Pensions

Stevo_666

surrey_commuter said:

Stevo_666 said:

surrey_commuter said:

kingstongraham said:

I think those who had over £1m invested in pensions in 2016 and haven't got financial advice yet are a pretty niche market.

and still making contributions 6 years later is still more niche

Sometimes it makes sense - occupational schemes such as my current one has my employer putting in twice what I do, so if I 'save' money by stopping my contributions I lose twice that.

If you opt out we get a 10% pay rise which makes the decision more interesting

Now that would be interesting but we don't get that option. I figure mine is not that bad a situation to be in.

Dorset_Boy

surrey_commuter said:

Stevo_666 said:

surrey_commuter said:

kingstongraham said:

I think those who had over £1m invested in pensions in 2016 and haven't got financial advice yet are a pretty niche market.

and still making contributions 6 years later is still more niche

Sometimes it makes sense - occupational schemes such as my current one has my employer putting in twice what I do, so if I 'save' money by stopping my contributions I lose twice that.

If you opt out we get a 10% pay rise which makes the decision more interesting

I'd question the legality of that as the employer is not allowed to try to influence the decision of an employee to remain part of an AE qualifying scheme or opt out. Suspect the Pensions Regulator would not like it.

sungod

Stevo_666 said:

SG you are right, you can still apply in certain circumstances:
https://gov.uk/guidance/pension-schemes-protect-your-lifetime-allowance#individual-protection-2016

So worth doing if you can. That said, if you are several times over the LTA then I'm surprised you're still bothering to get up and go work.

if it's fun/creative, why not? i've friends in their 70s still at it, not because they need to, they just enjoy it

still remember a restaurant opening bash a few years ago, met an old couple, he looked like private godfrey of dad's army, still ran the aerospace business he'd built from scratch, way older than us, his passion for it was wonderful

unlike the restaurant, which went titsup fairly soon, i think they chose the serving staff for haute svelteness rather than competence, this one...
https://www.harpersbazaar.com/uk/culture/going-out/news/a7384/wabi-holborn/

surrey_commuter

Dorset_Boy said:

surrey_commuter said:

Stevo_666 said:

surrey_commuter said:

kingstongraham said:

I think those who had over £1m invested in pensions in 2016 and haven't got financial advice yet are a pretty niche market.

and still making contributions 6 years later is still more niche

Sometimes it makes sense - occupational schemes such as my current one has my employer putting in twice what I do, so if I 'save' money by stopping my contributions I lose twice that.

If you opt out we get a 10% pay rise which makes the decision more interesting

I'd question the legality of that as the employer is not allowed to try to influence the decision of an employee to remain part of an AE qualifying scheme or opt out. Suspect the Pensions Regulator would not like it.

To clarify this is for people who have hit the LTA or even triggered an event to stop the clock

surrey_commuter

sungod said:

Stevo_666 said:

SG you are right, you can still apply in certain circumstances:
https://gov.uk/guidance/pension-schemes-protect-your-lifetime-allowance#individual-protection-2016

So worth doing if you can. That said, if you are several times over the LTA then I'm surprised you're still bothering to get up and go work.

if it's fun/creative, why not? i've friends in their 70s still at it, not because they need to, they just enjoy it

still remember a restaurant opening bash a few years ago, met an old couple, he looked like private godfrey of dad's army, still ran the aerospace business he'd built from scratch, way older than us, his passion for it was wonderful

unlike the restaurant, which went titsup fairly soon, i think they chose the serving staff for haute svelteness rather than competence, this one...
https://www.harpersbazaar.com/uk/culture/going-out/news/a7384/wabi-holborn/

Brian could have lectured them on need and want

Dorset_Boy

surrey_commuter said:

Dorset_Boy said:

surrey_commuter said:

Stevo_666 said:

surrey_commuter said:

kingstongraham said:

I think those who had over £1m invested in pensions in 2016 and haven't got financial advice yet are a pretty niche market.

and still making contributions 6 years later is still more niche

Sometimes it makes sense - occupational schemes such as my current one has my employer putting in twice what I do, so if I 'save' money by stopping my contributions I lose twice that.

If you opt out we get a 10% pay rise which makes the decision more interesting

I'd question the legality of that as the employer is not allowed to try to influence the decision of an employee to remain part of an AE qualifying scheme or opt out. Suspect the Pensions Regulator would not like it.

To clarify this is for people who have hit the LTA or even triggered an event to stop the clock

OK. I misunderstood.

Stevo_666

sungod said:

Stevo_666 said:

SG you are right, you can still apply in certain circumstances:
https://gov.uk/guidance/pension-schemes-protect-your-lifetime-allowance#individual-protection-2016

So worth doing if you can. That said, if you are several times over the LTA then I'm surprised you're still bothering to get up and go work.

if it's fun/creative, why not? i've friends in their 70s still at it, not because they need to, they just enjoy it

still remember a restaurant opening bash a few years ago, met an old couple, he looked like private godfrey of dad's army, still ran the aerospace business he'd built from scratch, way older than us, his passion for it was wonderful

unlike the restaurant, which went titsup fairly soon, i think they chose the serving staff for haute svelteness rather than competence, this one...
https://www.harpersbazaar.com/uk/culture/going-out/news/a7384/wabi-holborn/

Fair play, I get that and tbh I have no intention of retiring any time soon for those sorts of reasons (tried a year or so out a decade back and went back before I had to).

surrey_commuter

Stevo_666 said:

sungod said:

Stevo_666 said:

SG you are right, you can still apply in certain circumstances:
https://gov.uk/guidance/pension-schemes-protect-your-lifetime-allowance#individual-protection-2016

So worth doing if you can. That said, if you are several times over the LTA then I'm surprised you're still bothering to get up and go work.

if it's fun/creative, why not? i've friends in their 70s still at it, not because they need to, they just enjoy it

still remember a restaurant opening bash a few years ago, met an old couple, he looked like private godfrey of dad's army, still ran the aerospace business he'd built from scratch, way older than us, his passion for it was wonderful

unlike the restaurant, which went titsup fairly soon, i think they chose the serving staff for haute svelteness rather than competence, this one...
https://www.harpersbazaar.com/uk/culture/going-out/news/a7384/wabi-holborn/

Fair play, I get that and tbh I have no intention of retiring any time soon for those sorts of reasons (tried a year or so out a decade back and went back before I had to).

Fvck that if I won 2 million quid tomorrow I would be off.

rjsterry

To be so cheaply bought.

pblakeney

rjsterry said:

To be so cheaply bought.

I'm much cheaper than that! 🤣

surrey_commuter

pblakeney said:

rjsterry said:

To be so cheaply bought.

I'm much cheaper than that! 🤣

I doubled it so I didn’t appear cheap

davidof

Pross said:

Suggestions welcome!

Sell it all. Today!

briantrumpet

I suspect that the small PPP into which I've been paying about £70 a month for the last 30 years is going to be worth about £70 by the time this is all over. Fortunately I hope it won't be the only thing left once the dust has settled, otherwise I might be working for somewhat longer than I'm planning...

pblakeney

briantrumpet said:

...otherwise I might be working for somewhat longer than I'm planning...

I've already resigned myself to an additional year.
At least...

wallace_and_gromit

briantrumpet said:

I suspect that the small PPP into which I've been paying about £70 a month for the last 30 years is going to be worth about £70 by the time this is all over. Fortunately I hope it won't be the only thing left once the dust has settled, otherwise I might be working for somewhat longer than I'm planning...

I’m no expert on pensions but I think the current turmoil relates specifically to defined benefit schemes, where there are specific liabilities. The current issues arise from managers trying to match these liabilities with derivatives, to keep cash spare to invest in higher yielding assets to generate higher returns overall.

Your PPP is most likely a defined contribution scheme where there are no specific liabilities and so your fund can’t go insolvent. Its value will fluctuate depending on the value of the underlying assets, but these are likely to be equities and bonds, which are less volatile than the derivatives held by defined benefit schemes.

briantrumpet

wallace_and_gromit said:

briantrumpet said:

I suspect that the small PPP into which I've been paying about £70 a month for the last 30 years is going to be worth about £70 by the time this is all over. Fortunately I hope it won't be the only thing left once the dust has settled, otherwise I might be working for somewhat longer than I'm planning...

I’m no expert on pensions but I think the current turmoil relates specifically to defined benefit schemes, where there are specific liabilities. The current issues arise from managers trying to match these liabilities with derivatives, to keep cash spare to invest in higher yielding assets to generate higher returns overall.

Your PPP is most likely a defined contribution scheme where there are no specific liabilities and so your fund can’t go insolvent. Its value will fluctuate depending on the value of the underlying assets, but these are likely to be equities and bonds, which are less volatile than the derivatives held by defined benefit schemes.

I think you're probably right, from my very limited understanding, but it's obviously disappointing to see the fund shrink from one year to the next despite still making contributions. It's just that in the current climate one wonders if the financial systems are more a house of cards.

pblakeney

briantrumpet said:

.... It's just that in the current climate one wonders if the financial systems are more a house of cards.

I was saying that prior to 2008. People said I was stupid. I maintain that the whole financial industry is a house of cards built on sand. Doesn't take much to knock it over.

surrey_commuter

pblakeney said:

briantrumpet said:

.... It's just that in the current climate one wonders if the financial systems are more a house of cards.

I was saying that prior to 2008. People said I was stupid. I maintain that the whole financial industry is a house of cards built on sand. Doesn't take much to knock it over.

I would suggest that you do not understand what the whole financial system encompasses

wallace_and_gromit

briantrumpet said:

wallace_and_gromit said:

briantrumpet said:

I suspect that the small PPP into which I've been paying about £70 a month for the last 30 years is going to be worth about £70 by the time this is all over. Fortunately I hope it won't be the only thing left once the dust has settled, otherwise I might be working for somewhat longer than I'm planning...

I’m no expert on pensions but I think the current turmoil relates specifically to defined benefit schemes, where there are specific liabilities. The current issues arise from managers trying to match these liabilities with derivatives, to keep cash spare to invest in higher yielding assets to generate higher returns overall.

Your PPP is most likely a defined contribution scheme where there are no specific liabilities and so your fund can’t go insolvent. Its value will fluctuate depending on the value of the underlying assets, but these are likely to be equities and bonds, which are less volatile than the derivatives held by defined benefit schemes.

I think you're probably right, from my very limited understanding, but it's obviously disappointing to see the fund shrink from one year to the next despite still making contributions.

The flip side of this is that the associated interest rate rises make annuity rates much more attractive than they have been throughout the low interest rate era.

wallace_and_gromit

surrey_commuter said:

pblakeney said:

briantrumpet said:

.... It's just that in the current climate one wonders if the financial systems are more a house of cards.

I was saying that prior to 2008. People said I was stupid. I maintain that the whole financial industry is a house of cards built on sand. Doesn't take much to knock it over.

I would suggest that you do not understand what the whole financial system encompasses

It is concerning that the investment strategy of a few UK pension funds can apparently get the US Federal Reserve nervous about "contagion".

pblakeney

surrey_commuter said:

pblakeney said:

briantrumpet said:

.... It's just that in the current climate one wonders if the financial systems are more a house of cards.

I was saying that prior to 2008. People said I was stupid. I maintain that the whole financial industry is a house of cards built on sand. Doesn't take much to knock it over.

I would suggest that you do not understand what the whole financial system encompasses

I seem to know enough to know that it is unstable.
I may not know the mechanisms behind that but the evidence is front page news.

surrey_commuter

wallace_and_gromit said:

surrey_commuter said:

pblakeney said:

briantrumpet said:

.... It's just that in the current climate one wonders if the financial systems are more a house of cards.

I was saying that prior to 2008. People said I was stupid. I maintain that the whole financial industry is a house of cards built on sand. Doesn't take much to knock it over.

I would suggest that you do not understand what the whole financial system encompasses

It is concerning that the investment strategy of a few UK pension funds can apparently get the US Federal Reserve nervous about "contagion".

My slightly informed guess is that it is more like virtually every pension fund and that group think of their advisors is causing them to act like a herd.

wallace_and_gromit

surrey_commuter said:

wallace_and_gromit said:

surrey_commuter said:

pblakeney said:

briantrumpet said:

.... It's just that in the current climate one wonders if the financial systems are more a house of cards.

I was saying that prior to 2008. People said I was stupid. I maintain that the whole financial industry is a house of cards built on sand. Doesn't take much to knock it over.

I would suggest that you do not understand what the whole financial system encompasses

It is concerning that the investment strategy of a few UK pension funds can apparently get the US Federal Reserve nervous about "contagion".

My slightly informed guess is that it is more like virtually every pension fund and that group think of their advisors is causing them to act like a herd.

Fair point. But it's still noteworthy that the Fed (and the ECB) are worried.

Munsford0

The closer you get to retirement age the scarier it all seems. I'm now 65, in receipt of a couple of DB pensions but also still working, OH is 63 and doing only occasional paid work. I have another 2 DC pensions and OH has one; we've not done anything with these yet. I'm fully paid up for State Pension, OH is nearly so.
We had an IFA do some retirement planning 3 years ago when I was made redundant, and his then cash flow projections made it look like we'd be comfortably well off in retirement.

Since then we've been watching successive pension statements showing funds either not growing, or actively shrinking. We should probably have another session with an IFA, see if they say the same things as the last one. Instinct tells me that this would be the worst time to be making important decisions about retirement / pensions

briantrumpet

wallace_and_gromit said:

briantrumpet said:

wallace_and_gromit said:

briantrumpet said:

I suspect that the small PPP into which I've been paying about £70 a month for the last 30 years is going to be worth about £70 by the time this is all over. Fortunately I hope it won't be the only thing left once the dust has settled, otherwise I might be working for somewhat longer than I'm planning...

I’m no expert on pensions but I think the current turmoil relates specifically to defined benefit schemes, where there are specific liabilities. The current issues arise from managers trying to match these liabilities with derivatives, to keep cash spare to invest in higher yielding assets to generate higher returns overall.

Your PPP is most likely a defined contribution scheme where there are no specific liabilities and so your fund can’t go insolvent. Its value will fluctuate depending on the value of the underlying assets, but these are likely to be equities and bonds, which are less volatile than the derivatives held by defined benefit schemes.

I think you're probably right, from my very limited understanding, but it's obviously disappointing to see the fund shrink from one year to the next despite still making contributions.

The flip side of this is that the associated interest rate rises make annuity rates much more attractive than they have been throughout the low interest rate era.

Yeah, I've got funds elsewhere, and though the pot has decreased by about 7% in 6 months, the projected income has increased. Quite glad I set the risk to low though.

surrey_commuter

Munsford0 said:

The closer you get to retirement age the scarier it all seems. I'm now 65, in receipt of a couple of DB pensions but also still working, OH is 63 and doing only occasional paid work. I have another 2 DC pensions and OH has one; we've not done anything with these yet. I'm fully paid up for State Pension, OH is nearly so.
We had an IFA do some retirement planning 3 years ago when I was made redundant, and his then cash flow projections made it look like we'd be comfortably well off in retirement.

Since then we've been watching successive pension statements showing funds either not growing, or actively shrinking. We should probably have another session with an IFA, see if they say the same things as the last one. Instinct tells me that this would be the worst time to be making important decisions about retirement / pensions

The timing depends what you are going to do with the DC pots. You will soon be getting a £10k pay rise when the state pension kicks in so that should give you the breathing space to make decisions

briantrumpet

surrey_commuter said:

Munsford0 said:

The closer you get to retirement age the scarier it all seems. I'm now 65, in receipt of a couple of DB pensions but also still working, OH is 63 and doing only occasional paid work. I have another 2 DC pensions and OH has one; we've not done anything with these yet. I'm fully paid up for State Pension, OH is nearly so.
We had an IFA do some retirement planning 3 years ago when I was made redundant, and his then cash flow projections made it look like we'd be comfortably well off in retirement.

Since then we've been watching successive pension statements showing funds either not growing, or actively shrinking. We should probably have another session with an IFA, see if they say the same things as the last one. Instinct tells me that this would be the worst time to be making important decisions about retirement / pensions

The timing depends what you are going to do with the DC pots. You will soon be getting a £10k pay rise when the state pension kicks in so that should give you the breathing space to make decisions

That's the bit I'll be making a call on... whether I can reasonably safely retire at 60 and not take too big a hit on capital before that 'pay rise' kick in. I'm a very cheap date, so that £10k goes quite a long way in % terms to my basic living costs.

davidof

Munsford0 said:

I'm now 65, in receipt of a couple of DB pensions but also still working

Don't quit the day job.

Basically the money you thought you had only exists on paper because people don't want to buy that paper. The issues are largely of the BoE's making (at the behest of successive govts from Blair onwards) with Truss being the straw that has broken the camel's back.

surrey_commuter

briantrumpet said:

surrey_commuter said:

Munsford0 said:

The closer you get to retirement age the scarier it all seems. I'm now 65, in receipt of a couple of DB pensions but also still working, OH is 63 and doing only occasional paid work. I have another 2 DC pensions and OH has one; we've not done anything with these yet. I'm fully paid up for State Pension, OH is nearly so.
We had an IFA do some retirement planning 3 years ago when I was made redundant, and his then cash flow projections made it look like we'd be comfortably well off in retirement.

Since then we've been watching successive pension statements showing funds either not growing, or actively shrinking. We should probably have another session with an IFA, see if they say the same things as the last one. Instinct tells me that this would be the worst time to be making important decisions about retirement / pensions

The timing depends what you are going to do with the DC pots. You will soon be getting a £10k pay rise when the state pension kicks in so that should give you the breathing space to make decisions

That's the bit I'll be making a call on... whether I can reasonably safely retire at 60 and not take too big a hit on capital before that 'pay rise' kick in. I'm a very cheap date, so that £10k goes quite a long way in % terms to my basic living costs.

I was doing this maths recently and was picturing it as a bar graph with the different income streams kicking in between me and the wife. I figured that up to 67 I could draw down funds at an unsustainable rate. Wife is 7 years younger than me so her "pay rise" won't kick in for 8 years after me.

Dorset_Boy

briantrumpet said:

wallace_and_gromit said:

briantrumpet said:

wallace_and_gromit said:

briantrumpet said:

I suspect that the small PPP into which I've been paying about £70 a month for the last 30 years is going to be worth about £70 by the time this is all over. Fortunately I hope it won't be the only thing left once the dust has settled, otherwise I might be working for somewhat longer than I'm planning...

I’m no expert on pensions but I think the current turmoil relates specifically to defined benefit schemes, where there are specific liabilities. The current issues arise from managers trying to match these liabilities with derivatives, to keep cash spare to invest in higher yielding assets to generate higher returns overall.

Your PPP is most likely a defined contribution scheme where there are no specific liabilities and so your fund can’t go insolvent. Its value will fluctuate depending on the value of the underlying assets, but these are likely to be equities and bonds, which are less volatile than the derivatives held by defined benefit schemes.

I think you're probably right, from my very limited understanding, but it's obviously disappointing to see the fund shrink from one year to the next despite still making contributions.

The flip side of this is that the associated interest rate rises make annuity rates much more attractive than they have been throughout the low interest rate era.

Yeah, I've got funds elsewhere, and though the pot has decreased by about 7% in 6 months, the projected income has increased. Quite glad I set the risk to low though.

Low risk will likely mean you have a realtively high exposure to fixed interest (gilts, corporate bonds). The capital value of these was always going to get hammered when there was a normalisation of interest rates.

If you have a gilt paying £1.00 pa, and rates rise so new gilts pay £4.00 pa then the capital value of your gilt will fall.

Remember your time horizon. Unless you are going to buy an annuity (no flexibility, but a secure income), then you will be invested for 20-35 years.