Guest Tracker Posted February 26, 2010 Share Posted February 26, 2010 There is no doubt that those of us who were fortunate and/or canny enough to invest wisely, have our mortgage endowments mature and take our pensions and stock market based investments before 2000 had the best deals by far and I do sympathise with those of you were not able to do the same. Quite where the next opportunities will come from I have no idea and I'm very glad that I am out of both selling and saving for a pension now. I also have very great sympathies for those caught in the pension trap through no fault of their own other than doing what they were advised was the right thing at the time. Younger savers have enough time to do something about it in the longer term but make no mistake the cost of pensions can only rise as we all live longer and investments returns remain more modest and more sustainable. Had there been better regulation of post war financial markets instead of the lure of huge taxation revenue by successive governments maybe we would not be in this mess now? At the Pru we had caution drummed into us by various actuaries and 'experts' in the 80's and 90's with the ongoing message being - 'beware - these kinds of investemnt returns are unsustainable in the longer term'. Boy were they right. Link to comment Share on other sites More sharing options...
Colin Leake Posted February 27, 2010 Share Posted February 27, 2010 Bob Elswood - 2010-02-25 9:29 PM Last time I listened to a 'financial adviser' He told me Endowment Mortgages were a much better deal ( for him !! ) And tried to tell me a 'money purchase' pension scheme was the way forwards !!! Thank goodness I never listened to him. Why should anyone listen to any financial adviser ever again!! According to a certain Mrs 'T' we all would have so much money and time on our hands that we would not know what to do with it!! Strange that when more and more people are having to work longer to make ends meet !! As others have stated, do what is right for you, but remember the tax free lump sum is the only bit of your pension that you can get at right away and it would probably take 10 - 16 years or so to break even if you just took it in annual income instead. We had an endowment morgage back in the good old days more than 40 years ago when tax relief ment they worked well. One year out of college, married with a baby and no capital we were able to borrow £5000 for a 100% morgage over twentyfive years. Twelve years later we had paid off the capital. When the endowment matured it was for £25,000 which was all ours. I can't help feeling sorry for todays youth saddled with student debts and short of help from parents or an inheritance no hope of getting on the hoousing ladder. Link to comment Share on other sites More sharing options...
Colin Leake Posted February 27, 2010 Share Posted February 27, 2010 Just a few other things that come to mind. Don't forget that when you retire your pension pot is transferable you don't have to take an endowment with the holding company so you can shop around for a better deal. Also if you have any medical condition such as diabetes which will statistically reduce your average life expectancy some companies will take this into account to give you higher payments on the grounds than on average they will not have to pay them for so long. As a diabetic myself I was able to take advantage of this. Finally you do not have to take out an endowment if you have a reasonable pot. No company is going to volunteer the information but the alternative is what is called a draw down policy where you draw an agreed monthly amount but the pot remains yours. The problem with an endowment is that if you get over excited with you new bus pass and step infront of the bus instead of on it your pension pot will be gone even before the bus has cleared your remains. With a draw down policy the pot remains in place and accessible to whoever you choose to leave it to. The only problem under present legislation is that you will have to convert the remains of the pot into an endowment at 75 though this is expected to change. In our case we converted our three smaller pots into endowments and took the main pot as a draw down pension. We were lucky in that one of our sons is a principle in a large firm of actuaries and was able to help us. I simply pass this information on in the hope it may be of help to others but I do advise taking some professional help as what was good for us may not be best for everyone. Link to comment Share on other sites More sharing options...
Guest Tracker Posted February 27, 2010 Share Posted February 27, 2010 You can get some comparitive pension annuity quotes for pension fund transfers online and firms like Hargreaves Lansdown (there are many others!) provide quite a lot of helpful info - and their service is pretty good too! However I would be very very wary about transferring out of a company final salary scheme as these schemes often have other benefits such as widow's pension and inflationary increases that are difficult and expensive to replicate. Link to comment Share on other sites More sharing options...
747 Posted February 27, 2010 Share Posted February 27, 2010 Brock, You stated that you had 4 years left before retirement but you could get an idea now of what your state pension will be. Just apply for a pension forecast and you will get a breakdown of what to expect from the State. Link to comment Share on other sites More sharing options...
BGD Posted February 28, 2010 Share Posted February 28, 2010 747 - 2010-02-27 1:38 PM Brock, You stated that you had 4 years left before retirement but you could get an idea now of what your state pension will be. Just apply for a pension forecast and you will get a breakdown of what to expect from the State. Perhaps should have read; "just apply for a pension forecast and you will get a breakdown."? Link to comment Share on other sites More sharing options...
Brock Posted February 28, 2010 Author Share Posted February 28, 2010 I'm glad I asked now. Thanks for all the comments. I hadn't realised about the taxation issues on the lump sum. I shall factor that in when the time comes. I did know that any lump sum will reduce the regular pension by one twelfth and that I need to consider the impact of my missus if I depart first - she only gets half my pension then. Maybe I'll draw a lump sum sufficient to keep my tax bill below 40%. I am hoping my employers will continue to run retirement workshops although non have been run in the last 12 months. There is little financial logic in most of us buying the motorhome we have. However, there is something nice about having a shiny motorhome. People like me will pay for 'nice' occasionally and ignore the financial logic. And it's better than a carriage clock! Link to comment Share on other sites More sharing options...
Klyne Posted February 28, 2010 Share Posted February 28, 2010 You should be able to get a State Pension forecast online by filling in form BR19(I think thats the one). My own view on taking the max lump sum is that a bird in the hand is worth two in the bush. Only you know how much you need to live on and it should be a fairly simple calculation on how much taking the lump sum will reduce your pension. Should you depart this mortal coil how will your wife be looked after. If you are in SERPs half your SERPs pension will go to your wife and likewise you need to look at the provision of your company pension in that respect. There is nother really compicated about pension except the decisions you need to make :-D David Link to comment Share on other sites More sharing options...
Lord Raindrop Posted February 28, 2010 Share Posted February 28, 2010 I would suggest not to get too carried away with the glitzy aspect of your new toy, consider the vehicle basics above appearance very well before laying out your cash. A pretty exterior may disguise a known problem. Do your homework well as in all of life's duties. Regarding any pension read the rules very well also, I had a lump sum offered with a note saying that if I chose not to take it by a certain date I would be penalised later and would loose any entitlement to it or any spoils from it. Link to comment Share on other sites More sharing options...
Colin Leake Posted March 3, 2010 Share Posted March 3, 2010 When retiring you should always save enough money for a new Harly or a Honda Gold Wing! Link to comment Share on other sites More sharing options...
creakyknee Posted March 3, 2010 Share Posted March 3, 2010 Hi John, I know very little about finance, only that my income from savings is very little. The state retirement pension just about refuels the van. I can't see things getting any better. I am now coming towards the end of my motor-homing days. If you check my post, regarding, shortage of parking, you will see that I predict the sale of motor-homes will decline. This is because of the number roaming around having difficulty looking for somewhere to park and camp. My advice, for what it's worth, would be to eventually buy a caravan. I few years on I think you will be forced on to campsites. If either of you become disabled, even slightly, it will be easier to tour around with a car. I also think it can be a cheaper option. Long journeys can be broken down into short stretches when time is not too important. I met an English couple in their late seventies on push-bikes in the South of France. I expressed surprise when they said they had cycled all the way. He informed me that if you cycle 40 miles a day, in 10 days you've covered 400miles. They looked well on it too. Not suggesting you cycle but no need to do the South of France in the day! No I wouldn't buy a new motor-home. Use the first years of your retirement doing the big journeys, the big tours with your motorhome. You will probably find then, you have found those few places where you can settle for a few months at a time. We live and learn but we don't live long enough. :-D Link to comment Share on other sites More sharing options...
Porky Posted March 3, 2010 Share Posted March 3, 2010 creakyknee - 2010-03-03 2:20 PM Hi John, I know very little about finance, only that my income from savings is very little. The state retirement pension just about refuels the van. I can't see things getting any better. I am now coming towards the end of my motor-homing days. If you check my post, regarding, shortage of parking, you will see that I predict the sale of motor-homes will decline. This is because of the number roaming around having difficulty looking for somewhere to park and camp. My advice, for what it's worth, would be to eventually buy a caravan. I few years on I think you will be forced on to campsites. If either of you become disabled, even slightly, it will be easier to tour around with a car. I also think it can be a cheaper option. Long journeys can be broken down into short stretches when time is not too important. I met an English couple in their late seventies on push-bikes in the South of France. I expressed surprise when they said they had cycled all the way. He informed me that if you cycle 40 miles a day, in 10 days you've covered 400miles. They looked well on it too. Not suggesting you cycle but no need to do the South of France in the day! No I wouldn't buy a new motor-home. Use the first years of your retirement doing the big journeys, the big tours with your motorhome. You will probably find then, you have found those few places where you can settle for a few months at a time. We live and learn but we don't live long enough. :-D The original post was quite clear. They own a motorhome, and are happy with a motorhome. They were looking for advice on finance not doom and gloom>:-) We purchased our first motorhome on retirement having previously hired for short periods. Unless the lottery or premium bonds come up, most people have to live on a fixed income on retirement and that probably means a gradual erosion of capital. So working out what is best can only be done by the individual based on their expectations and lifestyle related to the income they have. For what it is worth my calculation for working out the cost included a generous assessment for depreciation so that we could see how much less we would have each year relative to how much income we would have*-) Link to comment Share on other sites More sharing options...
creakyknee Posted March 3, 2010 Share Posted March 3, 2010 "The original post was quite clear. They own a motorhome, and are happy with a motorhome. They were looking for advice on finance not doom and gloom." Hello Roy, How nice to hear from you again. I am so pleased you think that fuel is going to get cheaper, state pensions will increase and the cost of living will go down. The average debt of each adult is now £33,000, I haven't any debt nor have my friends, although of course we are elderly so some people have much more. Pleased you are so optimistic I hope it's justified. Link to comment Share on other sites More sharing options...
Porky Posted March 4, 2010 Share Posted March 4, 2010 creakyknee - 2010-03-03 4:42 PM Hello Roy, How nice to hear from you again. I am so pleased you think that fuel is going to get cheaper, state pensions will increase and the cost of living will go down. The average debt of each adult is now £33,000, I haven't any debt nor have my friends, although of course we are elderly so some people have much more. Pleased you are so optimistic I hope it's justified. No I don't think fuel will get cheaper, yes I expect my state pension to increase slightly in line with RPI (or whatever index they choose), no I don't think the cost of living will go down, quite the reverse. Yes I choose to be opimistic, the alternative is pessimism(lol) Link to comment Share on other sites More sharing options...
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