Private pension plans

[ronimor]

Abouit thirty years ago I took out a private pension (with London Life). In 1992 they said it woyuld be worth £120k when I retired in 1996.  When I came to claim in 1997 it as worth £94k (loss £26k)
I took £20 k tax free lump sum and put the £74 balance into Scottissh Mutual Pension Plan, with am income drawdown of 5% pa.  Over eight & a half years the fund capital value decreased to under £50k.
I am very disillusioned about pension funds and the law which dictates that our savings must be handled by 'financual experts' and 'institutuions' which no longer dserve that cachet - they are red braced sharks endorsed by government to live hansomely off our savings.
We need a new review of the whiole pension business, driven by us - the customers whose savings are involved - not financial experts who have the ear of Government.
Anyone feel the same about this?  How about a campaign to put this right?  There are 11m of us, we can make a difference if we organise....
ron.morrison@helensburgh.co.uk.

[www.annuityarrow.com]

I am sorry that you had a bad experience. However, if you have any kind of investment, you must have known that returns and ultimate fund values cannot be certain. The value given to you in 1992 would have been a projection based on assumptions. For example, the recent plummet of the stock market has wiped off 50% of the value of some of out clients funds. That is why it is prudent to monitor performance regularly and switch investments out of equities and into more secure investments such as gilts or cash when retirement is imminent, so as to avoid sudden fluctuations.

There are indeed some sharks about but the way the industry has changed and become a lot more controlled and regulated has provided a lot more protection to consumers.

There are also some good guys around who like to provide a good service and are not chasing the biggest payout. Advice can also be provided on a fixed fee basis so the client knows the decision is not influenced by commission.

Seeking and receiving independent financial advice is still a very good idea when retiring and can help you to get a lot more income than by buying an annuity with you default provider. Our advisors always fully evaluate clients’ circumstances, attitude to risk and objectives, making suitable recommendations. As a testament to our service, most of our business is from referrals and repeat business.

I have spent a lot of my own time and expense studying hard and keeping abreast of pension and financial matters. This is to provide a better service. There are financial and pension experts around to help.

www.annuityarrow.com

[cassy]

Dear Ron
We are constantly reminded to take care of our futures.  But when we take out these pensions AND if they survive we are then taxed.  Surely we can do something about this?  I am presently being taxed down and down into hand to mouth existance.  Why?  I have paid tax once.
Can we not march?  Let them earn our 'grey vote'.  Is there a pensioners' lobby?  Can you direct me to a site?
Cassy

[ElliotClark]

If you ask me, it depends where you live. If you live in a developing country with politically and economically stable environment and large GDP growth rates, then it does not make sense to invest in pension scheme that seems to me quite risky and can not provide you with appropriate return. Some solve this problem by investing in offshore banking centers that provide pension financing.  If I am not mistaken Bahamas provide quite flexible pension scheme, but the problem is the same as in onshore pension schemes: your return on investment is not appropriate. In both cases you keep funds so that they earn you negative economic profit meaning that you can find better places to invest elsewhere.
 
Obviously you have a question: ok, I believe you, but where is a better place to invest. I would answer you to invest in real estate. First of all price of real estate increases with GDP and second you can rent out real estate and earn income on that.
 
Now you may have another question: but I was planning to put away tiny amounts every month and I can not afford buying land or a building. The answer is mortgage: get a mortgage and you can even cover month repayments by the rent.