10% pension

[wjwren]

Bloke at work says he is putting £100k in a 'pension' for 2 years and getting £50k out of it. He talks a fair bit of crap and this is not obviously 10% so maths isnt his strong point.
Out of interest on a short term pension what % would be deemed good?

[Mr Pointy]

how old is he?

[wjwren]

39

[wjwren]

He said a Fin advisor as told him he can make £50k. Im now wondering if he is getting scammed.

[JulianPH]

It certainly sounds like a complete scam. PM me if you would like me to assist saving him being parted with a lot of money.

[The Dictator]

As a Wealth Manager/Financial Adviser under the SJP umbrella, I can honestly say that sounds extremely questionable.

There are limits to the amount you can contribute to a pension annually whilst still retaining the uplift from the Government, this depends upon your circumstances, but tops out at £40,000 annually.

That said he may have some carry forward available from previous tax years which could possibly take it over £100k


The biggest red flag though is being told what he can make, you can not make any assurances of return. You can demonstrate historical return, but that is no indicator of future performance.

[Mr Pointy]

wjwren said:

39

Well if it's a pension investment he can't get access to it until he's 57 (currently, may be even later in the future) so there's a an immediate potential issue there. 50% gain in 18 years is quite doable but not in two. As others have indicated it sounds very suspicious.

There's no such thing as a short-term pension unless your colleague plans on dying in two years time but that's a rather extreme withdrawal mechanism.

[JulianPH]

wjwren said:

Bloke at work says he is putting £100k in a 'pension' for 2 years and getting £50k out of it. He talks a fair bit of crap and this is not obviously 10% so maths isnt his strong point.
Out of interest on a short term pension what % would be deemed good?

Just to add, there is no such thing as a short term pension for someone who is 39. They won't be getting anything out of it until they are 57.

Taking anything out before then is call Pension Liberation and will cost him a fortune in taxes and be an absolute nightmare when HMRC find out (which they will).

Is the adviser FCA regulated and who is the magic pension provider?

As I said, PM me if you want to chat without giving details here, but it sounds like he is being scammed and will end up losing every penny.

[JulianPH]

Mr Pointy said:

wjwren said:

39

Well if it's a pension investment he can't get access to it until he's 57 (currently, may be even later in the future) so there's a an immediate potential issue there. 50% gain in 18 years is quite doable but not in two. As others have indicated it sounds very suspicious.

There's no such thing as a short-term pension unless your colleague plans on dying in two years time but that's a rather extreme withdrawal mechanism.

Great minds and all that! We were obviously writing the same thing at the same time!

[rsbmw]

To be fair £50k in 2 years is entirely realistic, £40k from tax relief and another 10% in growth, very feasible.

What he can't do however is get the money back until 57

[JulianPH]

rsbmw said:

To be fair £50k in 2 years is entirely realistic, £40k from tax relief and another 10% in growth, very feasible.

What he can't do however is get the money back until 57

I had thought the same thing in that the higher rate tax relief on a £100k investment would be exactly £50k (not £40k), but it doesn't take 2 years to achieve this, so I dismissed it.

[Caddyshack]

I too assumed that he was talking about the tax relief.