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Pension ? Don't bank on it.

Infinity
Pro
Posts: 5,601
Thanks: 148
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Registered: 19-06-2011

Pension ? Don't bank on it.


Annuity rates now so bad you'd have to live to 90 to get value for money

Low interest rates and rising life expectancy are pushing rates down.
Which is why people have always, and will continue to do so, invest in Property.

http://www.dailymail.co.uk/news/article-2390732/Millions-forced-pension-gamble-Annuity-rates-bad-you...
10 REPLIES
Thunderclap
Grafter
Posts: 673
Registered: 08-09-2008

Re: Pension ? Don't bank on it.

A pension is merely a promise that someone else will invest the money paid by you into their scheme so that, future revenues generated from their wise investment of their money, will pay you a return at a rate that exceeds the revenue you could receive by investing your money in your own investment portfolio. This assumes the pension scheme trustees didn't burn all of the schemes funds by having a very good time for thirty years. Given how trustlessworthy the financial services sector has become, this is why most people are opting for a "safe as houses" pension plan.
Community Veteran
Posts: 7,149
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Registered: 30-08-2007

Re: Pension ? Don't bank on it.

I get really annoyed about the pension problems, state or private.
There was a well documented baby-boom just after world war 2, its been known about for over sixty years now, but only in the last ten or so has any administration taken seriously that it was going to be a serious problem.
The wise did something about it themselves, a minority unfortunately and some of those who did are coming unstuck now. Very many couldn't afford to, probably many more than that ignored it in the hopes that the successive governments would sort it out...some hopes!!
I actually feel very sorry for the forty and fifty year old's now, your retirement provision is going to cost you a fortune, and not be worth that much when you need it. Taxes have got to rise sharply to cover state pension costs, that's of course always assuming that the entire pension system doesn't go private in the foreseeable future.
Experience; is something you gain, just after you needed it most.

When faced with two choices, simply toss a coin. It works not because it settles the question for you. But because in that brief moment while the coin is in the air. You suddenly know what you are hoping for.
itsme
Grafter
Posts: 5,924
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Registered: 07-04-2007

Re: Pension ? Don't bank on it.

8 years ago I asked the Financial Controller at the company that I worked whether the company's final salary scheme was funded. He sad that it was and the actuaries confirmed this the previous month. 6 months later he was livid after a meeting with the actuaries when he was informed that the pension was under funded as the population was living 5 years longer. So in 7 months the life expectancy jumped by 5 years  Shocked
Infinity
Pro
Posts: 5,601
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Registered: 19-06-2011

Re: Pension ? Don't bank on it.

itsme
Grafter
Posts: 5,924
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Registered: 07-04-2007

Re: Pension ? Don't bank on it.

The ridiculously high fees paid when contributing to a pension scheme also need looking into.
Community Veteran
Posts: 13,923
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Registered: 01-08-2007

Re: Pension ? Don't bank on it.

The bottom line with pensions is this:
Someone WANTS YOUR MONEY claiming they'll give it back to you when you need it.
Year after year we hear about pensions being raided, pension companies going bust etc and yet people continue to hand over this money on a plate to people who ask for their cash  Crazy
The real genuine pension is long gone. Today it's about making the rich richer and avoiding paying out to the little man if possible.
I need a new signature... i'm bored of the old one!
kdoug007
Grafter
Posts: 510
Registered: 17-05-2012

Re: Pension ? Don't bank on it.

it s  a  lot  to do with printing  money and  government  bonds..
  thats  why annuitys  are  so low..
ALSO  dont accept  the  first one!
Community Veteran
Posts: 7,917
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Registered: 02-08-2007

Re: Pension ? Don't bank on it.

I Wonder why on retiring people are being forced to buy an annuity ?
After all whatever money there is to invest it's your money so surely you should have the right to do what ever you want with it ?
Community Veteran
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Registered: 10-06-2010

Re: Pension ? Don't bank on it.

There were tax breaks on the contributions. Maybe there ought to be something to prevent people blowing away all their pension pot and then entirely relying on the state pension and any benefits they might then be able to claim.
And now every worker has to be automatically enrolled into some (probably rubbish) private pension. Good news for the pension companies created to collect all those charges.
Community Veteran
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Registered: 21-03-2011

Re: Pension ? Don't bank on it.

Quote from: gleneagles
... forced to buy an annuity ?
After all whatever money there is to invest it's your money...?

I think the idea is to force you to provide a retirement pension from your tax free pension savings and to not become a burden on the State.  Of course this depends on the concept that annuity suppliers and pension companies provide a fair return on those investments. Unfortunately much of the casino investment in the City is funded by our pension savings. It of courses pays the bonuses of overpaid traders too.
There's nothing to stop you investing your other (taxed income) savings in stocks and shares etc to generate some income from the dividends whilst hanging on to the capital value. Of this is exposed to the risks of the Equity Market and the greed of the executives of the companies in which you chose to invest. The poor rate of interest on savings is push people with retirement funds toward the "buy to rent" market for an income source which helps to sustain high rents and corresponding high house property prices.
Now Zen, but a +Net residue.