then a £50 a month payment was not a great case but it paid the petrol to see the client. Now I dont do anything under £500pm and/or £50k lump sum. This leaves the majority with no advice apart from the banks.

[Digga]

Tiggsy said:

Part of the problem is the commission has fallen massively now on pensions compared to when I started 15 years ago. Back then a £50 a month payment was not a great case but it paid the petrol to see the client. Now I dont do anything under £500pm and/or £50k lump sum. This leaves the majority with no advice apart from the banks.

And as the report indicates, this has not been serving everone all that well.

I suppose in some respects, people who didn't want to pay (fees to IFA's) for advice got what they deserved - cfrap advice from the big, bad banks - but on the other hand, if the whole process is made so complex, is it any wonder people failed to make an objective decision?

[Ozzie Osmond]

Tiggsy said:

Part of the problem is the commission has fallen massively now on pensions compared to when I started 15 years ago.

Thank goodness for that! The whole "commission" structure is about the most rotten part of the entire system.

The whole concept of "advice" is reliant on people being able to understand and evaluate that advice. The chances of that actually happening are just about nil. New Labia failed utterly and completely to see through their attempt to launch Stakeholder Pensions with - above all - low costs. The government gives generous tax relief, individuals think they can benefit from it, but the industry picks their pockets with fees, commissions and charges. Great shame. Needs fixing.

Public sector pensions need urgent and radical cut-back. My bet is the government will try to do this via the back door by fiddling the figures (for instance CPI instead of LPI was a starter) and inflating its way out of trouble.

[Randy Winkman]

Ozzie Osmond said:

Public sector pensions need urgent and radical cut-back. My bet is the government will try to do this via the back door by fiddling the figures (for instance CPI instead of LPI was a starter) and inflating its way out of trouble.

Is it a good idea to make things more equal by bringing everyone down to the same level? I thought that was what socialists were supposed to do.

[EDLT]

mrmr96 said:

Matt p said:

musclecarmad said:

no, the public are thick, they don't even know what charges they are paying on their pensions. they don't really care where they are invested or indeed if they are in a good fund.

most don't realise they won't get their state pension till 68 and a lot aren't even claiming back the tax relief they are entitled to.

finally, they have no idea about the income they will give them in retirement.

i deal in pensions and it's the one thing that joe public have absolutely no idea whatsoever about. Yes, they know about mortgages, yes they know about savings and a few can even tell you what an ISA is for and a few rules about IHT but when it comes to pensions absolutely no one knows what they are doing!

it's what keeps me in business - if i see one person on a monday to discuss their pension by tuesday i have been referred 5 of their mates because they know i know what i'm on about.

i can tell you 100% categorically that this country has a ticking timebomb on its hands and people don't realise it.

Ok ill hold my hands up here and say I'm one of the thickos your talking about

I've not got the faintest idea where to start with a pension let alone who too take it out with.

While I appreciate your advice will probably not come cheap or free lol, could you drop me a pm with a basic outline to what I need to start doing etc, as this is something I really need to get a hold of!.

Regards

Matt

Can I have free advice too please?

Will this do?
http://www.moneysavingexpert.com/savings/discount-...

There are plenty of knowledgeable people on the forum too.

[Matt p]

musclecarmad said:

I'll give advice to anyone even if they want to pay £50 per month into a pension as i like helping and am very well qualified in this area.

granted, it won't pay for my porka but just pm me if you like.

essentially how I operate is this:

i'll tell you what i think and give you free hints and tips and so on and tell you where the good funds are and review your existing pensions for you and let you know the past performance and charges and so on.
i'll put you in the informed position but if you do anything through me I WILL get a commission which i'll tell you how much it is.

as someone else said it's normally not great unless we are talking £1k per month plus into a pension but i don't mind and i'll do it for you anyway.

you can go online and get pensions cheaper and if out and out cost is important to you then do that, but if you want ongoing advice, a human at the end of the phone to talk to and who will get in touch with you when pension legislation changes and will review stuff for you regularly for you then give me a shout. There is no set up charge/exit charge/fee for my time etc but if you put say £50 per month into a pension an adviser will get a (small) commission.

also, when you come to taking your pension benefits that's also when you need advice and people don't realise this too.

That's grand

I'll be getting in touch via pm to get this going and what will be the right amount to start paying in.

Regards

Matt

[otherman]

Digga said:

BBC Article said:

The Co-Op Individual Personal Pension would take out nearly £96,000 in fees across 40 years of investment growth upon deposits of £120,000.

The BBC should be shot for that kind of missinformation. The actual fees on the fund they mention are 2% per annum. It is actually possible to derive the panorama figures from this fact, but only if you are deliberately intending to paint the blackest possible and totally missleading picture of a long term investment.

[otherman]

IainT said:

My company pension scheme took £100M more in contribs than payments in the last FY. Plus profits of ~£40M and market growth the fun is now ~£5bn and back up over its previous peak (full recovery from 08-09).

The take vs the payout isn't any sort of measure of the fund stability though, if that's what you're suggesting. The annual take should be compared to the new liabilities that were earned in that year.

To illustrate this more easily, imagine a company that opens up a new pension fund for its 1000 employees. It takes 6% each off them total say about £2million. They won't have to pay out a thing til someone retires, but they're building up a liability to pay all those people their pensions on retirement - and they're going to need a big wedge invested to pay them for their 20 years of retirement.

[Tiggsy]

otherman said:

Digga said:

BBC Article said:

The Co-Op Individual Personal Pension would take out nearly £96,000 in fees across 40 years of investment growth upon deposits of £120,000.

The BBC should be shot for that kind of missinformation. The actual fees on the fund they mention are 2% per annum. It is actually possible to derive the panorama figures from this fact, but only if you are deliberately intending to paint the blackest possible and totally missleading picture of a long term investment.

this

Stupid nonsense like that, coupled with few advisers left willing to help the majority = pension time bomb.

[y282]

what about government pensions? i lecture at a college and have been on the local government pension initially and now the teachers pension scheme. is it any good or am i getting done in the showers?

[DonkeyApple]

musclecarmad said:

i can tell you 100% categorically that this country has a ticking timebomb on its hands and people don't realise it.

I can 100% agree with that.

It doesn't help that the whole pension system is fundamentally over complicated for starters.

It is as if it has been designed to confuse and befuddle. I work in finance and to be frank I will never comprehend all the various vaguaries of different types of pension.

Added to that the costs are comical, almost as comical as the performance. The benchmarks are rigged, the managers are mostly crap and the compliance restrictions on funds mean that managers have restrictions put on them that force them to invest badly.

If you look at the commercial property side alone, managers have to invest their cash within a set timeframe which means that they are forced into bidding wars with other managers for properties that neither party wants at the list price let alone the fact that they have to bid over that to get it onto their books.

Then, looking at the management side it is truly shocking. Architects, designers, managers have all been having it away for the last decade stripping all the profit out of the assets, sweating the st out of them. Not deliberately but because no one is in the loop to stop them.

I've seen £150K reception desks fitted to £12/sq ft out of town crappy business suites simply because the architect believed it looked good and no one had the ability to to point out that a £10k desk would more than suffice for such a property.

5 years ago I vhastly simplified my pensions and simply use a spread of ETFs in a self managed SIPP. It works out incredibly cheap and performance is better than nearly all funds because I am not stripping fees and charges out left right and centre.

This is a massive disaster that will hit our generation, who have already spent their next 10 years income via debt, are not putting enough into their pensions and when they do it is badly managed.

Most people who are 30-40 now will die in squaller as their finances collapse shortly after retirement.

[Ponk]

Well judging by my day to day dealings with the employees of an incredibly diverse company i think the answer is yes. The new generation (e.g. 80s/early 90s kids) are slowly realising that they need to do something now or they wont have a pot to piss in at retirement. Gone are the days of the non-contributory or cheap Final Salary scheme for most.

The older generations seem to have a deep mistrust of IFAs, i'm not sure if the whole mis-selling scandal might be at least partially responsible for that? I was 5 then so couldn't say for definate.

I still find it strange that people will quite happily pay out for mortgage advisors but wont spend a penny on advice for their retirement.

[y282]

musclecarmad said:

y282 said:

what about government pensions? i lecture at a college and have been on the local government pension initially and now the teachers pension scheme. is it any good or am i getting done in the showers?

you sir, are a wonderfully lucky man and you have an amazing pension!!

really?

er, i mean yes. yes i meant to do that.

ok i admit it, i have NO idea what any of it means.