Pensions advice required

[Andy W]

First off I do not trust pension advisers or financial advisers, my query is I have two pensions and currently paying £160 per month, now with all the problems with interest rates etc I am now thinking That my pension will be worth less than I have paid in, so should I freeze it instead of putting money into a bottomless pit or continue paying and hoping for the best. The Prudential tried to get me to pay into the fund an additional £500 per month but could not make any guarantees of its future worth so i am now considering buying another property as an investment and using the £160 pension payment plus an additional £100 child maintenance money that I have now finished paying for a mortgage so I would not even miss the money. Any one in the money business out there who could offer a bit of guidance.

 

[grasmere]

Firstly Andy, whilst I sympathise with your comments it is actually illegal for anyone who is not authorised as a financial advisor to give financial advice. That said if you want to take financial advice from someone who is not 'trained' nor 'authorised' then you may want to have your Mercedes worked on by a 'guy whos a friend of a mate who'll do it cheap' now, would you ???

You may be right in your thoughts etc but its your personal circumstances that are at the heart of it all, family commitments/responsibilities income/expenditure, future aspirations etc. Its advice you may want but by all means ask for other peoples opinions and experiences

Best of luck . . .

Oh quick tip if its GOOD financial advice you want, speak to at least 3 different advisors and THEN compare notes re their advice - then its your decision, you'll soon find out who you can trust! Of course you can also ask other people to individually recommend someone.

Oops nearly forgot to mention - I am a financial advisor. You are not wrong to come from a position of scepticism about the future - when you can find someone who can be certain let us all know who he/she is

Joking apart, the post after this one made a good point re tax - you see again its about personal circumstances and what effect each aspect has. By the way, a financial advisor will (should) always recommend a pension scheme after building an adequate emergency fund and before savings because of the tax benefits. eg currently you as a basic rate tax payer will have £100 credited to the pension scheme for every £78 that comes out of your wages, or if your are a higher rate taxpayer, £100 for every £60 you pay - you wont get that with a savings plan. Regarding property - well thats property investment advice which is another speculative area but pensions, property of eg unit trusts, its what will give you what you want when you are between 50 and eg 65 years of age. Perhaps its a balance . . .

 

[GrahamC230K]

We had out estimates sent to us recently from the work pention. One guy didn't like the results so opted out.

His next payslip, he got taxed ~£100 more,about what his pension contribution was anyway, due to some difference in benefits or something!

Pensions are beyond me, just know I have been paying a resonable monthly sum since I was 18 and hope it's enough to retire on when I get to 50!

 

[pluggers]

I have a couple of pensions going at the moment 1 works pension and a couple that have been frozen, and I dont hold out much hope that any of them will be any good when needed . What im doing at the moment is to pay into a long term savings plan,Small amounts of about £40 a month.Then 1 or 2 years down the line, take out another plan for the same amount and so on.So far ive been doing this for 6 years and have 3 plans.These wont create much income but added to what pension I will get will top it up a little more.Hopefully It will work or im broke

 

[Andy W]

Thanks for the feed back, the reasons I do not trust advisors is that they always try to sell you one of their schemes or in the case of the Pru encourage you to pay more into existing policies also I had bad advice and a lying scheming incompetent advisor who worked for a large local building society who I had to take legal action against, the building society settled out of court and paid my legal costs. My situation is that in eight years time I intend to semi retire, I have my own business that gives me an excellent income, the business would not be worth much if I sold it as there is no guaranteed contracts of any single worth, an associate tried to sell me his business 3 months ago, instead his customer base has filtered through to me anyway with out me paying for it, and as long as I have my health I can still work for living money a couple of days a week, I may be able to rent my business or to offer it for a monthly commission to a young engineer who wants to walk in to an established ready made business guaranteed to make money with no outlay. I also intend to sell my 4 bed house and to down size, I only have a small mortage and at todays prices I have found a few nice bungalows that I could buy, sell my house and walk away with £70k, that coupled with whats in my pension pot that I have been paying in for 20 years and my couple of days a week work, I should be ok............Hopefully !

 

[grasmere]

Andy, so what age are you now, PM me if you'd prefer, BTW I wont try and sell you a thing

 

[Andy W]

I am 42 years old but there could be hereditary medical factors that will force early retirement, like I said health permitting.

 

[teky]

im 55 in nov this year comeing down the other side of the hill, its no different to 15 apart from im wiser, creaking bones/bad back/head aches/family problems/pentions/saveings/house/cars/dogs/snakes my pets

 

[Andy W]

its no different to 15 apart from im wiser, creaking bones/bad back/head aches/family problems/pentions/saveings/house/cars/dogs/snakes my pets

I know exactly what you mean, I still feel 18 apart from tennis elbow, worn knee cartlidges ( self inflicted, 20 years of martial arts training), lower back problems, head aches, high blood pressure, high cholestrol................ in fact ready for the knackers yard !

 

[mark.t]

2 pensions

hummmmm?? 2 pensions can you have 2 of them,?? unless you have 2 jobs and pay ni or tax on both incomes???? i thought it was illegel someone will put me right

 

[sym]

I'm pretty sure you can have as many pension schemes as you like ! Not sure how many you are allowed to contribute to at any one time - I have 3 at the moment which are frozen from previous jobs, and another one just started, so its a bit messy and I need to sort it out really ! Very difficult to estimate the advantage of merging frozen schemes like this into a new one though - sometimes its better to just leave them alone.

Were it not for the advantage of contributing to an employer scheme which automatically provides tax relief on, and matches my contributions, then I would guess it makes more sense to just pay into a single private scheme though.

S.

 

[grasmere]

Its not how many, its how much. You could have company, personal, stakeholder, frozen, paid up. Because of the associated tax benefits and all depending on personal circumstances, employed, self employed, annual income etc etc this dictates how much you can contribute in any tax year - and thats not to mention carry back! This is where sitting down for a full 'personal' financial review is important.

Its often true that its best to leave frozen or paid up as they are and let them run. Many pension companies will not accept transfers in etc, its all about whether you/they think they can do a better job with the funds up to retirement and in the current climate its unlikely - hence the reluctance.

Andy W - its about whats to do best with your money now for later. To draw your pension in 8 years could be ok if you can MAXIMISE your tax beneficial contributions till then, otherwise its not really long enough for a current fund to grow much more. Time is the most important factor. If however, you were to leave this fund to build longer, whilst you are able to take an income from elsewhere, say nearer 60/65 then that is a long time to go and more contributions could be a more viable option. A major point of course is that you cant get your hands on a pension (up to 25% of a personal fund yes but no more) if the money goes in savings then its all your at any time but you've only got what you've put in +/- interest In addition, apart from certain guarantees when you start taking the pension its possible that you lose your fund at death whereas a savings pot becomes part of your estate, sorry, becomes part of your taxable estate

Your time is running out if 8 years is your first target date ( for us all of course, I was 50 in April )

You might want to consider the following:
1. Ask at least 3 INDEPENDANT advisor for a free initial consultation, say 30 mins and get a feel for what they are about. They should explain the basis of their service ie commission on sales of products/services, hourly rate only, or a combination - either way you should be made aware of the exact amount over £250 that they make in commissions.

2. Probably PAY for a FULL financial review. They are going to give advice and make recommendations because thats what you're there for but you dont need to take action on it at the time - its your call. What you are after is clarity, ideas and suggestions.

PS - make sure the advisor is 100% INDEPENDANT. There are some who are tied to companies but dont disclose it as they should . . .

 

[Benzowner]

You can have as many pensions as you like, however, the tax man will only let you pay into one of them Over the years, we have all left jobs where we paid into a company pension scheme, how many of us have notified the pension holders of changes of address etc. That is where some of the huge funds held by pension companies have come from.

 

[grasmere]

Heres a good link

http://www.adviceonline.co.uk/

 

[mbz 6]

After being outsourced 3 times I have 2 frozen pensions and will be joining a the company one soon. A few years ago I decided not to rely on any one else to provide a pension for me so I have a few eggs in several baskets.
Shares PEPS and ISas
A property I rent out
Personal numberplates

I dont think you can rely on anybody to look after you or your money.

Company pensions are a good idea where else can you make upto 40% on your money
but they do have risks attached.
I just hope I live long enough to enjoy my pension