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.

Pointy, why have you suddenly acquired a "u"?

I don't think it's just the nightmares.

It's because many of us just don't understand it and no one will tell us what to do for the best unless we pay them lots of money and we don't even feel we can trust those people.

I'm into regular namechanging, quatt. Doug as in the boy's anme. Because I like the idea of pointydoug

ROFL at Lenin 'property is theft (I haven't got the readies anyway)'

If you did, though, I would throw your principles out of the window and buy the cheapest house you can find in a rentable area. Until a new social housing programme is implemented in the UK (unlikely) it is the only longterm investment worth it, surely? Even the tax can be mitigated a bit (live in it for a couple of years before you retire etc?)

Sorry, not much help I'm sure (speaking from very lucky privileged position of final salary scheme)

I don't think property is entirely risk free as a long term investment. I owned an investment property before and was never happier to have sold it.

There are a lot of ongoing costs with owning a property such as interest (particularly if you can only afford to put down a low deposit), maintenance, refurbishment and insurance costs that make property a relatively expensive and troublesome proposition to hold if you cannot find a good and long term tenant.

Shares, on the other hand, whether through pensions or ISAs, have no to very low holding costs.

Then, there is also the risk of rise and fall in property prices (same as for shares). Negative equity is no laughing matter - stuck with ongoing costs month after month but cannot sell because will end up paying the bank.

I am happy to have all my risk in residential property (for now) in the matrimonial home.

'and you end up seeing a future of destitution. '

Not if you don't live very long past the age at which you are no longer able to work.

I sure as hell hope I don't!

Therein lies some of the palaver about pensions: living longer is not without cost, and, unless you're quite wealthy, it's going to be come an increasingly full poisoned chalice.

yes, that is true, expat.

But I have nice dreams in my head of walking down streets on a Monday afternoon smelling flowers when I am retired. How can I do that if I die too soon?

And the real bugger is that you have no choice in the matter of when you die. It could be far sooner than you would ever want of far later. Neither way is great.

What a grim topic it is

I just did one of those pension calculator things - according to them I should be putting £600 a month away. there's no way in the world i can afford to do that...and the women in my family live well into their 90s.

Mind you, I always wanted to end up as one of those old girls that pushes trolley loads of old newspapers around and shouts at people in shopping centres - looks like my dream will come true

Oh yes. Based on current forecasts (and the pattern with pension forecasts is that they ONLY get worse, not better) I am looking forward to retiring on 1/6 of my current income. It's just as well that I like chickpeas, really.

LOL at Nancy66

The letting thing is honestly a good idea. You have an income from the property during your lifetime and your spouse's/civil partner's lifetime if they poison outlive you, and then your children will inherit the property when you have both snuffed it. Capital Gains tax is now a flat rate of 18% and you only pay that on the actual gain, net of costs, on disposal. If you held on to it for your entire life, it would be subject to inheritance tax on the second death, if you are in that bracket, but if you aren't it would pass to your heirs net of tax.

Pensions are a con - you just have to look at Pension companies' swank offices, expensive brochures, number of staff and near constant high profile national advertising to understand that doesn't come cheap. The big fund managers are currently piling-in again to an overbought equities market (according to yesterday's FT). I'm now pretty much now sitting in cash, apart from a big tranche of Lloyds shares as I am hoping for a rights issue and announcement about a reduced fee for the Government Asset Protection Scheme.

A SIPP is the way to go.

I'm not sure a SIPP is the way to go, actually. It's just another wrapper which excludes residential property investments, I thought.

I've never had great returns from residential property investments and they always seem to cause a lot of grief, but if you have the right property and can find the right tenants etc I'm sure it can work reasonably.

I'm not sure a SIPP is the way to go, actually. It's just another wrapper which excludes residential property investments, I thought.

I've never had great returns from residential property investments and they always seem to cause a lot of grief, but if you have the right property and can find the right tenants etc I'm sure it can work reasonably.

At least with a SIPP you can invest in companies you believe are worthy, and if the market looks overheated you can sit in your SIPP wrapper in cash for a time.

Quattro - V true about the possibility of a lot of grief from troublesome tenants and/or a troublesome property. I wouldn't personally invest in property in an area I didn't know thoroughly and I'd like to be reasonably local to be able to properly manage things should the need arise.

What could happen is that the government could agree to give you a state pension as long as you agree to 100% taxation after you die

that might work

According to today's ST sipps are only protected for the first £50 k

www.timesonline.co.uk/tol/money/pensions/article6850659.ece

I use Hargreaves Lansdown and funds held within Sipps with them are in trust which means they are protected.

I think in most parts of the country outside the SE the average house won't provide much of a pension; & DH's actual pension pot, after more than 20 years, has shrunk in this year's statement.

We've let our kids know they're expected to sub us when it comes around

I am rooting out all my ancient pension paperwork and starting a SPREADSHEET

oh yes

I am paying 1% fees on one of these bastards

Ha on one I'm paying 3% fees a year

I'm going to transfer all this tiny shit ones to a handbag fund