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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

to think too few people worry about pensions ...

262 replies

redskyatnight · 24/09/2009 12:25

Was chatting to a group of friends (and friends of friends) the other day when the subject of pensions came up.

Only about half the people there (all in their 30s and 40s) had any sort of pension. Quite a few of those said that they didn't pay in as much as they ought to.

Of the others, the reasons for not having one varied from - not wanting to think about it, assuming the kids would support them, relying on inheritance (!), wanting to spend their money now and let the future take care of itself etc.

Maybe I am unduly worrying (I was in the "have a pension fund but don't pay in as much as I should do" group) but I'm astounded that so many people have effectively closed their eyes to saving for their old age. The state pension isn't going to be much to live on, and can we really rely on other sources of income just materialising from nowhere?

I do appreciate some people genuinely have no money for a pension after essential bills, so am talking about the people who do have disposable income but choose to spend it elsewhere.

OP posts:
LeninGrad · 28/09/2009 14:31

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LeninGrad · 28/09/2009 14:34

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morningpaper · 28/09/2009 15:41

crowns, how many crowns is good?

I think that must be the L&G one, thank you

blueshoes · 28/09/2009 17:25

Leningrad . I am no expert, just brave (or silly) enough to try to wade through some of this financial stuff on my own, because dh won't touch it with a barge pole.

I don't actually know about crown ratings or S&P ratings, so I googled it! Still learning on the job ...

& Poors Fund Management Ratings: AAA is the best rating.

Crown Ratings: 3 crowns is the best rating.

Reading the guff, it looks like crown ratings are a quantitative rating ie just looks at numbers. Whereas the S&P rating is a qualitative rating ie it looks at numbers as well as quality of the management team.

As you know, past performance is no guarantee of the future performance, which is the weakness of any form of pure quantitative rating.

For my employer pension, I don't really have a wide choice of funds to choose from. I just decide based on the region, risk profile and the percentage allocation. However, if you are streamlining 16 funds, you would need some form of league table, together with your financial advisor.

blueshoes · 28/09/2009 17:29

Standard & Poors Fund Management Ratings

blueshoes · 28/09/2009 17:31

mp, 3 crowns for L&G Managed Fund. You are onto a winner!

blueshoes · 28/09/2009 17:37

Just checked 3 of my pension funds - all just one crown, oops! Guess I am easy to please

LeninGrad · 28/09/2009 18:58

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blueshoes · 28/09/2009 19:53

As far as I can see, the trackers tracked the benchmark index - so did what it said on the tin.

The actively managed fund is the Standard Life Newton International Growth Fund. It sort of tracks the benchmark index. Nothing to write home about, but then not much difference from an equivalent tracker fund IMO.

Quattrocento · 28/09/2009 20:44

Protected rights refers to a period where you contracted out of NIC and the payments went into a contracted-out money purchase scheme which has to be protected. I have those too but I think I must have contracted back in when I wasn't looking

NinthWave · 28/09/2009 20:48

I've got a private pension...but I work for the Pension Service, so would have to be the World's Biggest Twat not to have one

morningpaper · 28/09/2009 21:15

hehehehehe

morningpaper · 28/09/2009 21:16

Now, I was contracted out of SERPS or SP2 for years, but then when I started being a PT SAHM I contracted back IN

However, as I am self-employed, I can't take advantage of SP2 ANYWAY, so I want to know whether I should contract OUT again, or not?

morningpaper · 28/09/2009 21:34

I've drawn myself a nice Portfolio on the Trustnet, but I don't understand the resulting chart

I used to be a finance manager, which is a bit worrying

What is the SCALE on the left of the chart, can someone explain?

blueshoes · 28/09/2009 22:24

mp, you're on fire!

Not sure what you mean by scale on the left. Is it a graph you are looking at with % on the vertical axis?

Quattrocento · 28/09/2009 22:45
morningpaper · 28/09/2009 22:49

yes the % on the vertical axis which has 0% in the middle of the axis

I don't understand it

morningpaper · 28/09/2009 22:51

I AM on fire!

oh and I spoke to L&G this morning and I have TWO pensions with them, which is why I thought I had one that had lost so much over the last two years! One was protected and the other was money from an old employer

The only depressing thing was that the last salary that they had for me which was 10 years old was three times my current salary

dammit!

blueshoes · 28/09/2009 23:01

mp, I believe the line representing all the funds start at 0% and then go up and down in the way that graphs do.

If say you chose 1 year as the time period, the value of the fund/index as at 1 year ago is the baseline value ie pegged at 0%. Then over time (as depicted by the horizontal axis), each fund/index will rise or fall as a percentage of that baseline value (as depicted on the vertical axis).

For example, if the graph is at -10% on the vertical axis after 3 months on the horizontal axis, this means the fund fell in value by 10% after 3 months.

It is a pictorial way of showing the fluctuating value of a fund/index over a period of time.

WebDude · 29/09/2009 02:37

Hmmmm... not the most exciting of subjects but seeing as I'm 15 years away from getting some payout I guess I should dig out what paperwork I can find.

I was employed in higher ed (a Polytechnic, so 'local government') for some years and they've indicated I'll get 4K a year (worked there for 11 years until I was 30).

Had some cash in a private pension when I switched job (that ended under 2 years later) so nothing much in there, but next 15 years (I opted for a Far East fund) might make it grow.

No, after hearing the Moneybox piece on Saturday about the way the pensions companies hit the amount (example given suggested that with no charges, and some nominal rate of growth, paying in for 40 years would give about 250K, but effect of charges could cost over 75K.

Remember it is not just the effect of the management fee, but the loss of compound interest on the fees, which themselves increase year by year.

Guy from Standard Life was asked why they don't charge a fixed fee, and his initial response was that if someone is paying in a small amount each month then they would choose to pay a small percentage. He did, however, acknowledge that as it increases year on year, there's little to justify the increase.

If it's like most financial products, any fees paid out to an advisor also come out during the first few years, in case customer switches to some other firm. That means a bigger hit on what is actually invested, as it would otherwise have been a good starting point when the person is young and would have the longest time period in which to grow.

Back to plan #2, make a million or two from websites, then ensure I don't hook up with a gold-digger. Oh, and leave the UK, given the taxman made me bankrupt, I'm not planning on letting them touch me in future.

morningpaper · 29/09/2009 09:19

then ensure I don't hook up with a gold-digger

You sound like you will be reasonable ok webdude

Blueshoes: I assumed that re. the chart but it didn't match up with the graph underneath in terms of growth, and also, the 3-crown account which seemed to be doing the best was the lowest of the three funds I was tracking, which seemed topsy-turvy.

I am going to leave it a few days before looking at it again because my head hurts.

morningpaper · 29/09/2009 22:09

Can anyone answer this question from a couple of days ago:

"Now, I was contracted out of SERPS or SP2 for years, but then when I started being a PT SAHM I contracted back IN.

However, as I am self-employed, I can't take advantage of SP2 ANYWAY, so I want to know whether I should contract OUT again, or not?"

?

LeninGrad · 30/09/2009 11:08

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morningpaper · 30/09/2009 13:40

Hmm well I don't know what I would look for - I get basic rate tax relief and I pay N.I. Class 2s (?) i.e. the basics

urgh I wonder how I would find out? Perhaps I should ring the pensions advisory service thingy?

LeninGrad · 30/09/2009 13:48

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