Getting the FTSE / Personal Pension into perspective

[srebbe64]

I'm not one for dabbling in shares of which I don't have some control over so for many years I resisted the logic of a pension. However, last year I had a fatal dose of common sense and I decided to invest in a pension. As such, in the last 12 months (or so) I have invested the maximum allowed. Now here's the thing. We're currently in a 'bear' market which means that the FTSE is more than 20% down on its highest recent level. Well guess what, I started investing in my pension when the FTSE was at its highest level! With much trepidation today I checked the value of my pension and it's 10% less than what I've stuffed into it (so, to be fair to the fund managers they're beating the market!) Was I depressed? No. Reason being, had I have paid the same monies to myself by way of bonuses I would have received (circa) 55% after Tax and NI. As such, even in a truly terrible market the Tax breaks ensure that you remain well ahead of the thieving leaches, otherwise known as HMRC. Here endeth the lesson!

[Ade355]

true, but you'll pay some tax when you draw from your pension so factor that in

[edb49]

I've always looked at pensions like insurance - better to have the money more liquid so you can invest and cover eventualities yourself. That being said I've religiously done the £7k + £2808 every year since I was 18, to get the tax benefit. It probably is sensible, but I don't like it.

[JamieBeeston]

edb49 said:

I've always looked at pensions like insurance - better to have the money more liquid so you can invest and cover eventualities yourself. That being said I've religiously done the £7k + £2808 every year since I was 18, to get the tax benefit. It probably is sensible, but I don't like it.

Ditto,

I used to pay the full 15% (10% with employer matching first 5%) into my pension.. then I realised that the money would be much better off investing in me / my investments than with some fund manager, who may make a decent amount for me, but which I couldn't touch for another 30 years minimum and if I did then, it'd be worth a pittance of what it would be if I left it until 65..

Pensions make sense for some I'm sure.. but I don't see them working for Small business owners / entrepreneurs who arent within spitting distance of being able to draw them.

J

[srebbe64]

My own view is that I like a spread of investments (properties, business, pension, etc..)