pension's

[billyo]

will this lot that's happing on the stock markets effect our pension's ,or will we be ok in the long term .help or is it just a blip i hope or are we been shafted

 

[JohnD]

it depends what sort of pension you have, and when you are going to retire.

If you have a company final-salary pension, it will probably not matter. the company takes the gravy when times are good, and either coughs up or gets bailed out by the taxpayer when times are hard.

If you have ten years or more it will not matter. markets go up, markets go down.

If you are an MP it will not matter, you have voted yourself an abnormally generous pension at the taxpayers expense, that you intend to draw whatever happens.

If you have a private pension, and are intending to retire in the next few months, it will only affect you if you did not take the sensible precaution of gradually moving your pension fund out of equities and into cash-like funds over the past few years.

If you are going to retire in 5 years or so, it might affect you, depending on how long prices keep going down; when they stop, when they start coming up, and how much they go down and up.

 

[JohnD]

here is a graph - note the time period - for UK 100 top shares over 13 years.

It reached a peak about 31/12/1999 and fell for several years, we are now (possibly) at the crest of the long rise following that last big fall.

http://www.moneyextra.com/stocks/LS...=all&mavg_period=&image_size=&time=1201101372

 

[Nige F]

Thanks, John. As a layman I know , in general terms, that a Free Market Economy will do that ad.infinitum. SELL those shares now .buy gold Wait for the house crash

 

[billyo]

JohnD.i pay £60 amonth over 20 years into a private pension, in 10 years i am told it should be worth £110 plus, a week i hope, would it be worth topping up say by 7000k

 

[masona]

For what it's worth, I have been told by a few IFA and from others that pension is now a waste of time, invest it yourself for a better return, always get a proper advice though.

 

[joe-90]

Better off a buying a house and renting it out. Then when you pop off your kids can sell it . Have your cake and eat it.

 

[JohnD]

JohnD. i pay £60 a month over 20 years into a private pension, in 10 years i am told it should be worth £110 plus, a week i hope, would it be worth topping up say by 7000k

It used to be said that you should pay 10% of your earnings into your pension for 40 years to receive a decent pension. However many of us are noe having shorter working lives and longer retirements, so you need more

if you have £7,000 to spare, ask yourself are you likely to need it before (1) you retire or (2) you are aged 50. Also (3) are you a higher-rate taxpayer.

If thge answer to (1) is no, and (3) is yes, putting it into a pension is likely to be a good move.

This is because, as a higher-rate taxpeyer, £7,000 out of your pocket will be grossed up to £11,666 in your pension fund (since income tax paid on your earnings is reclaimed). If you have your own company, and the company makes the payments, it also saves employers NI since the money is not paid to you as wages.

If the answer to (1) is yes and (2) is yes and (3) is no, consider what you can afford to lock away. In any case put the rest of it into an ISA to protect it from tax.

My preference is to put pension contributions, after putting the max into any company scheme, into a low-cost SIPP; then you need have no commission to pay, no penalty charges, and can start drawing from it at whim anytime after your 50th birthday (this age will increase in future)

 

[Bilioustrumpstaine]

Better off a buying a house and renting it out. Then when you pop off your kids can sell it . Have your cake and eat it.

Better than lending money to a pension company who may or may not be in business when it comes to pay out time.

 

[masona]

Very true, I lost quite a bit from the AVC Equitable Life

 

[JohnD]

sorry to hear that

I was (am) partly in Equitable Life, but wouldn't put my contribs into the With-Profits scheme as it was so opaque.

My Equitable Unitised Funds have done very well

 

[Bilioustrumpstaine]

Property is the best investment IMHO

 

[oompah]

The only ones it is going to hurt is the ordinary working guy the bosses and civil servants on the gold plated pensions won't see a difference .It was reported that all of last years gains were wiped out on monday something like a 20% loss.I,m fifty now and have been in a private pension since 1978 and it has been up and down like a fiddlers elbow.

 

[billyo]

save a little spent a lot by the sound of things live long and prosper

 

[JohnD]

I heard the suggestion today that the market plummets over the last week were caused by SOCGEN dumping their positions that some unmanaged trader had built up (dropping £3 billion in the process).

Some lucky counterparties have presumably made a £3 billion gain.