Can someone briefly explain pensions?

Helium_Junkie

Helium_Junkie

Helium_Junkie

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So I think I'm past the age I should have started a pension (24.5) but I'm only just in the financial state to do so.
Problem is, I havent the foggiest where to start, and am worried about all the talk of pensions not being worthwhile that I have heard.
I tried reading the basics from a banks help pages but it just confused me further...

Could anyone please describe the basics of a pension? Things like what types of pension there are would be nice, and who to get them from. Are there specialist pension companies, or the banks the best bet?

I'd appreciate any advice.

Thanks!
 
Basically, you put into a fund which (supposed) to mature into enough money to buy an annuity. The annuity is a product which supplies you an income on retirement. So you don't have to invest your money into a pension scheme to buy an annuity.. you can invest yourself, or buy property. The advantage of putting into a pension scheme is that it's tax free.. but then so are ISAs etc..

The problem is that you have to put into a pot for a large number of years. It's no good putting a fiver in every week from the age of 31 and saying "I have a pension fund". I was putting in £100 since 19 and only stopped 6 years ago on £250 per month and even then it is no where near the target I need. It's sad, but most of us will never have enough money or pension fund to buy a decent annuity. To get round this, you can buy an unsecured annuity you get a decent pension but should you die week one of your pension, they get the all funds and are quids in.

If you are fortunate to buy an decent annuity, then you can buy a secured annuity, which means any money in the funds is inherited (subject to further taxation).

If your company offers any sort of pension scheme then take it... if not don't bother.. Pay the money off your mortgage as quickly as you can then invest in a property for you retirement. Go and see an independent advisor and don't just speak to one.

Serously, think hard about this.. I got caught in two major pension disasters and I've lost £££££ on what was supposed to be a safe investment.
 
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Basically you give a big corporation money each month hoping that when you want to stop working at 80 you will have enough money left for your Werther Originals and that the tax man hasn't nicked all of it :) You then wonder why you did it, and wish you had spent the money on sweets instead :D
 
Baz said:
Basically you give a big corporation money each month hoping that when you want to stop working at 80 you will have enough money left for your Werther Originals and that the tax man hasn't nicked all of it :) You then wonder why you did it, and wish you had spent the money on sweets instead :D
Click to expand...

:D yes I'd prefer the sweets
 
Just get a job with your local council & they will give you a good pension at 60 straight out of the council tax the rest of us have to pay
 
Pensions are nothing mate, stay well clear of them. I never entered into one so can only blame myself when im 67. To get to that age after paying £250+ every month and be told 'sorry its all gone' would make me not too happy.

Im only 29, but a good work pal is 50 and has been paying into a pension all his life. He got a letter saying his return was only making 4% and not the 12% or so they predicted it would. So they said it was upto him to pay extra for the shortfall in interest. He wasnt too happy as the company it was with was showing 12+% for their share holders. He rang them up and told the bloke on the phone to get the guy who's handling the share holders money to look after his pension. lol

He regrets putting in so much money into a 'gamble' fund up to now.

ITS A CON!
 
I now have 5 different pensions for 2 main reasons:-

1. Companies changing their pension providers
2. Redundancy

I'm now left with money in each fund just being eaten away by fees but moving them all to 1 fund is also loaded with fees and losses :(

The pension system in this country is completely and utterly ****** :mad:

HEADRAT
 
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Usher said:
Just get a job with your local council & they will give you a good pension at 60 straight out of the council tax the rest of us have to pay
Click to expand...




A pension indexed linked to a below-average salary will remain a below-average pension. Stop being silly and hijacking the thread with Daily Mail editorials.


M
 
I was paying into a couple of different pension for about 5 years - I don't any more, in fact I haven't for two years now.

Can I get the money I put into the pension funds back?
 
Oh how I love the amount of Financial Advisors on these forums. I'm really astounded by the accuracy and non-biased quotes which are well regulated ;)

If you have enough money to spare, stick some of it in a personal pension - especially if your employer is willing to stick in some too.

My pension fund is worth £35,000 (after paying in for 10 years and average £70 a month)
Its with Scottish widows (and at best was paying 9.2% return per year - far better than any savings account) - I can check on it every day via their website, and see which funds they are buying with my money.

That said, I also have saving in tax free accounts - which give me returns of approx 6%.

I plan on having £250,000 in a pension fund and the same in savings at retirement (53) - So 1/2million
And don't forget that 500,000 will only be worth 233,487 in 25 years time (if inflation stays at 3%)
 
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So you are going to retire at 53 with 233,487, if you live until your are say 80 that will be approx 8647 per year!

The average council tax bill now is for a band D house currently £1,167

http://society.guardian.co.uk/publicfinances/story/0,,1714497,00.html

let's say these rise by 3% per year, in 17 years time yo will be paying nearly 2K for council tax leaving you approx 6K a year to live on!!

I think you either need to retire later or save a great deal more ;)
 
It is hard to give accurate information, I am a little stiched up because me and the wife will not get the state pension now until we are 68 so the government has done us out of nearly 30k over the 3 years we have lost the pension for.

At last count of a salary of £20k a year if I stayed in local government my pension is worth:

£33k lump sum
£11k a year.

I am now on £30K a year so that figure will raise over the coming years, that figure is based on 41 years service.


The easiest way of looking at it is, if you retire at 65 with no pension, I.e. you will not get the state pension until you are 67 or 68 at the moment, what will you do with them 3 years as you wont have any money apart from savings.
 
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