Passive Income

[CaptCaveMan]

1 hour ago, Bigmarc said:

Nope, just do the minimum I have to do at work just so the missus gets the insurance money if I cark it.

That's exactly my thinking, she also gets a good chunk of the pension if I pop my clogs... my missus that is, not yours 😂

[Stu]

There are some terrible company pensions out there with fees that are nothing short of theft.

Trouble is, most folk don’t want to do any research to find out what works, myself included until recently. I have An ok work pension as local  authority. I go the private route also now. The likes of Vanguard and AjBell have very competitive fees. 

[Coverte]

2 hours ago, Stu said:

There are some terrible company pensions out there with fees that are nothing short of theft.

Trouble is, most folk don’t want to do any research to find out what works, myself included until recently. I have An ok work pension as local  authority. I go the private route also now. The likes of Vanguard and AjBell have very competitive fees. 

Pensions are more flexible now, there's nothing to stop you moving money into a SIPP - keep the money grabbing out of % money grabbing funds and self invest and manage your own pension/s.

[lubi29]

5 hours ago, Dan12345 said:

My dad payed into a private pension for years and now he's older hes only allowed so much a month which is sod all. He will have to live till he's 120 to get all his money back and also if he passed away at any time they keep what ever money is left. 

Would have been better off putting all the money under his bed 

Apparently there is catch if he did not accept their offer  and you support him until he pass you will get all money from his pension . Otherwise  if he accept IT and pass after 7 years , family get £0 all money stay with pension provider. This is policy across Europe and not so mamy people know about it. They think their private pension will go to their family.

 

[HillWalkerDundee]

6 hours ago, Bigmarc said:

@Stu

The average person doesn't understand them for a start. Had a update on my pension the other day, I have absolutely no idea what is going on. The chaps at work are putting 10% in and when I ask what they are coming out with, they have absolutely no idea.

The big financial aspects in life are usually wages, house and pension. You take responsibility for your work, you take responsibility for your house, you should take responsibility for your pension. If you dont understand your pension then learn. It is too large a sum not to. The OP also mentioned a SIPP. As a self invested vehicle there is no one other than yourself to make invest ment decisions i.e. No scam.

[Bigmarc]

9 hours ago, HillWalkerDundee said:

The big financial aspects in life are usually wages, house and pension. You take responsibility for your work, you take responsibility for your house, you should take responsibility for your pension. If you dont understand your pension then learn. It is too large a sum not to. The OP also mentioned a SIPP. As a self invested vehicle there is no one other than yourself to make invest ment decisions i.e. No scam.

Ok hillwalker, you are on. I am average wage, average educated, I have a mortgage, I have three pensions from previous employers that I need to deal with. I will make it my mission to learn, to understand what is happening and I will create a thread on here letting others know how I get on. I have no alternative to the one I am on because my company doubles what I put in (haven't seen any evidence of this tho) so not sure what I can compare against. I am not hopeful of the outcome as no one I know from a company of 6000 people has done this. All I know is if the government automatically enrolles every working person it to it , it's not going to be a good deal is it?

[KevinFlynn]

My government takes a huge amount every month, which is then given to others. At the time when I will be on the receiving end, I will be getting a mere pittance 😪

I cannot bring myself to save into additional pension schemes that are then locked till retirement. So I am saving and investing into assets under my own control. The most likely best scenario will be to work until I die...

[Stuntman]

33 minutes ago, Bigmarc said:

Ok hillwalker, you are on. I am average wage, average educated, I have a mortgage, I have three pensions from previous employers that I need to deal with. I will make it my mission to learn, to understand what is happening and I will create a thread on here letting others know how I get on. I have no alternative to the one I am on because my company doubles what I put in (haven't seen any evidence of this tho) so not sure what I can compare against. I am not hopeful of the outcome as no one I know from a company of 6000 people has done this. All I know is if the government automatically enrolles every working person it to it , it's not going to be a good deal is it?

Good to see that you are up for the challenge of taking ownership 🙂

In my opinion (and I have no affiliation to any pensions company) if you are a UK taxpayer, putting money into a pension is a very good idea.  Especially if you are a higher rate taxpayer and even more especially if you are 45 or over.

For your 3 work schemes, assuming that they are defined contribution schemes (that is, they aren't linked to your final salary on leaving those jobs, or your average salary while you worked there) - you can request a transfer of funds into a SIPP. 

 

So the first thing to do is to set up a SIPP, using a reputable provider.  Someone above suggested Vanguard or AJ Bell, these are good choices.  I use Hargreaves Lansdown.  You can either start by investing a lump sum, or by setting up a regular monthly savings direct deblt.  Once you've set your SIPP up, you can  tell your SIPP provider about these 3 work schemes and they will do the paperwork to transfer your money into the SIPP.  This will probably take a month or so, but then you can invest the money in your SIPP however you choose.  So if you wanted, you could put it all into Silver, Gold or Platinum ETFs for example, or invest in various stock markets.  Or just leave it in cash.

I've been investing in a SIPP since 2008 and have transferred 7 separate company pension pots into it over the years.  All this money is now under my control from an investment perspective so all gains/losses are down to the quality of my own decisions.  I'm comfortable with this, but it isn't for everybody.

[Stuntman]

On auto enrolment: it's definitely better than nothing, so my advice would very much be 'take it'.  The only exception is if you are a contractor employed by an umbrella company, when it's no better than investing that money yourself directly in a SIPP (because your daily rate actually funds the employer element of auto enrolment).  

But if you are an employee of a 'normal' company, then it's free money.

I am currently working for a company that only offers the minimum auto enrolment and I'm definitely in.  Effectively it's about £1250 of free money on my salary.  Downside is of course that you can't access it until reaching the age of 55 (which becomes 57 from 2028).  But it's still free money.

[Bigmarc]

17 minutes ago, KevinFlynn said:

My government takes a huge amount every month, which is then given to others. At the time when I will be on the receiving end, I will be getting a mere pittance 😪

I cannot bring myself to save into additional pension schemes that are then locked till retirement. So I am saving and investing into assets under my own control. The most likely best scenario will be to work until I die...

I think there are loads of other options out there now that technology has moved forward. It's like my in-laws keep buying the kids bonds, seems a little old fashioned. Years ago I use to have to go into the bank to buy shares, now it's done at a touch of a button because things have moved forward, regardless I will have a look at it. I wonder if there is a app where you can constantly keep a eye on your money? Probably not.

As far as Germany are concerned, I thought as a country you were the way forward regarding finances. I do like your health system.

[HillWalkerDundee]

@Bigmarc @KevinFlynn

Kevin, you are right to be concerned about your future financial position post retirement. I am a baby boomer, I don't apologise for that, but I am in a ridiculous position where I am post retirement, no debt, no rent / mortgage, am still working (because I want to), get a state pension which isn't that far off what I earn and I don't have to pay any National Insurance. I pay a lot of tax but no N.I. Ridiculous.

I am in the works pension fund. They match my 7.5% along with the Government's 20% top up (pre tax deduction). 

ON top of that, I have a SIPP (my investment + 25% Government top up), an ISA and my PMs.

I do not intend to use any of them if I can avoid it, they are my inheritance.

Learn about stocks, funds and trusts. Do not trust grown ups. Every single person who writes about investments has an agenda and are not to be trusted.

Get your house secure and make sure it isn't taken away by the State if you need to go into a care home.

HOpe that helps.

 

[HillWalkerDundee]

One other point. Don't put all your eggs in one basket so ignore firms like Pension Bee. The financial world is a fragile place, we have seen over the years that nothing is safe. Vanguard is a good home for money but so was Lehman Brothers. What is good now may not be good in future.

Invest in a couple of funds, also self invest in shares and PMs, it helps to focus your mind on finances. The Big Short showed that nothing is what it seems.

[HillWalkerDundee]

8 hours ago, Bigmarc said:

I have no alternative to the one I am on because my company doubles what I put in (haven't seen any evidence of this tho) so not sure what I can compare against. I am not hopeful of the outcome as no one I know from a company of 6000 people has done this. All I know is if the government automatically enrolles every working person it to it , it's not going to be a good deal is it?

As has been pointed out earlier, the employer's contribution is effectively free. Also, the deduction from your wages is before tax so the gross amount goes into the pension pot.

Most auto enrollments go to the organisation that the Government set up, NEST. https://www.nestpensions.org.uk/schemeweb/nest/ten-years-of-nest.html

They aren't the most exciting of pension providers but they are safe, you can log on at any time and you can choose whether to have your money invested safely, medium risk or higher risk. 

[Coverte]

8 hours ago, HillWalkerDundee said:

@Bigmarc @KevinFlynn

Kevin, you are right to be concerned about your future financial position post retirement. I am a baby boomer, I don't apologise for that, but I am in a ridiculous position where I am post retirement, no debt, no rent / mortgage, am still working (because I want to), get a state pension which isn't that far off what I earn and I don't have to pay any National Insurance. I pay a lot of tax but no N.I. Ridiculous.

I am in the works pension fund. They match my 7.5% along with the Government's 20% top up (pre tax deduction). 

ON top of that, I have a SIPP (my investment + 25% Government top up), an ISA and my PMs.

I do not intend to use any of them if I can avoid it, they are my inheritance.

Learn about stocks, funds and trusts. Do not trust grown ups. Every single person who writes about investments has an agenda and are not to be trusted.

Get your house secure and make sure it isn't taken away by the State if you need to go into a care home.

HOpe that helps.

 

 

 

Do you spread your investments and pensions across different platforms so they are all covered by the FCA £85k limit of guarantee should they fail ?

[HillWalkerDundee]

35 minutes ago, Coverte said:

 

Do you spread your investments and pensions across different platforms so they are all covered by the FCA £85k limit of guarantee should they fail ?

That is part of it but i am not too worried about the pension provider failing completely, it is more a case of performance. 

Not a direct comparison but the Woodford  funds were the darlings of the market of the market and then sentiment changed and the funds collapsed. Anything up to 75% of the fund value disappeared. By having multiple funds the performance is spread. The fluctuations even out.

[KevinFlynn]

9 hours ago, Bigmarc said:

...

As far as Germany are concerned, I thought as a country you were the way forward regarding finances. I do like your health system.

I'm pretty sure they will not let me starve, but...

The traditional pension model is at it's end - taking in money and giving it out, with added tax money to pay government pension. Changed demographics do not make it feasible in the future. I understand that. So they said (it was around 2005) the traditional plan would be cut down to a minimum over the next decades and people had to supplement their pension payments. Okay. But they are still taking an obscene sum of everyone's pre tax income to feed the traditional model. Sum total it is more than I would get with a minimum pension. If I could keep at least half of that and divert it into sensible pension investment I would be happy. Then they invented some additional pension investment tools that make the banks and insurance companies happier than the investor. On top of that pension suddenly got taxed. And I'm pretty sure when I will reach pension age, they will have added the rule that any income from pension investment will be calculated against the minimum government pension.

Better to live now...

[SilverStorm]

Save up and go for 1 oz