to think too few people worry about pensions ...

[redskyatnight]

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.

I can't follow what you;re saying.

Mp, I can follow what you say but I'm not sure I have confidence in you

well, at least you know you've made basic mistakes.

yes I agree Leningrad

It is tricky though - you graduate with vast debts, you don't want to start putting money into a pension when you can barely pay your rent

time goes by...

you have babies...

I take the piss out of Disney for promoting marrying a rich man, but it DOES have its benefits

(I haven't married a rich man btw. Although there is plenty of time)

Oh yes, I have an annual meeting with a dweeby independent financial advisor. He wears a shiny suit and tries to persuade me to buy products which pay him a lot of commission. I change independent financial advisors every 2-3 years in the hope of meeting one that doesn't wear a shiny suit, but they are all the same

And I am going to follow MP's advice and save the time and money and just buy handbags.

Yes the problem with Independent Financial Advisors is that there is no such thing really, is there?

They are all going to want you to change products and get X extra thing

Pensions were discussed today on Money Box. Apparently "up to 40 per cent of our private pensions are swallowed up in fees". That rather negates any tax breaks, non?

My financial advisors promise to look at my pension but somehow never get round to it.

I cannot believe I have been lucky in my choice of fund. That does not happen to me generally. Until recently, I just went for the lifestyle option.

I don't find my pension funds perform significantly better or worse than, say, my equity ISAs. Overall, they pretty much reflect the performance of the sector they are in, give and take a little.

I find your experience quite disturbing though. Cannot understand it.

I daresay for you who are likely to be higher rate tax payer with employer top ups, there is still a place for pensions in your savings and retirement plan. I reckon that to put £12.5K a year into your pension, you actually 'pay' 50% of that amount from your own salary. So to that extent, even though you only break even after 17 years, you actually 'made' quite a lot from tax breaks and employer top ups.

Labour could stimulate the economy by allowing people to invest ther pension pots in residential property. They talked about it some years ago.

DP and I have worked out this evening that our joint pension income will be less than £8K per annum. I've told him not to worry as my half finished novel will see us OK.

I don't actually pay £12.5k into my pensions btw that was a purely hypothetical illustration of what would be needed if you were unfortunate enough to have invested in the "balanced managed" funds that I have invested in, simply to secure yourself an average income on retirement.

Yes you are right that I do get relief from tax at the higher rate, and my employers have contributed something (not a lot in the scheme of things) but something.

Unfortunately I do think that the public sector, who until now have enjoyed proper final salary schemes, will be targeted as an area for cost-savings. A proper pension scheme is seriously expensive.

Reduced, I somehow don't think stimulating artificial demand for a previously overheated residential property market is what the economy currently needs. What is needed is stimulation of the real economy and for the banks to lend again.

Blueshoes - my experience cannot be unusual though because the two pension schemes that I have are from absolutely massive pension fund providers. There must be a lot of people in my situation.

Quattro, did your pension scheme(s) allow you a choice of funds other than the 'balanced managed' fund?

Quattro, they probably are a fairly normal experience - but most people pay bugger-all notice to their pensions (as I have until recently, which is why I've realised that my small pots are now dead due to fees!)

Reduced, one of the funds my pension contributions go into is a UK commercial property fund. I don't think a residential property fund is available. That can give you some exposure to the property market through your pension, if that is what you looking for.

Reduced: half-finished novel, good idea

Well, working back through the pension files, I see that at the start, they only offered two funds and the default fund was the "balanced managed". The choices of funds broadened over the years, and I worked through the options with my shiny-suited friend(s), and chose three funds to spread my risk. The first was the balanced managed, the second was a UK equity and the third was fixed interest.

The second pension provider had very similar options and I chose broadly similar funds. Kept well away from anything described as high risk.

It's just the performance in the balanced managed fund that has skewed the results I think. But these balanced managed funds are by far and away the largest funds both pension providers hold (possibly because they are the default option?)

The pension fund would be worth nearly 50% more invested in a building society at a 6% interest rate. I worked that out just to punish myself.

that sucks SO much Quattro

I just checked the annual management fees on the selection of funds in my pension scheme.

The highest was 0.8% but that was for a global fund of funds. Most came in below 0.5% , with the lowest being 0.1% for a UK FTSE All Share tracker.

Any management fee, I suppose, would sap a small non-growing pension pot over time. But those fees are not really that high, when compared to any other kind of mutual fund. Certainly much lower than for a share-based child trust fund!

Quattro, the balanced managed fund default option sounds like disgusting complacency on the part of the pension fund. Really cross for you.

I recently moved away from the 'lifestyle' default option. Cannot remember why. But I think it was to include an element of commercial property in the portfolio. Wonder how that is doing .