I am losing faith in pensions.

Why would the government allow private companies to take over? How can they be any better? This is by no mean to guarrentee that particular pension company would go bust and then what? It has happened to a well know company and I believe more eventually will head that direction when the retirement generation comes into the picture for these private companies.

I was talking to a retired gent a few months back and he put a lot away into private pensions and he only gets something like £12 more than if you get it from the government. His argument was, the amount of money he put into pensions would have been better either spent, invested personally or put into a savings account for a rainy day.

I've got 3 pensions and completely confused with mountain of paperwork. I can't transfer otherwise I lose 20% (Greedy or what) if I do so.

Is anyone worried about the future of where pensions are heading?

No John,

I gave up the idea of a Pension years ago when I first started (trying!) to make my fortune working for myself as a software engineer - my initial (company) pension was frozen and I didn't bother to start a private one to replace it...

Now the company pension is worthless and ever since the Maxwell disaster I've had zero confidence in the whole field - I'm determined to work my way to financial independance before retirement age - and not rely on the state or luck.

I'm happy with my own situation but it's criminal for the rest of the working population not to have good solid information about how to look after themselves long term.

I've heard most people think their best chance of financial security is doing the lottery. :mad:

I've got a money purchase plan, which is like doing the lottery only more expensive.


Out of curiosity, how are you planning to be financially secure at retirement if you haven't got a pension?

instead of paying into a pension i would set up a new bank acount with the highest intrest possible and pay into that, because
A) if you need the money before your pension age you could pitch in and borrow some and
B) The money wont decrease in value, only increase

my ideas

Fletch

Unfortunately Fletch, money DOES decrease in value over a surprisingly short period of time. That is why you could buy a brand new house 40 years ago for £2,000.

but not in a bank does it??

Yes it does Fletch.

How and why?? please explain

because if i put £50 in the bank now i could swear that in about 50 years i would have about £150

is it not the consumer products that increase in value and not the money decreases in value

Because (and without doing any calculations) that £50 may well be £150, but it will only be worth £10 when you go in the shop compared to prices on the day when you invested it. It's a mixture of inflation and devaluation.

Look at it this way...

1950 - buy a house for £1,000 and a posh leather jacket for £5
2004 - buy a house for £200,000 (1000 x 200) and a posh leather jacket for £1,000 (1,000 x 200)

1950 - put £50 in the bank
2000 - £50 is worth £150 (50 x 3)

Do you see how money goes down in value but not amount? It just buys you less over time, therefore it is worth less. The trick is to invest it into things that go up in value faster than money goes down like property.

On the above (albeit inaccurate) example, your £50 is now £150 after 50 years. However, it is only worth £150 / 200. Yep, your £50 (or £150 as it now is) is now worth 75p of buying power at todays prices.

but is that not the products going up in price??? not the money going down??

Same difference. Your money will buy you less. If you put it in your account you'll get very little interest on it compared to the rise in prices. If you have £150 in your account now it'll buy you a lot more now than in 10 years time. The only way round this is to invest your savings. I'd reccomend a mini ISA as you can't lose money, the savings aren't taxed and you get a much higher rate of interest than in normal accounts.

Originally posted by Funky Dave
I'd reccomend a mini ISA as you can't lose money, the savings aren't taxed and you get a much higher rate of interest than in normal accounts.

Some ISAs can lose money - all depends on what type of ISA it is.

The thing about pension schemes is, your money is pooled with everyone elses. Because there's more money, it can be invested in a wider range of things, meaning risk is spread.

To get a good rate of return, you have to be prepared to take some risk. It's just a trade off between how big a return you want to see, and how much of a risk you are prepared to take.

Don't forget that paying the money in to a pension fund also attracts tax relief - i.e. for every £100 you pay in the tax man puts an extra £22 (or whatever) in for you.

Originally posted by Andy
Some ISAs can lose money - all depends on what type of ISA it is.



I think he was referring to a cash ISA.

Sir Trevor McDonut is doing a program on the pensions crisis on ITV in around 7 mins :D