Did someone say pension....?

UK pensions are a waste of time. It's amazing how it varies abroad though. Value for money is far better elsewhere, sadly (for most the UK population being screwed daily).

>>3842
What are they like abroad? More defined benefit schemes? I know BTL on the Graun a regular post in pension articles is that it's wonderful in the Netherlands and we are being ripped off by the greedy bankers over here.

To me, Auto Enrolment seems like an excuse to scale back the State Pension because more people will have their own personal pensions.

The flaw in this is that I expect many of these pension pots to be piddly amounts. If you didn't have access to a decent pension scheme already then it's likely they'll do the bare minimum of phased contributions of banded earnings. This means contributions only have to be based on earnings between £5,668 and £41,450, so a salary of £15k is now effectively £9,332. Total gross annual contributions (eventually 8%) would be under £750 and that's never going to be enough to provide a worthwhile retirement income.

>>3858
Breaking news, pensions are unsustainable

>>3859
>unsustainable

That's probably not the right word to use, but I know what you're getting at. It's only an issue if you're not contributing enough, which is the problem for most people (unless they have other plans for retirement that aren't living in poverty or getting a part-time job in B&Q, like buy-to-let property) because they either can't afford to, they haven't even considered planning for when they retire or the pension scheme their employer offers is poor.

There's a huge gap between what people expect to be living on in retirement and what they're actually going to get - https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/239641/framework-analysis-future-pension-incomes.pdf

>>3860

No, the whole system is one giant ponzi scheme that is on the verge of toppling. QE has worsened the already dire situation.

If you are under 45 you will never see your pension.

>>3861
You do know how pension funds work, right? All QE has done is help push down annuity rates even lower.

You're going to need to explain yourself.

>>3861

Correct. It's heading for the proverbial cliff.

>>3863

How is it? Are you that lad from /emo/ that didn't understand pensions whatsoever but didn't let that stop him from spouting bollocks about zero sum trading and how you end up losing money because the charges are greater than the returns.

>>3858
>The government's plans for state pension reform mean many people, particularly lower earners, will receive reduced state pensions in future and private pension saving is meant to make up for a lower state pension – but these contribution levels are far from enough to replace this loss

http://www.theguardian.com/money/2013/sep/29/auto-enrolment-pensions-saving-retirement

STOP STEALING MY POSTS, GUARDIAN.

I guess we're not going to get an explanation from >>3861 or >>3863 about why the pension system is a giant ponzi scheme that is about to collapse. There's several reasons not to save in a pension, especially for low earners, without having to make shite up.

>>3865
This. If you need a good reason not to put anything into a pension, hefty personal debt is a good place to start. No point building up that pot if it's not adding value. State pensions are arguably a Ponzi scheme (this year's pensioners are paid from last year's tax and NI take, not from their own contributions), but a private money-purchase scheme almost certainly isn't.

>>3866

>but a private money-purchase scheme almost certainly isn't.

Why not? The assets bought by these schemes cannot cover future liabilities and can fall in value.

>>3867
>Why not?
They're paying off retirees (or, more accurately, their annuity provider) with the proportionate share of their investment, not the money invested by new entrants.

>>3868

Lad. Please try harder next time.

>>3868

Not always. A look into the market should give most people vertigo once they start pulling the curtain back.

>>3869
>>3870
Yes, we heard you the first time, lad.

>>3871

u wot m7

>>3872
Jump off, clifflad.

>>3873

u wot m7

https://www.youtube.com/v/87b61x3XL_E

I could be wrong, but aren't group money purchase schemes quite dated now? As far as I'm aware, they're occupational schemes that employers used in the 80's and 90's when they were switching from defined benefit (final/average salary) schemes to defined contribution schemes which still kept the trustee structure in place. These days new pension schemes are almost certain to be group personal pension plans. I don't know if this meant the trustees could choose what the scheme assets should be invested in or if that only applies to defined benefit schemes.

With group personal pension plans you're not going to end in a situation where assets cannot cover liabilities. This is in no small part down to the fact that there is no guarantee on what will be paid out at retirement and instead it is entirely dependent on how much is paid in, the performance of the funds invested in and annuity rates at the time.

My dad worked in a factory with a defined benefit scheme. He took early retirement at 58 with an annual pension of ~£20,000 that increases by 5% each year. The company have since closed the scheme to new members and replaced it with a defined contribution scheme. I know I'm never going to get anything like that when I retire.

>>3876

I hate to say it,lad, but theodds of you retiring are fucking slim.

I earn a decent five figure salary, but a lot ends up re-invested into new projects. I fully expect to not see a pension. Because I will likely be dead before any payout is likely. A window that moves back year by fucking year anyway.

>>3877

Shit. Apologies for typos, I have sausages cooking...

>>3877
Ever thought of re-investing it through a pension scheme? It's not uncommon for the directors of small/medium companies to create a SSAS (Small Self Administered Scheme) for the purpose of buying the company's land/property and then the company pays market-rate rent back to the scheme.

There's a number of things you can invest into with a SSAS or SIPP (Self Invested Personal Pension), so it may be worth looking into. If you're a higher-rate tax payer then pension contributions provide 40% tax relief (IIRC 20% is added to the net contribution and the other 20% is used to extend the basic-rate band).

>>3875
Oh christ we really never do change do we.

>>3868

This is correct, so I don't know why people have criticised it. With a defined contribution pot the annuity you receive (if/when you buy an annuity you should always search the market instead of accepting what is on offer from your existing pension provider(s), especially if you have health issues) will be underwritten based on your life expectancy and other factors like gilt yields. It's a payment for life in return for the lump sum you pay to them and there are strict regulations on what annuity providers can do with their pool of pension pots received to prevent solvency issues. For example, most of Just Retirement's assets under management are in bonds, gilts and cash and they also reinsure their liabilities.

Apparently they're mad on Mumsnet that Auto-Enrolment means they'll have to pay pension contributions for nannies, gardeners and cleaners.

http://www.dailymail.co.uk/news/article-2444618/Now-pay-nannys-pension-Middle-class-parents-face-600-year-new-rules.html

>>3884

OUTRAGE!

Now Mail weighs in with 'Now' headline

>>3883

Come the revolution...

>>3885
I predict that most of the comments will be about Gordon Brown raiding their pensions or how they were fucked over by Equitable Life.

Cofunds have announced they're scrapping their £40 annual platform charge (although the reality is that they forgot to actually charge anyone for it since they implemented it in January).

http://www.moneymarketing.co.uk/news-and-analysis/wraps-and-platforms/cofunds-axes-annual-fee-after-charging-review/2001351.article

This means that if you invest in collectives with them then your only charges are their 0.29% platform charge and fund charges (you could put together a decent portfolio with a TER of ~0.9% - I mentioned this on /pol/ previously >>/pol/50165). It's higher charges than in my pension and I wouldn't get the benefit of gross tax relief on contributions, but I'm going to look into squirreling away £100 or so per month into an ISA with them. This way I don't have to wait until I'm at least 55 until I can touch the money and there won't be limitations like having to buy an annuity/using drawdown. The only drawback is that I loathe Cofunds.

They've just had a pensions expert on BBC Breakfast, because Scottish Widows have released a report saying that a 25-year-old needs to save £66 per month if they want an annual income of £5,800 (with no inflation proofing) on top of the State Pension when they retire.

Her advice was that if you don't join a pension scheme you're effectively taking a pay cut because you're missing out on the tax relief and the employer contribution and if you don't save and want to live on more than the State Pension then you'll probably have to keep working in your late 60's/70's.

>>3893
>you'll probably have to keep working in your late 60's/70's
Being realistic all 25 year olds probably will.

>>3894
Late 60s for sure, the retirement age should be rising faster than it is and I suspect that the increase will be bought forward at some point.

>>3895
At the minute the SPA will reach 66 by 2020 (i.e. men and women born on or after 1954) and it's legislated that it will reach 67 by 2036 (i.e. born on or after 6 April 1969) and 68 by 2046 (i.e. born on or after 6 April 1978). The government has proposed to bring it forward so that it reaches 67 between 2026 and 2028 instead; it's not on the table to bring receiving it at age 68 forward or indeed extending it beyond age 68.

The government also knows that private pension provisions are an easy target for them (e.g. GORDON BROWN RAIDED MY PENSION) because the funds will be tied up for decades before savers can have access to them. There's talk of limiting tax-free cash available if you decide to take the benfits when you're 55 from 25% to 20% and also capping the maximum you can hold in ISAs to £100k.

>>3896
>it's not on the table to bring receiving it at age 68 forward or indeed extending it beyond age 68.

When I say "it's not on the table" I don't mean that I don't expect this to happen.

Can someone explain because I'm not quite sure. What's the difference between giving my money to a pension provider and keeping money stuffed underneath my mattress?

>>3898
In a pension fund, the value of your investment may go up or down. Under the mattress there's no such uncertainty - it's definitely going down.

>>3899
This. What you want to do is invest in a mattress commodities pension fund.

>Management fees charged by pension providers could be capped between 0.75% and 1%, according to proposals being set out by the government. The Treasury is consulting on its plans to cap fees, which it says could save people tens of thousands of pounds. Some older schemes set up more than a decade ago have been found to charge up to 2.3% a year in management fees.

>The consultation will seek industry input on three possible options: a 1% cap, a 0.75% cap, or a two-tier "comply or explain" cap, where pension providers will be capped at 0.75%, rising to 1% if they can explain to regulators why their scheme must charge more. A Treasury spokesperson said any final cap could lie somewhere between the two levels suggested, depending on the evidence received. The proposed cap would also only apply to auto-enrolment funds.

>The average charge on a pension set up in 2012 was 0.51%, but the Office of Fair Trading (OFT) estimates that there are more than 186,000 pension pots with £2.65bn worth of assets subject to annual charges of more than 1%. Older pension schemes, set up more than a decade ago, were found to be charging as much as 2.3% in annual fees.

http://www.bbc.co.uk/news/business-24736960

So the pension schemes with the charges over 2% are remaining untouched for now, but Auto-Enrolment schemes, which generally have charges below 1%, are going to have their charges capped. What an utterly meaningless gesture.

I know Steve Webb has said they're looking at scrapping active member discounts (AMD) as part of a broader review of pensions charges, on the basis of "That means when you leave a firm they jack your charges up - we don't think this is right so we will probably ban those", but I don't think they've thought this through; if a scheme has an AMD then, unsurprisingly, the charges are lower for active members of the scheme and if you leave you can usually keep the lower charges if you continue to contribute £20pm. Scrapping the AMD may benefit some people, but it's going to make more people worse off.

>>3901
Thinking about it, if the average annual charges on a new pension scheme was 0.51% last year and they introduce a cap between 0.75% and 1% then there's the risk that this will lead to the average charges increasing as providers decide to charge the maximum. It's what happened with stakeholder pensions.

I was at a presentation by Standard Life and Aviva earlier.

They said someone retiring now would need a pension pot of ~£250k in order to get an income in line with minimum wage and ~£600k to get one in line with national average earnings.

They're also anticipating an auto enrolment (which the Aviva bod said is a substitute for the State Second Pension, except the government aren't the ones paying it) clusterfuck next year. So far it's mainly large companies who have had to have a workplace pension in place and of the ones that have opted for Nest, 98% have sought financial advice and consultancy. Bear in mind the Nest is seen as the simple route and these are huge organisations who have large finance and payroll teams who would have the resources to deal with this in-house. Next summer alone there will be over 30,000 SMEs having their auto enrolment staging date and at the minute many pension providers are scaling back what they are offering because they don't have the capacity to cope and there isn't enough advisers around either (that is assuming they could afford the advice even if they wanted it; prices will be hiked up because many companies are expected to leave it to the last minute). The guidelines from The Pensions Regulator are very stringent and complex and it's not expected that all of these companies will cope if they go it alone and the regulator is rumoured to be very hungry to issue heavy fines and make examples of companies not complying. Apologies if rambling, I'm on my phone.

>>3935
I can follow what you're saying but I don't understand the implications. What's going to actually happen, and is it good or bad?

>>3936

We're all fucked. In the earhole.

>>3936
Depending on the size of the employer, the fine for not having a scheme in place and complying with the duties The Pensions Regulator has set out can be up to £10,000 for each of day of non-compliance. It's expected that not all companies who need to have all this in place next year will be able to cope, so don't be surprised if you hear of relatively large fines being dished out to grab headlines.

On a side note, It's early days but the opt-out rates for being automatically enrolled in a workplace pension scheme is ~8% when it was predicted to be ~30%.

One of the Aviva men had a meeting with Steve Webb on Wednesday. He said that the charges cap will be at 0.75% and trail commission on pensions will cease in a couple of years or so. Both Standard Life (whose charges on Auto-Enrolment schemes range between 0.6%-1%) and Aviva representatives are against the cap, as they see it as a PR stunt but they can't back down because the issue has become politicised (even Cameron has Tweeted about capping charges to help 'hardworking people' save for their retirement) - the Standard Life reps said it would better to focus and raise awareness on fund choice as the majority of people stay in the default fund and it won't be suitable for everyone. They fear that the caps will push people towards cheaper funds which don't tend to perform as well; they said, in general, that their actively managed funds cost 0.07% more than their passive equivalents but perform 0.5% better.

They'd also prefer reform to offer more certainty on what income people will receive when they retire, as one of the main reasons people don't take out a pension plan is because they have no idea of what they'll end up with. When annuities were introduced the expectation was that someone would only live for a decade after retiring, nowadays someone has to live for 18 years to 'break even'.

>>3945
>Both Standard Life (whose charges on Auto-Enrolment schemes range between 0.6%-1%) and Aviva representatives are against the cap

The Pensions Strategy Director of Legal & General has come out today and argued the case for the cap, actually he believes it should be lower (they have an Auto-Enrolment scheme with an AMC of 0.35%, but all of the funds have additional charges of at least 0.1%). This isn't entirely surprising as they tend to offer less of a service than other pension providers.

His argument is that charges of 1% were achieved in 2001 with stakeholder pensions and there has been significant technological advancement over the previous 12 years to accommodate a low cost default cap of 0.5% that people don't have to pay more than if they don't want to and then people can pay extra if they want more fund choice, guarantees, advice and any other optional extras.

_{Polite sage because I doubt anyone else cares about this.}

They've been talking about salary sacrifice at work. They gave me a statement that shows that if they reduce my gross pay by nearly 6% my net pay will remain the same because there's less income tax and national insurance to pay along with no personal pension deduction. They then pay an employer contribution that is just under 13% greater than what's paid overall now. Any reason I shouldn't do it?

>>3947

Only if you'll be applying for a mortgage in the near future or you feel you have a misguided duty to pay more tax than you have to.

>>3948
This. Even HMRC are alright with salary sacrifice as long as it's offered to all employees and doesn't take someone below minimum wage.

Last thing I'll say on the pension charges cap, the FT say it is a bad idea but can see why Webb has gone for it as it "offers the chance for jolly soundbites. It is not, however, based on good economics." The OFT also recommend against a cap.

http://www.ft.com/cms/s/0/96800140-4fa5-11e3-b06e-00144feabdc0.html#axzz2l2SPbuVJ

The problem with salary sacrifice and lowering your gross pay is the impact on the "ladder". Typically once you get a rung up you should have a floor under you that increases each step of the way. By accepting this drop you're knocking yourself down if you move to another employer or role.

>>4049

Disclosing your previous salary is just naive. People who know how to negotiate don't answer the question, instead saying something like "my previous role was fundamentally different and I don't think my compensation in that role is relevant". Employers like to bully people into answering the question because it makes it easier for them to underpay you, but nobody you want to work for will refuse to hire you simply because you won't disclose your previous salary. A quick Google will reveal dozens of articles like the following, with recruitment experts unequivocally advising against disclosing your previous salary:
http://www.pbs.org/newshour/rundown/2013/06/ask-the-headhunter-never-ever-disclose-your-salary-to-an-employer.html

>>4049
I don't agree with that, you'd still know what your notional/reference salary is and any % pay increase or overtime pay should be based on that rather than your post-sacrifice level.

>>4050
I'm not a good negotiator, so when I've been asked it I tend to lie and inflate what I'm earning. By doing this I ended up earning £4,000 p.a. more in my previous job than one of my colleagues who just accepted what she was offered.

Apparently Mexico is the only developed nation with a State Pension less generous than ours.

http://www.telegraph.co.uk/finance/personalfinance/pensions/10477503/Only-Mexicans-have-a-worse-state-pension-than-the-British.html

That isn't entirely surprising when you consider that the system in place here has far more emphasis on private pension provision than other countries. However, too many people aren't saving enough (or at all) and the OECD are warning that high levels of youth unemployment (and a likely SPA of 70 for babies born today) are going to lead to many living in poverty in old age.

http://www.theguardian.com/business/2013/nov/26/uk-pension-reforms-oecd

>>4050
Doesn't apply to the UK - when you join a new firm you generally have to present your P45 from the previous job showing exactly how much you have earned and how much tax you pay. I have seen people get fired from a new job because they excessively lied about their previous salary.

Employers know that the main reason for changing job is to get a pay rise, so its perfectly ethical and normal to ask for a higher salary than the one you are being paid (you don't have to join them if they don't make you an offer you want, after all), but lying about it or refusing it at best won't get you the job and at worst can easily get you fired in the first week - I have genuinely seen this happen in one place I have worked.

>>4095
Our state pension bill is already far too large. I'm glad it's as low as it is.

>>4096
Was this in a small company? I assume with larger companies it's something that the HR drone will put on file and not really pay attention to.

>>4098

Indeed, I have never needed to show a P45 - the old: I left at short notice and HR have completely failed to provide me one has been fine. They just file details with HMRC and all is good.

>>4096
Nonsense. The quickest P45 I've ever had took 4 weeks to arrive, and only because I bitched about it coming in before the end of the tax year. Clearly you shouldn't lie about it, but refusing the information shouldn't do you any harm. If the person on the other side of the desk doesn't like that you won't tell them the number, that's their problem, and clearly they're not someone you want to be working for. Decline politely, and if at all possible drop hints that this job is not your old job. If they still don't get the hint, ask them to look at it this way: Your salary is confidential information, and I'm sure they wouldn't want you giving that away to their competitors, would they? This goes equally well for people who don't have control of their previous work and therefore won't have a portfolio of evidence to show off. (I've had someone sat in an interview with me show me documents stamped PROPERTY OF xxxxxxx PRIVATE AND CONFIDENTIAL. Needless to say, that was the moment they landed squarely in the "no hire" pile.)

>>4098
It was in a large firm - a bank.

>>4100

Handing over your P45 means that you'll get the right tax code off the bat, but it is by no means mandatory, the only information you *need* to provide is your NI number.

>>4105
Normally, you can just wait and it'll work itself out the following month, but if you're starting a job in a March with more than a month's salary left of your personal allowance, there is no "following month" and you'll be waiting a year for the refund to come through. Either way, the point is that it's rare to be able to hand in a P45 on day 1.

>>4097
The National Insurance fund has been revalued down recently, but there is still a surplus of around £38billion and it has been increasing around £2billion each year.

I know there's an anticipated crisis from the baby boomer population spike, but any future funding problems would be greatly reduced if successive governments used the NI fund for its actual purpose instead of borrowing from the surplus to reduce borrowing from other sources. However, they'd rather reduce the future State Pension (at least not keeping up with inflation) or increase NI rates for workers and scaremonger than actually do this.

On the subject of National Insurance:

According to City A.M., the reason that wages have stagnated is because employers are having to spend more on the likes of pension contributions and a hike in employers NI.

>The proportion of compensation that went to these non-wage benefits increased from 13 per cent in 2000 to 17.2 per cent in 2012, driven by higher pension contributions and a stealthy hike in employer NICs.

http://www.cityam.com/article/1386037419/taxes-and-pension-contributions-are-squeezing-workers-pay

There's also calls to scrap NI and replace it with a personal welfare account to wean people off their reliance on state benefits.

>Today, people are treated as if they have paid contributions when they haven't, and claimants with no contributions record get treated much the same as those who have being paying contributions all their lives. Britain is almost alone in Europe in paying unemployed people with weak or non-existent employment records the same as those with a long history of employment.

>Mr Saunders said National Insurance has been subject to so much "tinkering" over the last 70 years that it has become "almost unrecognisable" and people no longer understand how their contributions are being used.

http://www.telegraph.co.uk/finance/personalfinance/pensions/10472328/Scrap-National-Insurance-and-force-personal-pension-saving-says-think-tank-Civitas.html

>>4262

It's the catch-22 of the Pension Guarantee Credit. The maximum state pension is £110.15 a week, but the Guarantee Credit is £145.40 a week, rendering the state pension as largely meaningless for a vast swathe of pensioners.

Not unreasonably, we want to ensure that all pensioners have a decent standard of living in retirement, but it's difficult to implement that without undermining the incentives to save and pay NI. Some middle-income pensioners will benefit from their state pension as a top-up to a private pension, but for those on very low or very high incomes it is essentially irrelevant.

>>4262
>If “employers’” NICs were abolished tomorrow, wages would increase to compensate
Rather wishful thinking, I fancy.

>>4264
Employers don't have to pay any NI on the first £148 (IIRC) of weekly earnings. Somone on minimum wage working 35 hours a week would be earning £220.85, so if the NI saving was passed on it would be just over a tenner a week and effectively increase their wage to £6.60 an hour. For someone earning £20k p.a., employer NI works out at around £32.65 per week (just under £1,700 p.a.).

In reality, I think in most salary sacrifice pension arrangements pass on 50% of the employer NI saving and keep the rest for themselves (if there wasn't anything in it for them then they wouldn't do it) so it wouldn't surprise me if that is what the increase in gross pay would be.

>>4265
>if the NI saving was passed on
Again, wishful thinking. Sure, they could pass on an extra £10 a week to each of their minimum-wage employees, or they could simply pocket the extra £500 per person for themselves. For small business owners still in a tight spot, they might find an extra £5k that they can keep in the business, or pay themselves, a better prospect. For larger companies, you just know that a million-pound saving from abolishing ER NIC is going straight to the CEO or the shareholders.

>>4262

You choose to quote City AM? What the fuck, lad. I have met three of their "journalists". Their rigorous training in practical economics was, in all three cases, a degree in English Lit.

>>4266

This.

>>4268
Yes, because as we all know, 'trained economists' are always the best analysts and no one else's input is of any value at all. Moreover, your anecdotal evidence is a compelling reason to accept your ad hominem and appealing to authority argument out of hand.

Arsehole.

>>4271
I'm not him and nor am I a journo, but he's right - CityAM is a pile of steaming shite.

>The date when people must be 68 to draw a state pension - formerly scheduled for 2046 - will be brought forward to the mid-2030s, Chancellor George Osborne will announce later. Plans to be announced in Mr Osborne's Autumn Statement mean the age could rise again to 69 by the late 2040s.

http://www.bbc.co.uk/news/mobile/uk-politics-25225532

Looks like everyone under the age of 30 will be at least 70 before they receive a State Pension. Start planning now (be it private pension saving or something else) if you want to be able to retire before then.

>>4275

What plans do you suggest then?

>>4275

I fuckin' knew that would 'appen.

This is why I don't bother with a private pension.

>>4276
Bitcoin.

>>4277
Of course it would, the proportion of peoples lives that they spend retired has been increasing enormously, even this won't offset it. You'd have to be a dumb cunt not to have seen it coming.

>>4278
I've got a better idea. Monopoly money.

>>4280

Gold!

>>4280
Litecoin.

>>4276
The traditional alternatives are investing in property or in equities using a different wrapper, like ISAs. The problem with the latter is many people have poor self control and end up frittering it away.

I have a decent pension scheme at work, so my retirement planning is a mix of that and ISAs. When I'm 55 I plan to semi-retire and do income dtawdown with my pension. That is assuming that the government don't move the goalposts and change the minimum age you can take private pension benefits from. Not many people realise this, but the Stage Pension Age when it was originally introduced was 70; the intention was that you'd get it and then die around 5 years later.

>>4277
Isn't this more of a reason to have a private pension?

>>4283

ISAs? What interest rate do you get with yours?

>>4288
>in equities

Pensioners are being 'burgled' by insurers on annuities

A report has called for an unprecedented investigation into the “excessive” profits the insurance industry is making from annuities, adding that it was nearly impossible for a pensioner to know if they are getting a good deal.

The report said that some insurers in the UK were making up to 20 times more profit on an annuity than other products in their business. Research carried out this summer suggested that insurers make up to £35,500 profit on each £100,000 taken from savers over a 25-year retirement by investing the customer’s money.

http://www.telegraph.co.uk/finance/personalfinance/pensions/10506925/Pensioners-are-being-burgled-by-insurers-on-annuities.html

It's quite surprising that there isn't a Compare the Market for buying annuities.

It has been well publicised that you shouldn't buy an annuity from your existing pension provider, but many people need their arses wiping for them and simply don't read the information they are given (they should get a very clear and easy to understand booklet from the Money Advice Service and key features documents from their pension provider/prospective annuity provider) and don't search the market for better rates. There is nothing complicated in contacting a few annuity providers and asking for them to give you a quote based on the value of your pension fund; the only variables are whether you want a guarantee period for if you die early (usually 5 or 10 years), whether you want a proportion to continue to be paid to a spouse when you die or whether you want the payment to be level or to escalate annually. It's a bloody myth that it's complex.

It doesn't help when annuity providers are able to make a nice profit from investing the pension pots without passing this on to future annuitants, mind.

The Graun are saying people in their 20s should be putting 12% of their salary away for retirement and even more if they leave pension saving until later.

http://www.theguardian.com/money/2013/dec/14/pension-advice-save-early-big

>>4358

I expect to die young, so fuck it.

>>4359
I know someone who was made redundant in his late 50s, decided to take his pension early after his payoff had run out and then died a couple of months later. If he hadn't taken his pension then it would have been paid out as a tax free lump sum to his family and they'd have been about £100k better off.

I've heard that if you get enrolled in a pension scheme the government have made it a bit of a hassle to opt out in the hope that people won't be bothered - something about going to the far end of a fart to request the necessary forms because your employer isn't allowed to give you one so they can't pressure you into opting out. Even if you do opt out your employer will already have made a deduction from your pay and you'll have to wait until the next payroll to get it refunded. At least, these are the gripes I've heard from colleagues.

>>4360

And he'd have still been dead. Big whoop.

If you could make those kinds of predictions you'd have a very unusual and special life indeed.

>>4734
It's quite a well known risk of taking your benefits early, especially if you're not doing something like drawdown. You don't need to be clairvoyant to know it's generally not recommended.

>>4736

Being dead is a known risk? I doubt it bothers him now.

>>4738
If you take your pension early then you're more likely to die prematurely. Now that's scientific fact.

Some people use their pension funds to buy an annuity before the age of 65 because they're retiring/semi-retiring early, but most people do it because they want to get their hands on the tax-free cash. It's a generally bad idea to do it if you're carrying on working full-time because you'll get a lower annuity rate for being younger and this will be fixed for the rest of your life, you're missing out on years of your pension fund growing and you'll be paying tax on the extra income which you may not even need.

Also, before you crystallise your benefits your pension fund is effectively another form of life assurance. If you take your benefits early in the form of an annuity, like the chap mentioned in >>4360, then you've lost this completely. A much more sensible option would have been to use income drawdown - you can take the tax-free lump sum and then opt not to take the income until you actually need it. The remainder of the pension fund that you have drawn down (e.g. if you wish to take £10k tax-free cash then you'd need to vest £40k and the remaining £30k would be in a post drawdown pot) would continue to be invested and should keep growing - if you were to die then it could be paid out as a lump sum, although after 55% tax*. However, I think most providers require you to get financial advice first and that can cost a fair whack.

_{*It's not actually as bad as it sounds. A £10k gross pension contribution would cost a basic rate taxpayer £8k. If they died after taking the 25% tax-free lump sum then the remaining £7,500 would be taxed at 55% (i.e. £4,125), so the total paid out would be the initial £2,500 plus the £3,375 = £5,875. As the net cost was £8k, this makes the effective amount lost in tax £2,125 (26.6%). For a higher rate tax payer the net contribution would be £6k, so the effective amount lost in tax is £125 (2.1%).}

So when are interest rates going to finally go up high enough (or at all) to make saving and pensions worth while? Right now and for some time it has felt punishing to those who spent their lives doing the right thing while the BoE and government push everyone to breaking point and bend over backwards for those who were reckless and lived beyond their means.

>>4756
Oh, Dr. Rev. Lord Ian.

>>4756
Wouldn't it make sense to invest in a pension while things are low? Makes more sense to me than buying high.

>>4756
Don't expect the BoE to raise rates yet, even if the unemployment rate goes below 7%, it hit 7.1% as of most recent data (released today). The expectation was that it wouldn't go below 7% until the second half of this year, or possibly next year, so I wouldn't expect any real rate rise until next year.

Also 'savers' are no different to anyone else doing stuff with their money as far as I'm concerned, the fact that it's in a bank account rather than in bitcoins or bags of flour doesn't make it special.

>>4761

It does. Without savers you'd have no economy. See: Run on the bank.

>>4761

Saving is synonymous with investment. Without depositors, a bank can't lend; Without lending, businesses can't grow. There's a happy medium, between the absurd velocity of money of hyperinflation-era Zimbabwe and the deflationary depression of present-day Japan.

>>4760
Horses for courses. The key determining factor in whether to put money into savings or a pension pot is whether you want to see it again any time soon. Pulling money out of a pension fund is generally not a good idea.

>>4764
Savings haven't been synonymous with investment for a very long time.

I never thought I'd see the day when .gs would extol the virtues of lending.

>>4765
I thought the point of putting money in a pension pot was that you don't want to see it again any time soon and are locking it away for decades instead?

>>4767
That's what he just said, contrasting pensions with the more medium-term investment of savings accounts.

>>4769
Oh, right. Now I see. Time for bed.

Polly has written a fluff piece about Steve Webb's decision to postpone putting a cap on Auto Enrolment charges for at least a year. It may be just me, but it seems like a meandering mess that glosses over the subject matter so she can have a pop at the wicked corporations (even though if you read the pension industry's response to the DWP consultation they are overwhelmingly in favour of standardising charges and making disclosure of them mandatory) and the nasty Tories (Steve Webb is a twat trying to grab headlines). I'm not convinced she actually knows the difference between a pension fund and a pension provider. In fact, it's worse than that - scaremongering and discouraging young people from retirement planning, when the average charge on a pension scheme set up in 2012 was a reasonable 0.51% (almost all of the money in schemes with high charges were set up over a decade ago) and there has been several reports recently warning that many are likely to face poverty in old age because they have barely put any thought to funding their retirement, is incredibly reckless. Polly is trying to perpetuate the narrative that pensions are confusing and a rip-off without really trying to understand the subject matter because it goes against what she wants to preach. She's misrepresenting Mitchell Johnson at the end; he's recommended having one combined annual allowance for pensions (which will be £40k for 2014/15) and ISAs (£11,880) which you can split how you like, but Polly has somehow construed that as meaning they're going to get rolled into one account. The only way I can fathom the line 'The Treasury would add £1 for every £1 saved, equal relief for all' from what I can see in the report (http://www.cps.org.uk/files/reports/original/121123104830-costlyandineffective.pdf) is that she has completely misunderstood the recommendation about scrapping higher rate tax relief on pension contributions so that everyone gets the same % rate - I can find no mention of this outside of her article.

http://www.theguardian.com/commentisfree/2014/jan/24/steve-webb-pension-u-turn-dead-duck

>>4775
>and the nasty Tories (Steve Webb is a twat trying to grab headlines)
That's not really a fair criticism. Steve Webb is in fact a headline-grabbing twat. Otherwise, you're spot on.

>>4776
>Steve Webb is in fact a headline-grabbing twat

That's what I meant. Sorry if I wasn't clear. Some of Polly's criticism of him is unfounded though:

- She is trying to make it sound like the DWP only yesterday announced that the charges cap would be limited to just Auto Enrolment schemes, and only as a hasty response to media pressure, whereas the BBC link in the OP from last September mentions that they were going ahead with a consultation on capping Auto Enrolment schemes.

- It's not really a U-Turn. The consultation paper, which ran until November, asked whether it gave employers sufficient time to get compliant arrangements in place (April 2014 for all companies staging after that date, April 2015 for all companies staging October 2012 to March 2014) but the Regulatory and Policy Committee last month pointed out the major flaw that they'd not really considered the impact this would have on pension providers. Plus, it's recommended that a company has at least a year to prepare for Auto Enrolment; telling companies that have to stage 10 weeks from now that they have to comply with a cap that they're hastily introducing is incredibly poor planning. It's much better that they postpone it and actually think this through than steam ahead.

It's hard to take any of Polly's article seriously. It's little more than blindly following statements from the Shadow Pensions Minister and then coming up with any old shite to try and reinforce what he's saying. You'd have thought her critical thinking skills would have kicked in before coming up with the equal tax relief line; if I contribute £1,000 then the government will match that will a further £1,000? How can she not comprehend how economically ruinous and unsustainable that would be?

>>4756

I can see why QE and low interest rates are bad for savings, but why are they bad for investing in pensions?

>>4810
They're not really. Pension funds tend to grow their value by a combination of playing the market and investing in high-dividend stocks. Interest rates don't really come into it, and a pension is generally long-term enough that QE doesn't really matter either.

One of yesterday's Editor's Picks on the Graun was another opinion piece of pensions - this time by some bint at Investors Chronicle.

http://www.theguardian.com/money/2014/jan/28/pension-under-30-retirement-saving

She's saying that under 30's should be removed from pensions and should invest in a new 'giant fund' instead. If she's going down that route then it would have been better to expand the State Second Pension, which is being replaced with a flat rate one, rather than this half baked idea.

She's mentioned that the OFT estimate there's around £40bn of pension money in schemes that offer poor value for money but, rather misleadingly for an article on young people and pension investing, has neglected to mention that these are almost all in old or smalls schemes which is highly likely won't be applicable to them. Is it just me that doesn't find the charges on my pension complex? I received a letter from my employer telling me what the charges would be, I received a Key Facts illustration telling me what the charges would be, I received brochures from Aviva with details of the charges on their internal funds and on the externally managed funds they offer (which I can also view from their fund factsheets), there is a charges section on my annual statement and if I look at my policy online it tells me the details of the additional charges I'm paying on some of my funds.

It's more a case of people not bothering to read the information they are given and they need their arses wiping for them. There needs to be a change of mentality more than anything; it's not uncommon for the value of a pension fund to be in the six figures by the time someone reaches 65 and they wouldn't neglect other aspects of their finances in this way - I reckon that people should take more responsibilty and review their fund choice at least every five years, consider transferring any old pension policies into a scheme with a new employer if the charges are lower (if the charges are higher than they should look at consolidating when they leave that job) and, as charges are continually going down, every 5-10 years or so they should review what they have and see if it would be better for them to set up a new pension policy and transfer their existing benefits in; many pension providers offer lower charges on transfers in than they do on regular premiums. Telling people how complicated and how hard it is to understand isn't the solution as that will just put them off; raising awareness so that people are more likely to shop around would be much more effective at bringing charges down and making the market more competitive, especially if it causes employers to put more consideration into having a good scheme for their employees.

I also don't buy her argument that existing pensions are too small to benefit from economies of scale. For example, Aviva's UK Equity Fund has assets under management of £9,799 million and their 40-85% Mixed Investment Fund has £16,830 million. Before the government launches a cap on pension funds they need to look closer to home first; NEST has an annual management charge of 0.3%, but it takes 1.8% up front of each contribution paid in. This makes the true cost of NEST 4% in the first year and it could take greater than 18 years for the overall charges to average out at below 0.5%. NEST should not be used for anyone aged mid-40s, but you won't see that mentioned in the Guardian fluff pieces because that would involve having a modicum of understanding of the subject matter. I wish they'd employ more specialist writers who are qualified enough to write pieces with merit instead of employing foghorns who mouth off from one subject to the next without really grasping a proper understanding of what they are spewing out.

>>4854
Nit.then.they.wouldn't.sell papers. Indeed they.still don't. it.they'd sell even less.

Apologies for the.punctuation, aim drunk and autocorrect is doing it's work.

>>4855
Last night before court is it mate?

>>4856
I wouldn't know.you PAEDO.

>>4857
Do ya rip.

>>4858
what does that mean,

>>4859
It's prison slang for shut up and do your time.

>>4860
IF YOU CAN'T DO THE TIME, DON'T DO THE CRIME.

The government are considering privatising the administration of the State Pension or, judging by the last line, the Guardian could be engaging in some Daily Mail style scaremongering.

http://www.theguardian.com/politics/2014/feb/09/state-pension-service-privatisation-dwp-plans

>>4894
Sounds like someone in DWP had a crazy idea, and the journalist conveniently left out the part where everyone else in the room pointed out just how crazy it was.

>>4895
Why's it crazy?

>>4896
I'd have thought that was obvious.

>>4897
Evidently you thought wrong, so please explain.

>>4898
OK, let's shine some light into that skull of yours and see if there's a brain in the way. If they can't make savings on efficiency or staffing costs, and still need to make a profit, where's the saving to the taxpayer going to come from?

>>4899
> If they can't make savings on efficiency or staffing costs
They will, because they have to.

>>4903
No, lad. Re-read the article. They literally can't. There's no more scope for efficiency savings, and they'd have to take on all the existing staff on their existing pau and terms, no redundancies allowed.

>>4761
The BoE have moved the goalposts, apparently we're not having the right kind of growth.

90% of people know that they can a better annuity at retirement if they shop around, but only around half can be bothered to do so - I'd say this is more a case of people not giving too much attention to one of the most important financial decisions they have to make than the system being 'broken', although it certainly has its flaws. It's well known in many industries that lazy customers who stick with one provider/insurer won't get the best deal, some people won't be happy until they don't have to take any personal responsibility for their own lives whatsoever and get their arses wiped for them instead.

http://www.telegraph.co.uk/finance/personalfinance/pensions/10637538/Pensions-rip-off-savers-losing-thousands-of-pounds.html

Thinking about it, the solution is bleeding obvious. If the government makes it compulsory for annuity providers to publish a table of their standard rates each week, say what £100k could buy someone on their 55th to 65th birthday, and gets The Pensions Advisory Service to compile them in one place then there's no excuse not to shop around and it could see rates rising. It really is that simple, no need for bluster and the FCA to investigate for a further year.

In the budget they've said that they're increasing the limits for trivial commutation (cashing it in because the values are too low) from £2,000 to £10,000 from one employment and from £18,000 to £30,000 for your overall pension benefits.

If I was in my 50s or older with no pension benefits/none from my current employment I'd get auto enrolled and then cash it all in when I'm old enough - most of it will be subject to income tax, but you'd only be funding about 40-50% of it.

>>5071

Annuity rates will probably shoot up to try and make them attractive (shares in Partnership Assurance, an annuity specialist, have more than halved since the Budget). Back in the day Norwich Union (now Aviva) used to have absolutely terrible annuity rates because people who took out a pension with them had no choice but to use them for an annuity, when it was made possible to shop around their annuity rates suddenly went up to make them competitive. They're all a bunch of shysters.

>>5086
About time, annuities are a massive scam.

>Osborne unveiled a series of reforms that come into force on 27 March, abolishing several technical rules that will mean pensioners can take more of their savings as cash immediately. He also promised by April next year to remove all remaining tax restrictions on access to pension pots. "Pensioners will have complete freedom to draw down as much or as little of their pension pot as they want, any time they want. No caps. No drawdown limits."

>The existing ability for pensioners to take 25% of their pension pot tax-free at the point of retirement will remain, but the tax rate on drawdown of the remaining cash will be slashed from 55% to 20% for most.

http://www.theguardian.com/uk-news/2014/mar/19/chancellor-scrap-compulsory-annuities-pension-overhaul

What 55% tax are they on about? As far as I was aware, drawdown income was taxed at your marginal rate and it's only taxed at 55% on death if your beneficiaries decide to take it as a lump sum. Am I missing something or is it the Graun not understanding money again?

>>5088
http://www.hl.co.uk/pensions/income-drawdown/what-happens-when-i-die

I thought this poster was a joke at first. Then I found out it's legit.

Good grief.

>>5090
The thing I hate most is Hardworking. Hardworking people. Hardworking parents. Hardworking tenants. It's the worst fucking buzzword, even worse than that godawful One Nation shit.

Fuck all of them

>>5091

It's to contrast them with dolescums isn't it? Like people espousing "family values" to contrast themselves with gays.

>>5089
That doesn't mention anything about being taxed at 55% while you're still alive.

>>5090
The average voter is a mong, and politicians know this.

>>5090
Do you mean the image or its contents? I know those two cuts are real, but if that image is for real then evidently Central Office are back on the crack again.

>>5091

It's to appeal to the down-to-earth, normal, hard working, honest, sensible, normal, law abiding, tax paying, normal, hard working, honourable, decent, reasonable voter.

>>5099
The image is real.

http://www.bbc.co.uk/news/uk-politics-26658742

>A Conservative advertising campaign drawing attention to changes to beer and bingo taxes in the Budget has been criticised as "condescending".

>The online advert said the 1p cut in beer duty and the halving of bingo duty to 10% would help "hardworking people do more of the things they enjoy".

>A picture of the ad was tweeted by Tory co-chairman Grant Shapps. ( https://twitter.com/grantshapps/status/446363611972534272 )

>>5102
Shame they couldn't help hardworking people do more of the things they need, like paying the leccy or getting to work.

>>5104
But they did do that, by raising the personal allowance.

>>5105
Yes, because clearly an increase in the personal allowance doesn't help you pay for beer and bingo.

>>5106
What are you even arguing against?

HOORAY FOR GIDEON

NO MORE ANNUITIES

WELL DONE ON WINNING THE NEXT ELECTION

We could still have a very cold winter yet, Gids. It's not over.

Jesus! I don't think I've ever seen quite so much Old Etonian jizzum roll down the chin of a newspaper before. Not to say it's never happened of course.

http://www.dailymail.co.uk/news/article-2584819/Pension-power-people-Finally-Chancellor-stands-savers-radical-reform.html

>>5110
To be fair, Gideon is the first Chancellor in quite some time to actually do something positive about pensions instead of just milking them to fill his coffers and not giving savers anything back in return. New Labour were absolutely terrible for people with money in a pension.

Balls' response is that people will squander their money if they can take it all at once; Labour really hate letting people take personal responsibility for their own lives.

>>5112

>Labour really hate letting people take personal responsibility for their own lives.

So what do you think happens when they do squander their money once they can take it all at once? They land on the safety net and cost everyone working many of our hexagonal pound coins worth in teabags and small dogs.

>>5117
The average pension pot is what? About £25k? If you take the 25% tax free cash then either way you have £18,750 to either buy an annuity (an annuity rate of 5% = £937.50 a year before tax) or as a lump sum (if a basic rate payer then you have £15k after tax). When we're talking about sums like this you may as well take it at once and spunk it on a new kitchen and a holiday, although I believe most people would keep it in their pension and only draw it down when it's needed.

It's up for consultation rather than it's definitely happening, along with raising the minimum age for taking private pension benefits to 57 when the State one goes up to 67.

>>5111
And what of slumps the market experiences and thusly in investment from funds comprised of pension savings that can and do lead to the dissolution of said funds?

>>5121

>The average pension pot is what? About £25k?

Surely not? That's the average yearly salary in the UK. You're telling me that after 40-50 years of saving up, they only managed to save one years worth of mony?

>>5125
An FT article from a couple of months ago says the Association of British Insurers have it at £33k, so not much better.

>>5122
What of them?

>>5110

It's no worse than Toynbee; she's simply furious that people are to be trusted with their own money, I guess because it goes against her ideals. How much is she on? £150k?

>>5088
>What 55% tax are they on about?

Answering my own question, but turns out it's:

>3.13 Under the new system, everyone will be entitled to flexibility, regardless of their total defined contribution pension savings. Individuals will be able to draw down on these pension savings whenever and however they wish after the age of 55. Any amount they draw down will be treated as income and therefore subject to their marginal rate of income tax in that year rather than the current 55% charge for full withdrawals. The tax-free pension commencement lump sum (usually 25% of an individual’s pot) will continue to be available.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/294795/freedom_and_choice_in_pensions_web_210314.pdf

_{Polite sage because nobody cares.}

Savers locked into rip-off pensions and investments could be given a free exit or moved to better deals, regulators will say next week.

The City watchdog is planning an inquiry into 30 million policies sold by insurance companies from the Seventies to the turn of the Millennium, The Telegraph can disclose.

http://www.telegraph.co.uk/finance/personalfinance/pensions/10728440/Savers-locked-into-rip-off-pensions-and-investments-may-be-free-to-exit-regulators-will-say.html

Is there any wonder people don't trust pensions and life companies?

>>5142
I do wonder how in fucks name Labour can oppose the move.

>>5143
I can't find any mention of them opposing it. But they were calling for this to happen in 2012.

>>5144
I can't either. I think we've come a long way with pension charges in the past decade - in 2005 it was seen as acceptable for a Stakeholder Pension to have an annual management charge of 1.5% for the first 10 years before dropping to 1%, which is actually higher than when they were introduced in 2001. Now the average for new schemes is around 0.5%.

They really are bastards when it comes to longstanding customers, though. It's about time the light was shone on these practices.

>>5144
They said so several times following the budget, they have problems with self responsibility.

>>5146
I think you're confusing the story linked in >>5142 with the Chancellor's liberalisation of annuity rules.

This seems to have gone under the radar after the budget, but the government announced towards the end of last week that, with effect from 1 April 2015, the default fund for qualifying workplace pension schemes will be capped at 0.75% and they'll review it in 2017.

It's quite pointless by itself, but it may be stepping stone for a cap on the pre-2000 schemes with extortionate charges.

Steve Webb has said that the next government will have to look into increasing the minimum contributions for Auto Enrolment from 8% as it won't be enough for many.

Whether you agree with him or not, it's refreshing to have a Pensions Minister who actually gives two shits about the subject matter.

Apparently we have one of the most sustainable pension systems in the world. God help everywhere else.

http://www.telegraph.co.uk/finance/personalfinance/pensions/10737425/UK-pensions-make-top-10-in-global-index.html

>Employees will be able to put their money into Dutch-style “collective pensions”, shared with thousands of other members, in a radical shake-up of workplace pensions expected to be disclosed in the Queen's speech on Wednesday.

>Supporters say retirement incomes could rise by thousands of pounds in the so-called “mega funds”, which are regarded by some as less vulnerable to variations in the stock market.

http://www.theguardian.com/money/2014/jun/01/government-plans-dutch-style-collective-pension-scheme

I don't geddit.

>>5204
That page won't load for me, but maybe they massively increase the benefit of the pension scheme for it's members by running as a not-for-profit and cutting out the fucking pirates who usually run these things?

>>5205

http://pastebin.com/hnMXuA74

>>5205
If it's going to be organised by the government then it's bound to be a fuck up; as mentioned earlier in the thread, if you are enrolled into a NEST pension scheme (which was set up by the government so that every employer has access to set up a pension scheme) then there's the eye-catchingly low AMC of 0.3% but, because they take a charge of 1.8% of each contribution they receive, it takes nearly 2 decades for their annual charges to average out at around 0.5%. By comparison, if you went to someone like Aviva, Aegon, Friends Life, Scottish Life or Standard Life you'd have access to most, if not all, of their internally managed funds (which, by definition, are collectively pooled) for no additional cost to their base charges, which average out at 0.5% for new schemes. If you look at the main funds they look after they are fucking huge.

There's probably something different about this arrangement I'm unaware of, like your benefits at retirement. It sounds like something more suited to the public sector and combining all of the dozens of local government schemes into one. Also, the timing is strange; I can see the take up rate being very low because so many companies will have recently set up a scheme for Auto Enrolment and don't want to change.

>>5207
>then there's the eye-catchingly low AMC of 0.3% but, because they take a charge of 1.8% of each contribution they receive, it takes nearly 2 decades for their annual charges to average out at around 0.5%.
... after which they'll average out below that figure. Obviously the net effect will depend on the performance of the fund at the end, and the contribution charge won't be levied on the return.

Apparently tax relief on pensions is going to be one of the electioneering 'battlegrounds'. The Centre for Policy Studies say it should be 50%, but only on the first £8k, the Lib Dems want it capped at somewhere between 20-30%, the Tories haven't come up with a plan yet and Labour want to keep it at 40% for higher rate taxpayers but cap it at 20% for additional rate taxpayers.

The finalised details of the pension reforms unveiled in the budget will be unveiled tomorrow, following the consultation period:

http://www.theguardian.com/money/2014/jul/19/george-osborne-pensions-lump-sums-elderly-care

http://www.telegraph.co.uk/finance/personalfinance/pensions/10978439/Treasury-to-unveil-its-pensions-revolution.html

>>5214

The minimum age for taking private pensions is going to increase in line with the State Pension (i.e. raise to 57 in 2028 and then stay 10 years lower than it), so if you do want to retire early it looks like you're going to have to be a BTL parasite.

>>5214

Oh, and here's some delicious butthurt snake oil salesmen financial advisers after finding out that they're going to be funding the levy so that retirees can receive free guidance (which is more or less someone from the Money Advice Service reading a booklet and saying you can do this, this or this) when it comes to taking their pension benefits:

http://www.moneymarketing.co.uk/news-and-analysis/regulation/advisers-could-pay-30-of-guidance-costs/2012542.article

>>5125
Last year the average value of a pension pot buying an annuity/going into drawdown was £35k, but that's inflated by high earners as the median was around £20k.

>>5125>>5272

I read something the other day that said the average pension contribution (including employer payments) is around 6-7% of salary for basic rate taxpayers and double that for higher rate taxpayers. As mentioned in the OP, you really are at the mercy of having a decent employer for any hope of a reasonable retirement.

>>4746
>although after 55% tax*.

Gideon's announced this is to be scrapped. Makes sense to me as the budget announcements should see a far greater number of people going into drawdown rather than buying an annuity. I can't see there being a large increase in it being used to avoid IHT as it's rather inflexible compared to the alternatives and there's also the lifetime allowance to worry about.

It's in the news today that you can stagger taking your tax-free cash (which you could anyway) and Osborne is proclaiming that YOU CAN USE YOUR PENSION JUST LIKE A BANK ACCOUNT.

I presume there'll be measures to stop this being abused - a £100 gross contribution is £80 net, if you take £25 tax-free then a basic rate payer gets the remaining £75 for £60 = £5 quick profit.

The Pensions Advisory Service has launched a pilot where they offered free guidance to 9,000 retirees, only 2.5% took them up. So much for Gideon's posturing.

OP here, if I take this complaint to the Financial Ombudsman Service do you think I have a case? Apologies in advance if it's tl;dr.

A couple of years ago at work we switched our group pension scheme from Aegon to Aviva - the charges were lower so I transferred my pension benefits across. Last November I found out that the annual management charge (AMC) on transfers in should be 0.3% but I'm being charged the standard 0.6% on it, so I queried this with them. Aviva's response was that the 0.3% AMC is only applicable when a new plan is set up and on the application form there's a question that asks whether the transfer is to go into a new plan or the existing one. I ticked for it to go in the existing one.

However I've been over all the literature from Aviva with a fine-tooth comb and at no point is there any mention of transfers having to go into a new plan in order to get the lower AMC - I'm not aware of any other pension provider having this requirement/question on the application form so I wrote back to them saying that the only reason I can think why they have it is to take advantage of not informing their customers of it, unless they get in touch and specifically ask about it - which many people won't, in order to take the maximum possible charges from their pension funds.

The latest response I've had from Aviva is that all options were available to me at the time (even though I was kept in the dark of them) and they simply followed my instructions. They also said that they're not allowed to give me financial advice and that I should contact an IFA - which is a massive cop out to me, as I'm not asking for them advice and have never wanted it from them; I simply want them to make their customers fully aware of the options available to them in the first place instead of making customers go out of their way to get in touch with them. They're saying they don't believe they have done anything incorrect so I can either go back to them again if I have any further concerns/additional information or go to the Ombudsman.

Labour want to cut tuition fees to £6,000 and they're going to fund this by capping the amount you can take tax-free from your pensions at £36,000 and changing tax relief on contributions for basic and higher rate taxpayers to a flat 30% while lowering it to 20% for additional rate taxpayers.

http://www.theguardian.com/education/2015/feb/27/labour-would-cut-top-level-university-tuition-fees-6000

I don't think it's been entirely thought through - anyone with a large pension pot who would be affected by this will simply take their tax-free cash out before it comes into effect (unless they're keeping it in indefinitely to get around inheritance tax).

>>5490
Another populist Labour policy with no grounding in reasonable governance. Welcome to the future, gents, vote Labour at.your.peril.

>>5491
Don't you mean "vote Labour, unless you're rich?"

>>5491
Yeah, going after pension money, that's the fucking definition of populism that is.

>>5492
No, because 'tuition fees' doesn't actually mean 'money you pay', unless, fuck me, you're a rich fucker.

>>5493
Actually it represents a complete turnaround from their universal benefits attitude from 2013.

It'll cost more than it saves.

>>5494
Oh really? Poor people don't get to pay tuition fee? Wow.

Isn't it only high earners who actually pay off their tuition fee loan? I have no idea how much you have to earn for your repayments to be greater than the added interest but I don't seem to have made much headway in paying off my loan.

>>5496

It's about 18 grand, I think.

>>5497

£16,910 if you started study before September 2012, £21,000 if you started after. In either case, you only pay 9% of your income over that threshold, so most people will only have to repay their loans at a very modest rate.

As has been repeatedly stated on .gs, it's best to think of student loans as a graduate tax. You don't repay a credit card or a mortgage as a proportion of your income, and a bank won't let you off paying altogether if you're not earning good wages. Under the new system, the repayment threshold is almost exactly the same as the UK median income, meaning that you'll only have to repay anything if you're earning above average wages.

>>5498
Sorry, I wasn't entirely clear. I meant a rough point where what you're paying back is equivalent or greater than the compound interest added on. I do salary sacrifice at work so I'm paying back less than I should, as it knocks around two grand off my gross salary.

>>5499

No, the fault is all mine, I wasn't paying attention. The 'interest' being charged on student loans isn't really interest for the most part, but an adjustment for inflation. Under the old scheme, interest rates are tied to the lower of the RPI or the interbank lending rate plus 1%. The new system has a complicated sliding-scale based on your income, but most people will still only be charged interest at roughly the rate of inflation. In any case, no student loan will grow in real terms, just in nominal terms, because the only people paying actual interest are higher earners on the new scheme.

When considering how many people will repay, it's worth bearing in mind that loans are automatically cancelled after 25 or 30 years. Nobody really knows what proportion of graduates will ever pay off their loan, because it depends on long-term forecasts of wage growth and inflation. The treasury currently predicts a huge shortfall, so it's likely that we'll see another massive change in the student loan system within the next couple of years. Current forecasts are that less than 40% of loans made under the new scheme will be fully repaid.

www.parliament.uk/briefing-papers/sn01079.pdf

>>5495
Nope.

Well if we Greens had our way we'd scrap all the fees. Under the current system, although poor people aren't necessarily burdened with the loan, the taxpayer will always lose out in the long-term (it's like a PFI for higher education); rich people who pay their fees out of their own pocket get to avoid the inflation-tied interest and hence opt out of the graduate-tax-like system anyway, which is regressive; and as the Tories keep selling off the loan books there's no telling what conditions the former students will have imposed on them in the future. Best way to fund it, like pretty much all public services, is make it free at the point of use for all and raise progressive taxes on the rich.

>>5502
What's the green view on pensions?

>>5503
Not a clue. I don't know anything about pensions myself to be honest. I know I should find out, plan for the future and all that.

University should be more expensive and difficult to get into, and the repayments more harsh. Yesterday at University, two students were bragging about getting low 50s in their essays because they'd done it all in the last day and barely read anything. A lot of the people in that class are the same. They just don't care, and I think it's because they're not really paying for it. Taxpayers are paying for it. People measure how they should treat things by how much they paid for it. Those students would be more upset about dropping their phone than failing their essays.

>>5505
I know what you mean, the other day I was on the bus, and I heard these little kids moaning about how much homework they had to do. Well it's my taxes paying for them to do that fucking homework, if they don't care and aren't really paying for it then they shouldn't get taught for free.

>>5505

University should be free, it should be highly selective, and that selection should be based on criteria that are hard to fake, like IQ or the American SAT. Making university more expensive will just worsen inequality and reinforce the class hierarchy, as will increasing selectivity based on criteria like A level grades that are highly influenced by the quality of your school.

Also, build more grammar schools. Nothing else did nearly as much for improving social mobility.

>>5505

Making higher education more expensive can only possibly exacerbate wealth inequality, and more importantly excludes the gifted from developing their talents for no food reason whatsoever.

http://britfa.gs/pol/

>>5502
Thanks for reminding me that the Greens don't know what inflation is.

>>5510
If only we had a board we could use for engaging in political discussion.

>>5510
No no, like all Greens I was just hiding a nugget of bullshit in my house of cards. As soon as someone spots it the whole thing, like our manifesto, falls apart under scrutiny.

Are we trying to become like America? Why can't we have free, or maybe just really cheap tuition fees?

http://britfa.gs/pol/

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>>5514
Politics and economics are the same thing.

>>5508

No it doesn't, because the expense comes in the forms of loans which need regular repayments of £30 a month from the go.

>>5506

The difference between university students and little kids is that the university students chose to go to university and applied for the money for their university education. If they don't care about their course and just wash out, that money has been wasted.

http://britfa.gs/pol/

>>5513

More like America? Yes. Higher education these days is based on those that can afford it, simple as. Not based on ability, but affordability. Cuba has one of the best educational systems in the world.

>>5518
If you're going to discuss other countries do it in /zoo/ OK ladm8?

>>5519
If you are going to complain, go to /101/, okay m8?

So, what about them pensions, eh then, lads?

>>5521

Pensions are shit. Run by robber barons who spend your money jizzing on coke whores. Fact.

>>5520
Will this do? >>/101/18262

WHAT?
WHAT

ARSE
FECKIN PRIESTS

>>5523
How can you discuss our economy without discussing government policy?

>>5525
If the early posts in this thread are anything to go by, pretty fucking easily as it turns out.