They are not user friendly definitely. Why do we have to ‘track down’ old pensions? We should be able to log into a government website with our NI number and get a simple list and contact info for all providers we’ve been signed up to - all the info should be available easily. Being able to just ‘lose’ billions because you can’t find a bit of paper is insane.
100% Also since you can't move them to another country, when you work in several countries, you can leave small pots in pensions and 40 years later completely forget it exists
Spot on, why even have a national insurance number if it doesn’t do the job of giving your financial identity, they know exactly how much tax you owe and can imprison you if you avoid it but it’s okay for them to act clueless when you want to know where your pensions are, governments should be held to same accountability as its citizens but yeah I think that concept will only ever exist in fiction.
My grandad was one of those whose retirement was stolen by Maxwell, an event he never emotionally recovered from. I agree with all of your points Damien. I’ve build up more wealth in my 20s inside my sipp than I have equity in my home - even after the crazy years of growth in the uk housing market. A pension is not a scam, but unless you choose to get educated on how to use the system, you will lose.
SIPP, is good, on paper but it is in the control of the government, who will mess around changing the system itself. They are about as trustworthy as Bob Maxwell managing it. I’ll continue to save into the SIPP, but as a long term bet, lack of accessibility and control makes them a bit of a punt. So no matter how much you understand the system today, who knows what it will be in thirty years time.
@@CloutMasterGeneral Thanks, I’d never considered there would be such a thing as a protected age. Previously, it would see, some schemes did have this, hard to get today. My SIPP is with Vanguard who say “The Vanguard Personal Pension (SIPP) doesn't have a protected pension age. As such, you can access your Vanguard SIPP from the minimum pensionable age, this is currently age 55 as per government regulations, and we will be required to adjust this as the regulations change in the future.” So, I stand by my original beef with the SIPP. Hard to know when you can access it and on what terms as they are likely to change as the government changes the system.
It is a scam when the government keeps increasing the state pendion age which means you can't access your private pension pot 10 years prior to state pension. It annoys you that you plan to take your private pension at 55 then it goes up to 57 then 58. You kind of start to think whats to point paying in for 30 or 40 odd years!
The normal minimum pension age (NMPA) for taking benefits from a private pension was set at 50 when it was first introduced on 6 April 2006. The current NMPA is age 55, having been increased to that age on 6 April 2010. A further increase in the NMPA to 57 is due in 2028.
I used to pay into my workplace pension for about 15 years because it had always been drummed into me by everyone, including all media, that it's the best thing to do. I opted out a few years ago because I realised that it wasn't right for me, as I'd rather have the money now, than wait until I'm in my late 50s/early 60s to access any of it. I may not even live to that age. I recently transferred the amount that I had previously built up, to a SIPP. It's far more transparent than the pension I had, and I have complete control and visibility over where the money will be invested. I wish I'd done this years ago, but better late than never, I suppose.
The best bit with a pension is getting tax relief on the way in, but on the way out you can transfer your pension to a QROPS in another country which is a financial product that recognizes the UK pension rules. The only difference is you pay taxes in the host country! so emigrating right before retirement can save you a boat load of tax in the host country as you pay at the tax rate in the country you moved to and not the high level UK tax. And the best bit is HMRC gets £0 and it's perfectly legal.
Correction Damien - The personal pension age is not linked to state pension age in legislation, the only legislation currently is the raise to 57 from 55 in 2028. There was a vague suggestion by the coalition government to make it State Pension Age - 10, but that has never been written in to legislation, but unfortunately its sort of stuck and is often repeated. Not saying that any future government won't make changes, but just clarifying that the only confirmed raise is the 55 to 57 one in 2028.
I always remember in the early 90's (when I was a teen) some scumbag pension 'adviser' coming to my parents house and abruptly walking out mid way on us because my dad dared to ask him about a fund or investment company he wasnt affiliated with. The audacity and rudeness of the guy put me off pensions for life! I thought they were all scammers on massive commissions. Thank God for the internet & channels such as pensioncraft and yourself came along to help us make more informed decisions.
What people don't understand is pre/early internet these types of 'advisers' were absolutely rife!! ready to skim off a high percentage of you cash forever and gain a massive commission into the bargain.
@@DamienTalksMoney Fortunately those days are long, long gone. The ‘bar’ to being a regulated financial adviser has been raised significantly since then. The risk is in the public approaching pension-provider companies directly, speaking with a telephone-based operator and mis-believing that that conversation constitutes ‘advice’.
damien you mentioned a great point about shifting money over from your workplace pension provider over to a SIPP every so often, i’ll be maximising this as my work pension provider currently has 4x more fees than Vanguard SIPP
I’m with the fire brigade pension scheme and it’s changed 4 times since 2096 when I joined each time taking more % of my pay now 13.5% and almost halving what I get at the end, I signed a contract at the start but seems they can change that contract whenever they see fit without me needing to agree or sign anything. I just feel cheated already and still have 19years left to work.
It'll be a public sector defined benefit scheme no doubt. They don't change it, the government did. They took the pension age from 60, to 65, to whatever SPA happens to be by the time you get there. They took it from final salary to Career Average Revalued Earnings. All because they never invested any of the contributions and they're running out of workers to pay for the retirees. It's only gonna get worse with stagnating wages and public sector pay freezes.
My mates just packed in As he told me main reason he has worked the required number of years to get the maximum fire service pension But if he stayed , he would still have to pay a canny chunk of his wages into the pension scheme but wouldn’t get a extra penny on what he will already get anyway
I'm so glad I found this channel. I worry about this stuff as I find the Information hard to take it but the way you break down things in a normal blokeish way is a god send for me. Thank you so much. Your channel is about to blow up
Great video, probably the biggest scam is the fee’s associated with default funds, auto enroll has created an entire industry of high fee employer schemes.
Generally the opposite. When AE was launched in 2012, the annual management charge (AMC) was a maximum of 0.75% for default funds and remains so today. However, since then, some providers have reduced the AMCs below 0.5% to become more competitive and offer better value to members. They can also apply a fixed charge in addition to the AMC and there can be some variation, both in the AMC and Annual Charge (AC), between providers. As operating costs have increased some have increased the AC in recent years. Some providers reduce the AMC, the greater the pot value. Small pots held by a large portion of members in some AE schemes attract the same pension levy fees as larger pots. Consolidation can benefit both providers and members, enabling the provider to reduce the AMC %, the greater the value of a pot either by reducing the AMC % itself or providing a regular rebate to member pots, thus achieving the same thing. Workplace pension schemes are chosen by employers. It is important to review the fees when leaving an employer/the scheme and considering whether it would be in your interests to transfer the pot you’ve accrued to another provider, perhaps the one chosen by your new employer. In some cases it could be worth transferring, in others staying put. Investment returns should also be considered. Imagine transferring to save 0.3% in the AMC but seeing your new investment fund under performing compared to that you just left by 4% pac.
The high fees I believe are government led to repay the billions it cost to set up the auto pension schemes in the first place. You would think that given the massive amounts of cash coming into the top ten auto enrolment providers that they would not need to be part of this excessive charging.
My Aegon default fund has a 0.06% ongoing charge, plus any underlying transaction costs within the fund. I think total fund charge is about 0.15%. The overall total charge is 0.5%
I have an L&G workplace pension and am being charged 0.12% platform fee and 0.1% for the global developed equity index fund. Which I think is reasonable. Some employers subsidise the pension charges so it's worth checking on this.
The lack of control with Pensions is why I don't use it more. My stocks and shares ISA has performed much better than my work pension. I view it as more of a backup plan. Now if there was a pension where I could specify what the money is invested in that would encourage me to use it more.
But by using an ISA you’ve missed out on a load of tax relief and potentially a chunk of employer contributions. This can mean doubling your money. ISAs useful but in conjunction with a pension not standalone in my opinion
I remember in the early 80s a mate worked for Irish Life. He conned me out of £2,000. Never seen him again after that but did learn years later he is now a multimillionaire. I was so disgusted and angry I shredded my policy in the 80s and now Irish Life who come under another name cannot locate anything related to me. I hate this ex-mate who conned me and did a runner. He put me off pensions and ISAs for decades after that and basically ruined my trust in saving money anywhere.
@@markcoomber8222 not necessarily. Have you ever been cheated on by a girlfriend or scammed out of money. A guy who gets cheated on and then gets straight into another relationship is desperate. Someone who gets scammed becomes cautious.
I am a member of the Halcrow Pension fund. When Halcrow was sold to an American company, they gave members the option to lose 10% of their pension or fall into the PPS. They walked away from their commitments to benefit share holders. Members were forced to accept the change and the regulator and government allowed this to happen. You pay into a scheme for years with a promise to payout and then the rug is pulled out from under you.
In Canada our government pension (the CPP) is fully funded for at least the next 75 years. They make small adjustments, as needed, to ensure that it can continue. I think it's an important part of our social system and I'm glad we have it. That being said, it won't pay enough to rely solely on it for retirement - people should also be saving for their retirement individually.
Canada's pensions rank 12th with a "B" grade as there are issues with long term sustainability. CPP itself says its solid for 75 years - but that's stretching facts beyond acceptable limits imho as it assumes things will go according to plan with investments, longevity, population growth, income and inflation for the next decades (if it was a private fund I'd say they where lying). Regardless, 12th is not bad and sound policy changes should be able to cope with any challenges ahead.
Pains me that people so often make these kind of misguided and ill informed kind of claims. They are not helpful in fostering an informed discussion about our socioeconomic challenges or possible solutions for real problems. Median weaith in the UK is over 300.000 GBP. There is lots and lots of money around. @@MOCHI-ek6rc
Canada is a third world authoritarian state that won't be able to provide anyone with anything in the next few decades. the massive influx of migrants and refugees also hurt the economy and benefit system.
Love this! Well done for making a positive change. I bet you barely notice the lower pay within a few months also and the impact it will have will be massive
I was one of those people for many years. Much of that came from a lack of understanding and education on investing and importantly,the value of compound interest. Schools should provide better financial education. This is not financial advice. But providing young minds with the tools to navigate the world of financial understanding.
Yes. Everyone should have a basic understanding of APR and AER, money coming in and money going out. I couldn't calculate compound interest, I'd use a calculator, but I at least know what it is and why it's either a good or a bad thing depending on which way the money is moving.
A pension plan is, in essence, just a set of tax-related rules 'wrapped' around an investment - often the same type of investment as you could hod in an ISA or a General Investment Account.
Tax efficiency. Just pay max matching with employer contributions until you hit the higher tax rates. Then try to invest more of the higher tax pay into the pension.
Yes because that’s how the world works. I make something on the cheap then sell it to you for way more then what I paid. You can’t make money without someone being exploited or scammed. We pay tax for the government to provide us with services like healthcare and roads but not for it to be syphoned off to rich Tory donors.
What kind of fees are you paying? I do like mutual funds and I know some of them are expensive like the Golden Sachs ones are often more than others like BlackRock and Vanguard etc
Standard life, yes they do partial transfers but only once every 3 years. Good selection but they want 0.4 for main funds and upwards.They don’t show management fee, just give a single fund ocf value which is about .2 ish above the fund value.
So weird! I watched one of your pension videos last night and thought if you would have a video explaining if pensions are a scam and 14 hours later you've uploaded this 😂💯
My dad invested in a legal and general pension for most of his life. He's nearly at retired age and tells me every time how much of a mistake it was. It's worth next to nothing compared to what he put in. I'm following the advice you often give. Splitting up the risk across lots of areas.
In 1991 is was 19, and those kind of pension woes in the news, and my dad, were the reason I didn't want a pension. Now at 51, the realisation a few years ago has set me on the path for a better future.
I read the comments in your poll and it was horrible to read. I fully understand why some people see pensions as a scam and changing that is an uphill battle, especially when people don't understand how their pension works. So many people bury their heads in the sand. My old workplace pension was with standard life and the fund fees were crazy, to top it all off i could only transfer out once every 3 years which meant you just have to put up with it until you're ready to transfer out. Really poor in my opinion. Keep up the great content damo
We're between a rock and a hard place. We don't trust our financial institutions but we can't really afford to put our entire financial futures in the hand of whichever government is in power. My mum resents her personal pension because she could have claimed pension credit if she didn't have it, her private pension seems pointless. But I have no faith that pension credit will even exist in 30+ years when I'm old enough for my state pension.
aging population, higher costs for young people. anything that is forced for your own ''good'' is always a scam. like taxes or anti gun ownership laws.
SIPP is the way to go for me. I asked 25 employees at my family business about their pensions, most didn't even know who the Pension company was, they had no idea what investments the company was putting their money into or what the fees were when they are of age to withdraw.. I'm not a big fan of these 'generic' Pension Companies.
My first job had no pension, so with nothing to guide I picked a pension with an ultra-respectable company. Their name was Equitable Life. After that shambles I took out a SIPP. Pensions aren’t a scam but in some cases they’re close to one.
My big worry is that, (if I live long enough) because I have a workplace pension, I will be means tested as too 'wealthy' to have the state pension. Seems the more you do the right thing, the more you are punished.
This is why i will be using my pension before state kicks in… it’s not a choice more a realisation that my body won’t be able to continue until gov retirement age.
@p9917j yep. Other than the big boss, (who chills in an office and goes home at 2pm absolute latest) there is nobody else in my workplace at 60+. Not many in their 50s come to think of it!
Can't see any Gov in future not paying those who have paid their NI contributions over the years not pay state pension. The reality is state pension will only be a top up at most and any quality retirement will have to rely on a personal pension
Some SIPP pensions have a protected age at which you can withdraw your pension. Mine stays at 55. Going to try to find one for my 6 year old and see if they offer something similar. Its worth checking your private pension terms and conditions.
Do you mean it is protected at 55 even if state pension rises? So it’ll no longer track it but minus 10? Can you mention any of the providers / schemes which offer this? Haven’t heard of it but very interested
@@XadJack yeah so the withdrawal age is protected now despite the state pension age being raised to 67 and then 68, I guess due to the time I took it out, which was only a few years ago but before they announced the raising of the minimum ages, I think. Essentially it's yet another reason to be absolutely sure that your existing pension doesn't have benefits that you will lose if you transfer out completely.
@@johnristheanswer I've set one up already, I just wonder if there is one that would allow them to take out a pension at an age before her 60s. Which given the current trajectory I seriously doubt. The fact it's a junior sipp makes me think that any transition to an adult sipp would be subject to the current rules when they hit 18, Vs mine where my sipp allows me to begin withdrawal at 55. Also, because of the future pension changes, this sipp will be the only one that will give me that flexibility unless rules change in the future. And they likely won't change for our benefit .
I'm glad I'm on the right track. I've got a public sector defined benefit pension, a private sector defined contribution stakeholder pension and I've just started paying into a stocks and shares ISA. My husband is older than I am and I'm likely to outlive him for several years. I want to enjoy some retirement together. I want to be able to at least semi-retire when he fully retires. It doesn't seem like a big ask but with them pushing both SPA and early retirement further away I need to generate a passive income that the government can't refuse me access to.
I like my work pension, currently put in 238 a month myself, in total with employer contributions 804 goes in a month. I’m 27 and hope to retire at 55-60.
@@coderider3022 so ive been doing this since i was 22, started on a low salary and now have doubled this since. I have also changed the funds to a more aggressive approach and will lower the risk in time
@@coderider3022 10k a year pre 30s assuming rising contributions over the course of career progress is certainly a reasonable start point. 55 might be ruled out by not being able to begun pension until 57 which might have increased in the next 20 years.
@@coderider3022 A SIPP following a mix of ETFs such as FTSE All-World and S&P500 would get him a decent pot at 55, even starting at 0 (although he'd want to reduce risk at 50 so the final few years might grow less, but more safely). In a fees-charging mass-market pension provider that is invested poorly, clearly not. Also I would imagine he would get above-inflation promotions two or three times in his career that would bump up his contributions. OTOH children and other shocks might cut back contributions for a while.
Thank you so much for these videos. It's teaching a lot. I've been pretty bad with investing. I opened a vanguard account back in 2018 and really tried to understand the differences of each fund. I ended up putting in terrible funds that did very poorly and I totally got scared when it all cam crashing down in 2020 because I didn't understand why. So I totally missed out on these last few years haha
1,5% buyin and 0,3% management? Here in Belgium 2,5% buyin with 2+% annual fee is normal. On a 4% return fund! The 30% tax break is lost in a few years on fees alone and in 40 years, almost 70% of the total potential is lost to the annual fee eating away your savings. I'm exhausted explaining this time after time when someone tells me they're saving in a private mention scheme at one of the major banks here in Belgium...
I think Royal London charge way too much. Tied into to a policy that was protected rights SERPs until I am 55 so in 2 years I will be moving it to my company Standard Life as the management fees are very low !
You can normally only leave half of your pension to your partner, the government takes the rest. That's not on in my book. My dad didn't even get that, he only got 10 percent of my mum's pension. She worked for the local council, but he's not even allowed 50 percent. It was a waste of money, paying into it for them. Most pensions are crap tho anyway. They say you'll have a million pounds in your pension, but a million pounds when I'm old will be like 5 years money.
That's a defined benefit pension... there was nothing stopping him contributing to his own personal pension. The government hasn't taken anything... the scheme only paid your dad till he died. They're not gonna pay your mom the full whack as well, that's just silly 🤣🤣
@@chrishardy34731, He did contribute to his own pension, what makes you think he didn't? 2, My dad is still alive, he hasn't died. 3, Plenty of people get half of their partners pension, if they die. Getting only half of what your partner paid in, is a joke. You should get all of it.
If pensions are like cars, I want a Toyota not a Range Rover. I have a messy selection of pensions from various past employments (one of which was under PPF for a while) and private pensions, and hope that it will all come out OK in the end.
I am fortunate that I've worked long enough, and am old enough, that I will get the full state pension at age 67. I was also auto-enrolled into the workplace pension which I paid into until I stopped working in 2022. 18 months later, that pension pot had not grown at all, so I've moved it to a company that actively manages it, and I'm seeing the benefits already. Yes, I pay a fee, but I'm ok with that. I started my first shares ISA last year, it has 5 divident stocks. I will add again in the new tax year. I also have a general investing account. That's about all I can do for my future. Hope it's enough.
Good for you for monitoring and taking action if you are not happy. But just need to temper that with saying 18 months really isn't long enough for returns, and it is likely your improved returns are actually more reflecting the market than the fact they are now actively managed.
Smart pension was charging a flat fee of £39 per month to invest it in their fund. Crazy when you calculate this over longer terms, My work chose this as its one where the employees pick up the cost, my SIPP is about £13 for exactly the same service. From what I have read, your employer, doesn’t have to give you a fair or reasonable deal in terms of provider, it just has to provide you with a pension regardless of good value. so technically if I want to move it away from them, I believe My Work will see it as an opt out of this scheme, so I would lose their contribution. Still looking into it though.
A major issue is that people are invested in default funds within workplace pensions. These are totally unsuitable for long term investments held by young workers.
If we force providers to have too low fees we may end up harming new competition from starting. Not only does NEST have terrible fees they are the slowest and most obstructive common pension provider when customers want to transfer out, there are more steps than most other providers
I recently noticed that, i was hoping to transfer out, but have to stop paying in, before they will even consider a transfer, and then some. I got no choice, as im part time with a Agency ( Manpower), and thats their choice for workers pension.
@@garyten13 You have to hope that the vague plans for Pension Provider Choice are made concrete at some point, this will mean that the employee can choose their provider, and their employer will make the contributions direct to that provider rather than their default provider. Most employers use standard third party salary management systems anyway that must already support many providers.
I have a SIPP and it’s my priority for tax reasons. I get 8k added for free from the government for tax relief at source, an instant return of 20%, where else would you get that? I claim back 10k from my taxes as a 40% payer, through self assessment. So there’s 18k for free. I hear you say, but it gets taxed when you take it out….. well you get the 25% tax free sum up to a certain amount, but during that time you have also benefited from compounding. Depending on your age, this will substantially outgrow any future tax liability.
@@DamienTalksMoney make sure you ask Emma if her cruises are classed as a business expense and so tax deductible 😁 as i've alway wondered with many travel channels if this is the case as they are a business after all.
Trusting in the pension system is a trust in the state and financial system - both of which have a history of mass corruption, fraud and mis-management. Be cautious, the future you are promised is not guaranteed - and the state can decide to change the age/ conditions to access at anytime.
Love it Damo! I am waiting for a transfer from SW to SIPP to V. I have asked SW how many times I can do a partial transfer in a year and the response was as many as I want. Happy days! Take care Damo!
after watching one of your videos, i did indeed notice that i had been put on a default retirement pension plan on Nest. I have changed mine to a higher risk plan to see how it goes. im only 46 so have plenty of time before retirement..
Quite annoyed that the default auto-enrolment funds of Legal and General perform so badly. Mine was down 10% on the total contributed. After your last video, I switched the allocations to something more like a global index tracker and thankfully it's now at least back in the green.
Sounds v similar to local Gov pension numbers but that's a defined benefit scheme. My employer does 7% contribution max which I thought was good compared to the minimum 3%
But you still need to determine whether that will give you enough income in retirement to live the lifestyle you hope for. ( Those calculation can be done. )
One way to alleviate the concern over a government changing the rules in 30 years is that making a negative change to pensions is a vote loser whenever they do it. So it will be a vote loser in 30 years time as well. The best money decision I ever made was to ignore all the overly worried folk in the late 90's and early 2000's, who were running scared of pensions. I've paid AVCs throughout (ramping this up over time) and retire next month aged 53, bridging the gap to 55 with other investments. Everyone who can, should do this. We don't drive our cars worrying if the road just stops around the corner.
My dad worked for a major UK company in the 70s who say they can find a record of him working there but "lost" all the details of his pension. It put me off a bit so that I would now prefer my own private pension. Probably won't get a state pension in my lifetime.
This is something ive thought about a looooot recently. Ive come to the conclusion that im going all in on index funds until closer to retirement when ill start moving funds to safer places. Ive still got 29 years until i will likely retire. The ultimate flexibility and control with a potential for higher returns is just too tempting for me.
Yep. Uncertainty. At least 20 years ago I took the view that there wont be a state pension by the time I get there. Coupled with numerous company pensions from changing jobs with silly little pots. Yeah I can combine etc. But yes, pots under my own control I think is the way to go.
To some extent work place pensions should be non mandatory and it be possible to opt out of the state pension. The policy was designed to help those who didn’t plan for the future and enabled investments in the UK through pensions. But since most are now invested overseas and pensions can take a could chunk out of earnings with no guarentee of decent returns by retirement the option should be given to people.
Great video once again Damo 👍🏻 I contacted NEST last year regarding partial transfers and the answer was no. I remember reading a few years ago that the NEST high fee structure was because it was government funded initially to create it and obviously the government want their cut!!
Surely they can't just say no?? It's your pension money, you can hold it with whatever provider you want and in whatever amounts. I have found with transfers, best bet is to operate through the new provider, and let them do the leg work for you. So for example if you wanted to switch to Hargreaves Lansdown from NEST, open an account on HL, and initiate the transfer from there. They would then use their clout to knock NEST into line. Bottom line, NEST can't dictate to you where your money goes
@@M8d9R Here is the main parts of the reply I got from them. You’ve asked us if it's possible to make partial transfers from your Nest account. We are sorry but you'd be unable to do a partial transfer out of Nest. Nest only allows full transfer of pensions at the moment. You can transfer out from Nest to a UK based pension scheme that’s registered with Her Majesty’s Revenue and Customs (HMRC) or a Qualified Recognised Overseas Pension Scheme (QROPS). We can see that you’re still an active contributor with Nest from your employer ‘XXXXXXXXXXXX’. If you wish to transfer out of Nest, you’ll need to be a non-contributor. You can stop contributions from your end as well so that you can become a non-contributor and transfer out of Nest. We hope this helps. If you need any further assistance, you can email us through the secure message area. You can also reach us on 0300 020 0090. We’re open from 8am until 8pm Monday to Sunday. Richard Hardy Nest Member Services Manager
I’ve got a nest work place pension I’m sure I’m able to access it at 55yo. I also put all my wages that fall in the 40% tax bracket into my pension that’s still a saving of 38.2% that’s how I see it anyway.
The normal minimum pension age (NMPA) for taking benefits from a private pension was set at 50 when it was first introduced on 6 April 2006. The current NMPA is age 55, having been increased to that age on 6 April 2010. A further increase in the NMPA to 57 is due in 2028.
Do you pay your own money into NEST or have another pension? If I were you (I do this) get a SIPP (I'm with Vanguard) and pay your own money into it unless your employer matches contributions. NEST charge you 1.8% for paying into it.
Completely agree, standard regulation of fees, and also payouts should be at the forefront of any future pension reforms. The biggest scam IMHO is annuity purchases at retirement. Many are forced into this without knowing there are options. My last wrokplace pension quoted 160K at 65, giving me 40k lump sum and 3k a year pension, It's now in my SIPP, and doing much better than they forecast. The other issue, is the crap returns from most DB investment options. Many don't change their investments from the standard Lifestyle options in their schemes. You don't need schemes investing in low risk funds in your 30s
Lots of self learning and a huge amount of luck is how I somehow made it to early retirement. Thanks for your help on this treacherous journey. I heard somewhere, if your hope is for a government to help you, just remember they can’t even sort out the potholes. 😂
Thanks to your previous video on the topic I changed my pension to a lower-fee plan, index fund. And I told a bunch of friends about it. Thanks a lot! I'd rather keep my private-pension contributions to a minimum. I am sure I'll do better by having access to most of the money now and invest them myself.
My work based pension is with the Peoples Pension, there is an annual charge of £4.50, then a management charge of 0.5%. They have a rebate system depending on the size of your pot, pots over £25,000 get 0.25% of your management charge back and pots over £50,000 get 0.3% back. It seems a bit more reasonable from what i see the other providers charging.
The crazy thing is that the spending power of the current generations of retirees is a huge boost to the economy. The next generations of retirees are going to be far less well off on average, that means the UK economy is going to take a huge hit. Retired people will be spending less money, they will pay less income tax on their pensions and fewer people will own their own homes which means fewer people will be able to finance their end of life care through that assett. The result will be a doom loop of a poorer ecomony and higher taxes for those still working. That fact alone should trigger even a tory government to do more to ensure people build up adequate pension savings. But as Damien said for many politicians who are not really interested in the long term good of this country that's a tomorrow problem, a some one else problem.
That generation will inherit a lot of wealth too don't forget. Report in today's news saying Millenials will be the richest generation ever so that theory doesn't stand up.
They are not scams. The only people who say that are those who are clueless about finance. If there is a scam it's the UK state pension, which is the lowest in the OECD.
The biggest con in workplace pensions is the lower & upper earnings limit, surely the lower earnings limit was so low earners didn't have to put money they couldn't afford into a pension & not so my company didn't have to put in for the first £188 a week of my earnings. there is no reason for the upper earnings limit as far as I can see apart from being a cop out for employers to save themselves money
My original pension was with Equitable Life which went bust and lost me quite a bit. Since then I relied on an advisor who kept moving my pension around to different companies I didn't pay it much attention as I was busy working but in the end I did notice the extortionate fees she was getting along with the management fees to Prudential. My advice is do not trust these people. She was also one of those who wrongly advised British Steel employees to transfer and has been cancelled by the FCA.
Your analogy regarding pensions and cars is a good one , the problem is that many people fail to study either subject properly and rely on others to deal with the complexities of both. I am a firm believer in , never take your car to a garage and never let anyone deal with your pension. Repairing cars and trading shares in a SIPP are both enjoyable pastimes , saving money and building wealth. George Osborne gave us all the chance to manage our own pension , keeping it uncrystalized and never having to purchase an annuity , drawing out what we want , when we want , while keeping the capital to pass on to our children.
Paid into a workplace pension for years, as I was told to by everyone at 22. After 4 years, I realised it was a scam. Worth £20. I also got hit with a £2000 tax bill..
Surely the governnent can also move the goal posts on LISAs any time they like as well? Or, for that matter, student loans... I see why folks say its a scam, and have gold in the safe...
The big thing about pensions is that the UK tax system assumes anyone earning over 65K is not an idiot and will set themselves up to be tax efficient. If you are earning over 65K and not being tax efficient and therefore an idiot, HMRC will gladly take the money off you. Pensions are the one place the Taxman can't touch, so it makes sense to put income that would be otherwise taxed at a high rate into a pension or other tax-exempt vehicle. The difference in tax bill can be large. Also worth noting that pension contributions tend to raise your maximum tax free amount from 12.5K for the following tax year if you put in large amounts. Again, this can be significant re tax bill, and worth it as an approach if you are approaching 55 and get a windfall (which is quite common - inheritance, etc - leave that supercar on the forecourt, lose some weight, and look to the future instead if you want to really cultivate your looks!).
Many employers didn’t get the choice when auto enrolment came out. The traditional pension companies still won’t take on any but large, well paying employers. So Nest is the only option for many. It’s not a bad scheme, but it’s under 0.5% Inc initial and ongoing combined over the medium to long term, which is low cost and there are other funds other than the default
I have a pension with nest and it’s not as bad as everyone thinks. I have the ‘hail Mary’ plan, it’s like any investment, you won’t see a big return until you get a bit in… time and compound interest…anything other than that is luck…I like the fact it’s 100% guaranteed.
How is it 100% guaranteed? It's only got the same guarantee as any other pension provider, there's no guarantee the investments will grow. They charge higher fees than some other providers AND charge you for putting the money in the first place! Their platform is also a pile of cr*p@@charlesbrown4941
Thanks for raising an important topic and sparking such an important conversation here about pensions. We understand the concerns raised, especially regarding past scandals, high fees, and the complexity of pensions. At Penfold, we're on a mission to transform the pension experience for the better for exactly these reasons. We were founded with the belief that saving for the future should be accessible and engaging, Penfold is designed to address many of the issues you've highlighted. Pensions can indeed be complex, but we’re here to simplify the journey, ensuring it’s as smooth and rewarding as possible. We hope that we can shift the narrative around pensions to something more positive! Any questions feel free to reply..
Hi Damien. I have enjoyed all your videos and the recent few features about pensions and your work place provider fact sheet is great. However a lot of workplace pensions have a discount while employed on the provider fees and I am not sure that's covered. I understand you can't collate all of that info but felt this was missed and the video encourages people to transfer what they can to a sipp. For example my fee with standard life is 1.018% but my discount is 0.81% meaning I pay 0.208% a year on my workplace pensions.
This is a great point, so the discounts will be employer specific I imagine so no way for me to collate these but I will add to the sheet how people can check this. Thank you
The biggest casualty of the Steel workers pension scandal is it’s now virtually impossible to transfer a final salary pension !!!! I gave up even though it would have been in my best interests
Take a bow @damiantalksmoney. Clear, articulate and balanced as always. Your videos are providing a real public service. Thank you for everything you do.
The scam is the constant pushing off goalposts. Retirement age from 57 (I think)and I guess by the time we retire it will be 70. Put the money into an isa and have freedom to move it out of the rules of the game are going to change. With a pension you’re trapped.
It’s a scam on the basis you are told one thing when you sign up but told different later after you commit a tonne of money. You have no choice to disagree with the increase in retirement age.
Like Damien says, invest in both. You can retire at say 55, use the ISA money to live off and the pension pot will cover you in later years. You could even obtain a bridging loan, maybe borrow money for house renovations and pay it back when the pension is crystallised. So, there are work-arounds.
Not only do people think it’s a scam I think the fact that you need a private pension after paying into the system for 40/50 year is a joke and leaves a bad taste in people mouths.
Lack of choice by workplace pension providers is a scam. My provider doesn't allow partial transfers and has a woeful selection of funds which all underperform any reasonable benchmark/index and have higher fees. They also pocket all the employee ni savings even when you make contributions above what the employer match. I work for one of the biggest companies in the UK.
Having a nightmare getting my head around the US pension schemes now I work in US. Naturally very cautious when seeking advice on my 401k and Roth IRA pension schemes.
I guess the government also doesn’t want too many people retiring early (particularly highly skilled people who are the most likely to be financially able to) as we have a crisis coming on the worker : state pension recipient ratio. More people in work for longer helps address that. I don’t want that but I can understand the logic.
The Government can change the pension rules . This means they can means test the state pension & deduct your private pension income from your state pension entitlement. Your private pension will cost you part or all of your state pension. Therefore a total scam.
I'm fortunate enough to work on the railways where you can get a Final Salary Defined Benefit scheme. My biggest worry is the moving pension age will make it almost pointless putting money into a SIPP. The majority of my investments are held within an isa and thats likely where my allocation will lye for at least a decade.
