Pensions : I'm very glad I've not put any of my money into one

[TalkinPeace]

www.betterfinance.eu/fileadmin/user_upload/documents/Research_Reports/en/Pensions_Report_2014_FINAL_-_EN_FOR_WEB.pdf

Averaged over the last 14 years, returns on pension funds have been negative in the UK

I think the issue is more that there's a big difference between a company pension where you get both a contribution from your employer and tax efficiency (clearly well worth having) and a private pension where there is no employer contribution and less opportunity for tax efficiency depending on how you take your money out of your business.

For most people a company pension is a good thing.

14 years is a bit of a funny time to judge over. Especially as 9/11 (which caused a big crash) was just over 13 years ago.

It also depends on your own circumstances. I'm a higher rate tax payer. I pay in 8% to mine (which is about 4.5% in actual take home pay sacrificed). My employer pays in 14%. Last year our fund grew by 8%.

Obviously I'm an extreme.

There are people for whom saving for a pension just means that they won't get means tested state benefits. So less great for them. Of course that assumes that there will still be means tested state benefits in 2046. (When I am due to retire.) I have my doubts.....

Or "what atticus said"!

But if you're self-employed (and taking most remuneration as divis) then your perspective on pensions will be very different to those of us in company schemes with employer contributions.

Husband and I both have NHS pensions. I think we will keep ours, continue to max out ISAs each year and invest the rest in metals, art, shares and other high risk ventures. Right now, we are renovating our house so all money is being spent on this and clearing mortgage, rapidly if all goes to plan. I abhor debt so I'm aiming not to have any if at all possible, and will adjust lifestyle if our circumstances change.

Littlebear
there are millions of people who are self employed or on low hours jobs with no state pension and no private pension and no employer to make a contribution

auto enrollment allows low earners to opt out : they will as any deduction from their pittance wages is too much

and even if they opt in, 3% plus 8% of £6000 a year for 5 years does not add up to much of an annuity.

Annuity rates are such that you need to be retired for 38 years just to get your money back
and if you are on NMW why on earth would you want to risk part of it to the stock market?

We are employed (but own the company). The company pays our (large) pension contributions. Just one way of getting money out of your business without paying a lot of tax on it.

I will be taking mine out next year when I am 55 as a lump sum.

It is small and will provide a pointless pension..

But the scenario you describe doesn't fit all company employees. Nor does your own situation or mine. Which is why making blanket statements about pension provision is pointless

auto enrollment allows low earners to opt out : they will as any deduction from their pittance wages is too much

Erm, Automatic Enrolment allows ALL employees, regardless of salary to opt out.

2008 wasn't a disaster if you were smart due to actions I took in the last four months of that year my pension pot is 4 times larger than it was then.
I spend time researching where to put my money run my own pension through a SIPP and will not be buying an annuity.
Information is power that enables you to take control for yourself often making local investments in which you have more knowledge.

Alpaca : I know - one of my other jobs will be into autoenrollment in a year or two - I shall opt out every two years as per the rules

Lonecatt
were the trading fees worth it with average pension pot size of £50,000
or is yours one of the few and far between large funds

Every three years, as per the rules.

2 years 10 months to ensure that you do not get caught by the rolling months rules (I'm an employer as well as an employee)
the rules are a blerdy nightmare

It's every three years on the anniversary of the employers staging date.

No trading fees I didn't invest in stocks and shares I bought commercial property. It was really worth it I started with under 50K. I have reinvested the income.

I've only had a pension for 9 years but in that time I have paid in £8k and it is currently worth £30k. The difference is the tax relief, the equal contributions paid by my employer and the increase in value. So I'm very happy I paid into it. Yes the value could go down, but hopefully it won't go down by over 2/3s, and I have about 35 years until I'd need to draw it down so fingers crossed it's been a good choice.

There seems to be a lot of negativity about pensions, but I think in some circumstances they are still a good investment, particularly if your employer matches your payments.