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Are you in?

Community Veteran
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Registered: 01-08-2007

Are you in?

Just seen the latest government propaganda on TV about workplace pensions..
Apparently these are so good that when you pay in your boss pays in too. Not just that but its a government run thing so it's obviously 100% safe and the funds won't be ransacked at all and they won't even think about it in the slightest  Crazy
So.. when George Osborne was on TV earlier in the year talking about that new Tube service, why was he talking about getting pension providers to 'invest' money in government projects then if they don't want pension money? Anyone else smell a rather large stinking rat?
By the time I get to retirement age I very much doubt there will be a pension for me or anyone else my age anyway.
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16 REPLIES
Community Veteran
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Registered: 24-09-2008

Re: Are you in?

Pension providers have a management charge of around 4% of the "total amount in the fund" + any dealing charges with the buying and selling of assets. So with average growth currently running at 0%, and inflation above 2% your currently looking at loosing money at the rate of 4-6% per annum, admittedly an employer would have 'thrown in' his bit. I think it would be better to 'opt out' and renegotiate your contract with your employer to include his bit of the pension in your salary.
I not sure if tax relief on pension contributions is all it’s cracked up to be. My sister (a retired head teacher), claims she is paying more tax on her teachers pension than the relief gained on the contributions (month on month basis). I argue it is a little unfair as she is on a 2/3 final-salary scheme as the pension bears no relationship (in real terms) to the amount contributed.
Community Veteran
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Re: Are you in?

It's a right racket.
What the government are really saying is save as much as you can into a pension but we can change the rules whenever we like.
If you do end up with a small pension that will save us having to top up your state pension to provide you with a minimum amount of money.
Even if you end up with a reasonable pension we will Tax it like mad and if you end up in a Nursing/Rest home and have any assets above a certain sum we will use those to pay for your care.
Based on past events would you trust this or any other government or financial institution ?
Community Veteran
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Re: Are you in?

Quote from: journeys
I think it would be better to 'opt out' and renegotiate your contract with your employer to include his bit of the pension in your salary.

I think you need to read the rules of your company scheme to see if there is any option to change your arrangements.  it seems unlikely an employer will be happy to vary terms for individuals.
Community Veteran
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Re: Are you in?

I give a wry smile whenever I hear a Government Minister/Official saying that working people should save in a pension scheme. In the UK. Not only are there the fund sapping administration fees (much higher than those charged in Europe), but we also have Gordon Brown's raid on the pension funds through a tax on trading charges ~ circa £5 Billion a year. There is of course the base bank interest rate held low by the Bank of England which hits the pensioners who have saved for their retirement. Then, to cap it all, is Quantitative Easing which has the effect of reducing the yield of the investments used by insurers to pay for pension annuity payments to pensioners.
The Establishment seem to be working hard introducing schemes to hit the people who save for their retirement. These actual and prospective pensioners kept their part of the social contract and during their working lives funded the pensioners at the time through tax and National Insurance, but now we are told we are a burden on the State. Grrrr!
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Community Veteran
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Registered: 12-08-2007

Re: Are you in?

I have a number of friends who put their money into property which they let out.  Apart from getting a regular income they also have a property that is increasing in value.
itsme
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Re: Are you in?

Quote from: artmo
Quote from: journeys
I think it would be better to 'opt out' and renegotiate your contract with your employer to include his bit of the pension in your salary.

I think you need to read the rules of your company scheme to see if there is any option to change your arrangements.  it seems unlikely an employer will be happy to vary terms for individuals.

You can't completely opt out and get the money but I believe the rules are either a company or private pension schemes. I know that I was offered and took the option for the company to pay into a private scheme. Company pensions always are better than private but how many employees will be in the same job until they retire? The main disadvantages going into a private over a company pension are 1, No death in service benefit which normally is 3 times salary 2, Not normally final salary but how many companies are offering that now?
My company completely messed up one part of the pension contributions as it's normal to contract out of SERPs and this goes into a company final salary pension scheme. As I was already contracted out with the money going into a private scheme I noticed after a couple of years that no contributions were not going in. After investigation I found that the company contracted me in than out and the payments were going to the company pension scheme were I would get not benefit.
kmilburn
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Re: Are you in?

It sounds like you were still contracted out,  but the employers scheme had taken precedence with the money going to them instead of your private scheme. 
If you were contracted in,  neither account would see the money as it counts towards the SERPS entitlement..
What hasn't helped since April,  the government have changed the rules and you can no longer contract out with private schemes.
I liked to contract out as (with others) have minimal expectation of SERPS (or related) schemes being around in 30 years,  so would much rather have the money under my control now!
Community Veteran
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Re: Are you in?

The government should just come clean and say this is just another scheme to fill the ever growing public sector pension black hole.
St3
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Re: Are you in?

Well ill be honest here, my job does not have any pension scheme and maybe i think wrong to everyone else. But i dont worry about the future i live for today, after all the stuff i see and hear about in this messed up world i dont care!
Yes i "might" regret it later on in life... but by then ill be ready for the rubbish bin anyways... im in my 30`s and ill prob be working till im 90 anyways, with the way the goverment keeps changing everything.
I mean look at all those people who have pension problems now and those who were sold dodgy endowments.... but were told everything is safe...

Live for today F... tomorrow Smiley ( unless u have kids to worry about )
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Community Veteran
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Registered: 02-08-2007

Re: Are you in?

Good Advice ! Wink
Community Veteran
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Re: Are you in?

Poor advice IMO.  If you make no provision for old age you rely on those of us who did to pay for you.  The State pension barely provides enough to get by on in a very basic manner.
Community Veteran
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Re: Are you in?

Quote from: ukste20
Yes i "might" regret it later on in life... but by then ill be ready for the rubbish bin anyways... im in my 30`s and ill prob be working till im 90 anyways, with the way the goverment keeps changing everything.
I mean look at all those people who have pension problems now and those who were sold dodgy endowments.... but were told everything is safe...

Exactly the way I see it too.
Quote from: artmo
If you make no provision for old age you rely on those of us who did to pay for you.

What.. the rich people who milked the poor all their lives to satisfy their greed? Well, when you think of it like that artmo it doesn't sound too bad really does it! We look after the rich all our lives so they can look after us at the end of ours. Something rather gratifying about that don't you think?  Smiley
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kmilburn
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Re: Are you in?

I'm not sure it's gratifying to live on the basic state pension and nothing else.
Making hardship for yourself in later life isn't exactly sticking it to the man either!
Community Veteran
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Registered: 01-08-2007

Re: Are you in?

We little people don't need to make life harder for ourselves. The government will do that anyway.
There is a saying.. history repeats itself. Look back at the pensions scandals  Wink
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