Re: Pensions : Tue Feb 25, 2014 12:52 pm  

Karlos wrote:

Take out a SIPP and do it yourself without the need of an advisor.You will need to do some research though , dont do it blind.

The problem with that is you have to spend time handling your investments and it's easy to get things very wrong by poor discipline.

More generally, seems to me SIPPs are just another con - they line the pockets of IFAs when they advise switching out of insureance companies, of SIPP providers and in my case stockbrokers. The time I've paid all the fees, especially the 'brokers discretionary management fees it has been almost impossible to make positive, inflation adjusted growth over recent years (except this last year).

For most people, I guess the best possible is to decide what index you wish to track (eg FTSE 100 or whatever) and just invest in the lowest cost tracker fund. Then forget about it until about 10 years before retirement when you start to need to consider reducing exposure to shares.

The big problem with investment managers is they are only worth paying if the outperform the market. Despite all the hype, glossy brochures, "reguaralry top quartile" etc there is no empiraical evidence that they do. If I recall correctly, it would take 15 years straight outperformance of the market by a fund manager to be able to substantiate a claim of outperformance. There will be virtually no fund managers that have been in post that long. So all claims are just marketing drivel.

PS None of the above should be construed as advice!

PPS I kept a smaller part of my limited pension funds with an insurer and it has outperformed the SIPP.

Re: Pensions : Tue Feb 25, 2014 1:02 pm  

Karlos wrote:

Self Invested Personal Pension. I got one as I had a works pension with Aviva or Norwich Union as it was called. Absolutely useless they are. When the pension lost money during the bull period around 7 or 8 years ago it was the last straw for me. With the Sipp you decide which funds , stocks and shares your pension is invested in.If it loses money its my fault. I didnt see why I should pay fees to a useless company to lose my money.

earlier, Mintball wrote:

... One of the things I most detest about today is that you're expected to be an expert in every damned thing you need, because so many companies have utterly ditched real ideas of customer service.

Re: Pensions : Tue Feb 25, 2014 1:19 pm  

Dally wrote:

Assuming no investment growth, no inflation and no salary rises 40 years saving 12% of salary would give you a fund of 4.8x salary. At current annuity rates that give you a pernsion of, say, 20% to 25% of your salary. If you assume 5% pa real terms growth (ie above inflation investment performance) I would guess (without doing the calculations) that would equate to a c. 2/3rds of salary pension. Not sure those levels of investment returns will be feasible though?

The really frightening thing is that consecutive governments have now abdicated their responsibility to provide a pension for the current batch of 20/30 year olds and those who follow them and instead point them to private schemes which as you point out in your other post rely more on glossy brochures and unsubstantiated (and years later disclaimed) promises to take care of your future in a way that they already know is not possible.

Its very easy to be cynical about the whole mess that is the financial services sector but also very easy to justify the scepticism when their whole house of cards fell down in such a spectacular way.

Re: Pensions : Tue Feb 25, 2014 3:25 pm  

Dally wrote:

The problem with that is you have to spend time handling your investments and it's easy to get things very wrong by poor discipline.

More generally, seems to me SIPPs are just another con - they line the pockets of IFAs when they advise switching out of insureance companies, of SIPP providers and in my case stockbrokers. The time I've paid all the fees, especially the 'brokers discretionary management fees it has been almost impossible to make positive, inflation adjusted growth over recent years (except this last year).

For most people, I guess the best possible is to decide what index you wish to track (eg FTSE 100 or whatever) and just invest in the lowest cost tracker fund. Then forget about it until about 10 years before retirement when you start to need to consider reducing exposure to shares.

The big problem with investment managers is they are only worth paying if the outperform the market. Despite all the hype, glossy brochures, "reguaralry top quartile" etc there is no empiraical evidence that they do. If I recall correctly, it would take 15 years straight outperformance of the market by a fund manager to be able to substantiate a claim of outperformance. There will be virtually no fund managers that have been in post that long. So all claims are just marketing drivel.

PS None of the above should be construed as advice!

PPS I kept a smaller part of my limited pension funds with an insurer and it has outperformed the SIPP.

It precisely the reason I said dont go into into it blind so you know what you are getting yourself into, be it trackers ,shares ot investment funds. If in the last year you invested in emerging markets then you will have lost out no doubt. If you invested in UK small caps then you will have made a tidy profit. Its all about having a spread of things in my opinion.

As you said in your first paragraph Dally you are right. Poor discipline will cost you.I researched things for about 12 months before I got my Sipp so I could fully understand what I was getting into.

Re: Pensions : Thu Feb 27, 2014 4:06 pm  

Sal Paradise wrote:

Do what the supposed pension investment experts do - look for companies that pay a high dividend - if you had put your money into say BP not only is it very low risk in the long term the return on the investment is two fold: capital growth, since October growth has been 12% and dividend yield is 4,5% so if you invested £3k that would be worth £3,360 plus you would have had £135 in dividend so a growth of near £500 on your £3k investment. A tad better than an ISA!! - 3k invested in St Ives PLC a year ago is now worth a staggering £4,875 - thank goodness for those share save schemes!!

BP is a bad example. Remember how much the value of its shares fell almost overnight with the Gulf of Mexico tragedy? Then there were those other "low risk" companies, loke RBS and Lloyds. Then there was Marconi plc - left with a huge cash pile by Lord Weinstock only for his successor to blow the lot and detroy the company. As very rich ex-investment banker said to me - the problem with shares is when they go down they go down quickly and much more quickly than they rise. You should never invest in less than, say 40, companies in order to try to mitigate risk.

Re: Pensions : Fri Feb 28, 2014 9:54 am  

I love reading stories about Ponzi schemes and bookies. I find them amusing as can be seen by some of the comments on these forums.

It's more amusing reading comments with people believing that concepts are actually reality.

It's a clever set of systems and so many have been sucked/suckered into them.

Some you lose, some you lose even more but it's always the shysters/bookies with the new cars, bonuses etc., very rarely the investors (gullible)