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AIBU to ask a question about pensions

8 replies

Fredthefrog · 22/10/2018 11:42

Everyone should have a pension now thanks to the government workplace pension scheme but my question is are they safe. Lots of companies have gone bust and the pension pots seem to disappear leaving people who thought they had done the right thing with nothing. How can you protect yourself from that?

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BigFatLiar · 22/10/2018 11:56

Well for a start don't trust advice on an internet forum.

I'd go for a major bank/insurance co but ask for proper independent financial advice.

Regulations have been tightened and most pensions savings are now protected but there are lots of scammers out there looking to get you to take the money out and spend it with them.

So I suspect the biggest risk is not while saving but when you take it out to use it.

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NotSuchASmugMarriedNow1 · 22/10/2018 11:58

NOW pensions are utterly useless. One of my colleagues has less money there than she has paid in and I have been paying in for a year and there is still a £0 balance sign showing on my log in.

They don't return phone calls as promised. They are just taking our money because they can, workers are being stuffed. Employers don't care because if we pull out of the pension scheme they don't have to pay their wack so there is no incentive for them to chose a good one. Pension companies must have £ signs in their eyes and the government have absolved their pension responsibilities.

Its truly awful.

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Allergictoironing · 22/10/2018 12:16

The pensions that are "disappearing" are company "defined benefits" schemes, so what you get is based on your average or final salary and the number of years service with that company. The company scheme is liable to pay the pensions, and often through bad management of the scheme or through the company itself not paying enough into it, that's where you get shortfalls.

The government's workplace pension legislation means that the employer and employee have to pay at least a set amount into an independent scheme which has been approved for workplace pensions e.g. Peoples Pension, plus loads of the big pension companies have approved schemes. If the employer goes bust, that money isn't affected in any way as it's been invested independently with someone like Aviva or Legal and General. These schemes are what's called "defined contributions" schemes, and the value of your pension pot is directly related to the amount put in and the performance of the investments it's in. Once the employer pays the legal amount into the scheme, what happens to them is irrelevant.

As said above, the majority of people losing their pensions these days is though scams. You should always take advice from an IFA if you are considering moving your pension, and check on the FCA website that they are, indeed, registered with them and for what products.

Never listen to anyone who suggests you put any money you are dependent on into a scheme which isn't HMRC registered as a pension scheme. Never consider anything "too good to be true". If there's any pressure, including time, walk away. Read every single bit of paperwork they send you, and get someone else to have a read too - a friend was caught out when the paperwork stated that the investment was all his idea & the "adviser" hadn't recommended it (they had), but he didn't notice that. Guaranteed income? Walk away.

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Neshoma · 22/10/2018 12:17

It was company pensions that were the problem. Look up Robert Maxwell!

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AdoraBell · 22/10/2018 12:23

As suggested up there ^^ get proper RL advice rather than here. I second going with a bank or insurance company.

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H0ldonsheet2 · 22/10/2018 12:28

I have a couple of work place pensions where I have contributed and so has my employer. I can log in to view my payments and I receive an annual statement. I hope in future years that I will receive a payment, that has increased in time due to compound interest etc. One year my pension grew by a better than expected percentage. However, I know some people that have invested their money into property instead of pensions, or ISAs or a combination of all these. My state pension is expected to be £155 per week. Do you think that you could live on that amount of money ?, lots of people do, but not much money left over for luxuries.

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Allergictoironing · 22/10/2018 14:53

Do bear in mind that the government tops up any contributions into a proper registered pension scheme by your tax amount, so putting in £80 this actually increases the amount invested to £100.

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Fredthefrog · 23/10/2018 14:23

Thanks. It's a Scottish widows pension scheme and I am far too young to take money out but want to plan for the future. Just want to know that the company I work for can't use the pension pot for something else .

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