Private pensions

[greencreeper]

My company doesn't have a pension scheme. I've been thinking about starting one for a while now. I do have a few quid in a scheme from when I worked for my Uni. I just don't understand all the options and the pros and cons. I thought maybe I should see an advisor but how to choose one I've had a look and it would just be a totally random thing. I don't understand what the different advisors do and the products they sell - the differences. I also feel a bit of a tit with my not having millions to invest in some dodgy off-shore deal. If I get old, I don't want to be choosing between eating and keeping warm.

Any advisors in Leeds/West Yorkshire that are trustworthy, or are they all sharks like estate agents and job agencies?

[Graham M]

Can you not go to your bank for advice on this?

[greencreeper]

Originally Posted by Zeph

Can you not go to your bank for advice on this?

Not sure. I would have thought they'd sell me the product(s) in their best interests rather than mine.

[driver_problems]

Originally Posted by greencreeper

My company doesn't have a pension scheme. I've been thinking about starting one for a while now. I do have a few quid in a scheme from when I worked for my Uni. I just don't understand all the options and the pros and cons. I thought maybe I should see an advisor but how to choose one I've had a look and it would just be a totally random thing. I don't understand what the different advisors do and the products they sell - the differences. I also feel a bit of a tit with my not having millions to invest in some dodgy off-shore deal. If I get old, I don't want to be choosing between eating and keeping warm.

Any advisors in Leeds/West Yorkshire that are trustworthy, or are they all sharks like estate agents and job agencies?

one thing to bear in mind when they say you have to pay 'such and such' an amount each month is that that amount will go up considerably each and every year. Thats a thing that no-one will point out to you in clear and coherent language

approach your local citizens advice bureau for independent financial advisers
also

http://www.moneysavingexpert.com/

---------- Post added at 23:38 ---------- Previous post was at 23:26 ----------

Bear in mind that a pension is just a savings scheme, the benefit you get at the end depends on the terms of the scheme.

that is why being swapped from a 'final salary' to a 'money purchase' scheme is not fair - the first has a 'defined benefit', the latter, does not...

- I would want the same guarantee in a private scheme, myself,

[pedantic]

Originally Posted by greencreeper

My company doesn't have a pension scheme. I've been thinking about starting one for a while now. I do have a few quid in a scheme from when I worked for my Uni. I just don't understand all the options and the pros and cons. I thought maybe I should see an advisor but how to choose one I've had a look and it would just be a totally random thing. I don't understand what the different advisors do and the products they sell - the differences. I also feel a bit of a tit with my not having millions to invest in some dodgy off-shore deal. If I get old, I don't want to be choosing between eating and keeping warm.

Any advisors in Leeds/West Yorkshire that are trustworthy, or are they all sharks like estate agents and job agencies?

Isa's are the way to go imho, your bank will be able to advise you, go and have a chat with your banks advisor. There are some good pensions out there, but the thing I don't like about them is if you do need cash you can't withdraw from them. You can have a mini cash isa, which you can invest £3,000 per year, or a maxi isa, which (the last time I checked) you can invest £7,000 per year. Also, you could look into a stocks and shares isa. I currently have one (as well as a cash isa) where I invest £600 per year. Again, it's up to you how much you can invest, but the limits are the same as a cash isa. Bond's also have good returns, but once again (depending on the type of bond) you have to invest a lump sum, and you can't touch it until the end of the set period (no good if you need to lay your hands on some cash). Isa's are attractive because you don't pay tax on your interest.

[orangebird]

Don't do it. Unless you live to 109 or something daft, you'll never get back what you put in. You're better off with a very good savings account, or a biscuit tin under your bed IMO.

[etccarmageddon]

little mate this private pension thing is a CON. firstly those who dont put money away get more help from the state when they retire, secondly when they CON you into putting away money cos it's tax free they dont mention that you are TAXED when you draw your pension. stick it in an ISA.

[driver_problems]

I got talked into setting one up about 15 years back and only ever contributed a few hundred quid into it for reasons that are too boring to go into. I asked if they would hand over what I had already paid in - they said they would not or could not. I could only transfer it to another 'fund' apparently. The upshot of it all was a couple of years back I recieved a "lapse notice" which meant that my 'fund' had been administered into oblivion and was no more.

[skyblueheroes]

Originally Posted by driver_problems

one thing to bear in mind when they say you have to pay 'such and such' an amount each month is that that amount will go up considerably each and every year. Thats a thing that no-one will point out to you in clear and coherent language

Not strictly true.

You can choose whether to increase with RPI or not. Course if you don't then the true value of your contributions are less each year.

I used to work for a Pension company and have my FPC1,2 and 3 and I won't buy a pension. The true annuity rates are shocking and the charges imposed (if not a Stakeholder) are horrendous. Where I used to work, if someone stopped paying into their pension after 5 or so years, they wouldn't have any fund value left at retirement due to charges !

Anyway, I agree with above, max into an ISA if you can.

Originally Posted by etccarmageddon

little mate this private pension thing is a CON. firstly those who dont put money away get more help from the state when they retire, secondly when they CON you into putting away money cos it's tax free they dont mention that you are TAXED when you draw your pension. stick it in an ISA.

Swings & roundabouts, really, as pension contributions are made before tax, while ISA contributions are made out of already taxed income.

For someone on higher rate tax, paying into a pension, now, whose eventual payout will be below the higher tax threshold, that could make a difference.

Crucially, though, any savings scheme, no matter how it is dressed up, depends on the performance of the investment - if the stock market crashes the day before you are due to buy an annuity, etc, then bang goes your savings.....

[Wicked_and_Crazy]

Originally Posted by orangebird

Don't do it. Unless you live to 109 or something daft, you'll never get back what you put in. You're better off with a very good savings account, or a biscuit tin under your bed IMO.

Thats why your not a financial advisor!

What other savings facility allows you to take 25% of your fund as cash and TAX FREE!!! and your contributions come from your pre taxed pay. Therefore you win both ways with 25% of your fund.

[etccarmageddon]

unlike an ISA you can not get your funds out prior to retirement.

[orangebird]

Originally Posted by Wicked_and_Crazy

Thats why your not a financial advisor!

Are you?

What other savings facility allows you to take 25% of your fund as cash and TAX FREE!!!

The biscuit tin under my bed.

and your contributions come from your pre taxed pay. Therefore you win both ways with 25% of your fund.

That'd be the same system then, that if I die, my husband only receives (on average) 1/3 of what I was entitled to as a reversionary rate - WTF??? Where does the rest of tyhe money I put away for 40 years go? I used to work in Pensions for Lloyds TSB. Bloody rip offs, the lot of them.

Originally Posted by Zeph

Can you not go to your bank for advice on this?

I wouldn't, bank advisors are restricted to only giving advice on the products that they sell, while independent advisors can look at the whole market. Pensions are very nice earners for bank based financial advisors, as their commission on the sale is calculated on the notional term of the agreement, so they will probably be fairly anxious to make sure you get what is best - for them .

As I said, the CAB will have a list of reputable independent advisors.