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Pensions- What is the point?

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    They're pointless, I'll give you some reasons:

    - There is no guarantee that you will live to see them, money is tied up and there is no way of ensuring you will live to see it. So it is a bit of a gamble no matter the likeliness.

    - There are much more profitable investment vehicles such as property/business/stocks or even just plain savings. A mixture of different investments is likely to yield much better returns, only 1 in 10 of the British private sector workforce will save over 50 grand anyway in pension schemes which is pathetic and pointless.

    - The economy is made up for families, not individuals. Because of this, when a person reaches an older age they can be taken care of financially by their children or siblings. The state need not hand out to the elderly if only families were doing their job properly. The anxiety that people have about old age is due to the British culture of not giving a damn about their parents.
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    Basically its all about point 1 you made, you're unlikely to do point two as its 'a long way away' until its too late.

    Point two is rubiish anyway, you can put property or shares in a pension, they aren't mutually exclusive.

    50 grand is better than nothing and that average will be heavily skewed by people who have saved nothing.

    How are savings more profitable?

    So you're in a position to financially support your parents? Good on you, but at 17 I wouldn't have been able to support mine. Even at 27 I'd struggle and they'd have a rubbish quality of life (since they get more pension than I do pay).
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    Whether you will or you won't live to see them you need an income when you are old and unable to work. You need to plan for retirement.

    More profitable investments have higher risks, people cannot risk living out their old age waiting for death because they're too crippled to work but haven't the money to live. Not to mention most employers contribute in a pension scheme.
    Also that 1 in 10 public sector workers thing is horse ****, probably from the daily mail. Not to mention if they did that'd still buy a healthy annuity on top of state pension.

    The economy is not made for families, what utter bull****. There are tonnes of people living alone and a lot of older people with children unable to support an extra adult, or no children at all. The state funds these people who have paid their dues for 30+ years because they aren't some crippled old burden on their families they're people too, people who worked hard their entire life to have a nice retirement as independant adults, not to rely on their children.
    Familys are there to give support, not money, I won't take any charity from family and I'm sure many people are the same.

    Pensions are there to support hardworking citzens.
    Not so jumped up ****ers like yourself can come in and piss all over it like old people are some kind of burden on society? You need locking up you sicko.
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    The main issue which you seemed to neglect for the most part is by the time anybody on this forum reaches the age where they can claim their pension the whole system will have collapsed by then. State pensions won't exist and private pensions will either be a scam or they would have collapsed.
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    (Original post by artery08)
    - The economy is made up for families, not individuals. Because of this, when a person reaches an older age they can be taken care of financially by their children or siblings. The state need not hand out to the elderly if only families were doing their job properly. The anxiety that people have about old age is due to the British culture of not giving a damn about their parents.
    What happens to an only child whose parents have died, then?

    Pensions aren't just for older people - they're also for those who retire due to ill health.
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    (Original post by The Phelps)
    The main issue which you seemed to neglect for the most part is by the time anybody on this forum reaches the age where they can claim their pension the whole system will have collapsed by then. State pensions won't exist and private pensions will either be a scam or they would have collapsed.
    Which is what people have said for the last 60 years.
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    (Original post by Quady)
    Which is what people have said for the last 60 years.
    60 years ago we thought it would be unsustainable. Today we know it's unsustainable and more importantly than that we know it's a to bigger problem to solve.
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    (Original post by The Phelps)
    60 years ago we thought it would be unsustainable. Today we know it's unsustainable and more importantly than that we know it's a to bigger problem to solve.
    Who has said its unsustainable?`
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    http://www.publicservice.co.uk/featu...y.asp?id=18198

    http://www.bbc.co.uk/news/10545280

    http://www.telegraph.co.uk/finance/p...-says-CBI.html

    I think three links is enough to prove my point. No-one pays into a pension what they take out unless it's a private pension in which case you never get value for money.
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    (Original post by The Phelps)
    http://www.publicservice.co.uk/featu...y.asp?id=18198

    http://www.bbc.co.uk/news/10545280

    http://www.telegraph.co.uk/finance/p...-says-CBI.html

    I think three links is enough to prove my point. No-one pays into a pension what they take out unless it's a private pension in which case you never get value for money.
    In reverse order...

    1) The day the CBI call for a rise in interest rates is the day I start beliving they aren't self centred :P otherwise I might as well just give you another partisan 'source' which says they are sustainable:

    http://www.tuc.org.uk/extras/publicsectorpensions.pdf

    Also Thats predicated on there being no reform (its from April '10, ie pre election)

    2) Theres a bit of a difference between the pensions offered by some EU states and the UK

    3) Thats predicated on there being no reform, which there has now been.

    I was more looking for someone saying the Hutton Reforms aren't sustainable and why personal pensions aren't either.
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    (Original post by Quady)
    In reverse order...
    Touche sir,

    However even with the reforms I fail to believe pensions are sustainable. Even if the numbers add up which I'm confident they don't. It's all based on predictions of fiscal policy and how the markets perform. Hardly a sound investment considering its literally the nations future.
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    I must admit I'm quite uneasy about resting my financial future on the shoulders of a pension company, and since the tax benefits of a pension are no better than with an ISA, I would rather stick with an ISA. This allows me to have full control over my investment, while also avoiding having to pay a pension company a big chunk of my pot for what could very wel be poor management.

    But of course then you miss out on employer contributions which in my case is matched up until 6%. So it's probably actually worth risking letting a pension company loose with your money when you've already made a 100% gain. They have plenty of room to perform poorly and you're still coming out with a decent profit.

    Ideally I could force my employer into making the same contributions into a Self-Invested Personal Pension (SIPP). That would be the best of both worlds.

    I also think it's foolish to assume the state pension will be worth anything by the time our generation gets to that age. Our fathers and grandfathers generations have monumentally screwed us over economically, so don't rely on getting anything.
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    (Original post by ruperts)
    I must admit I'm quite uneasy about resting my financial future on the shoulders of a pension company, and since the tax benefits of a pension are no better than with an ISA, I would rather stick with an ISA. This allows me to have full control over my investment, while also avoiding having to pay a pension company a big chunk of my pot for what could very wel be poor management.

    But of course then you miss out on employer contributions which in my case is matched up until 6%. So it's probably actually worth risking letting a pension company loose with your money when you've already made a 100% gain. They have plenty of room to perform poorly and you're still coming out with a decent profit.

    Ideally I could force my employer into making the same contributions into a Self-Invested Personal Pension (SIPP). That would be the best of both worlds.

    I also think it's foolish to assume the state pension will be worth anything by the time our generation gets to that age. Our fathers and grandfathers generations have monumentally screwed us over economically, so don't rely on getting anything.
    The tax benefits are different from an ISA, basic 20% relief (uplift) on personal pension contribution (£80 in becomes £100 invested) If a higher rate taxpayer further £20 offset against tax so the £100 in the scheme costs £60. Within the scheme both receive dividends post tax credit, both escape capital gains (ISA needs to run for tax year). On taking out ISA has no tax exit charge, personal pension allows (currently-wait for budget??) 25% of fund to be taken tax free and residual either buys annuity, goes into drawdown or if you hold substantial other pensions can be drawn in entirety, all these roures subject to tax of course.

    I agree with the limited value of pensions versus ISA's if only 20% tax relief received, however the componding growth of an effective 40% free carry if the contributor is a higher rate taxpayer when making contributions but will likely be a 20% taxpayer in retirement probably makes up for the lost flexibility versus ISA's.
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    (Original post by The Phelps)
    Touche sir,

    However even with the reforms I fail to believe pensions are sustainable. Even if the numbers add up which I'm confident they don't. It's all based on predictions of fiscal policy and how the markets perform. Hardly a sound investment considering its literally the nations future.
    Which is fair enough, but comes back to the original point that people didn't believe those predictions/models in the 50s, doesn't mean people with that view are any more/less right now than then.

    You can believe that, but it doesn't mean its a fact.

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Updated: March 15, 2012
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