Pensions n ting.

[jonthefox]

Is having all of your money locked up in a pension the best preparation for a rainy day? What if the rainy day comes before you turn 55?

I can understand contributing up to the point where your employer matches contributions, but putting in any more than that is unnecessary when you can just put it into an ISA instead. I'm pretty sure the overall tax benefits work out about the same.

With an isa you don't pay tax.But with a pension your given an immediate 20 % extra.

[Ozwin]

I need to save too but I don't know what all these bank accounts and savings accounts etc do. I really should have paid attention in Economics at school.

What's the one where you stick some money in (like 2k) and in 3 years you end up with £500 on top of it?

[dave the caveman]

With an isa you don't pay tax.But with a pension your given an immediate 20 % extra.

But then you pay the tax when you come to use the pension. Whereas with an ISA once it's in there it's completely tax-free.

[Bellend Sebastian]

Pension income is taxed as earned income, but you still get your personal allowance and this is bigger for oldies. Also, when you take your benefits you can usually take up to 25% tax free as a lump sum.

The only pension arrangements where you don't get any choice of where you are invested that I can think of are old style money purchase occupational pensions, but you don't see these very often. Most work pension schemes now are some variation on a Group Personal Pension and usually have a range of investment options. Personal pensions generally have more investment choice than stakeholder plans, albeit usually at a price in terms of charges

[Parafox]

So, are the public sector pension schemes as good or better than a private or company scheme? On radio 5 the other day they were saying a doctor retiring after 30 years service on a final salary of £70,000 would get a pension that a private contributor would have to pay over a million in pension contributions to be equal to.

I couldn't see how this could be true.

I am over 55 and work in the NHS, if I retire now I get £14,000 pa pension based on 30 years of contributions. (I'm not on anything like £70,000). Over my length of sevice I have contributed approx £80,000 in pension contributions. My current contribution is £220 per month soon to rise to £300+ with the prospect of a reduced end of term amount and a longer working life

I have no idea where our pensions are secured, presumably in government-funded schemes that have a return on investment.

And, yes, for the record, I do feel the current government are stealing from us

[dave the caveman]

The doctor is on a final salary pension scheme which will be funded until he dies by hard working younger workers who are unlikely to come close to that level to pension income even with sound retirement planning. It's just another example of the generation who are currently close to retirement monumentally ****ing over their kids. And to think they had the cheek to complain when the last budget announced it wasn't going to make things even easier for them.

As for current public vs private. Public sector workers still benefit from comparatively ginormous employer contributions. The current furore over public sector pensions is shameful considering how much more difficult life is for private sector workers. The government are making you contribute more. Aww, dud ****ing dums, they are helping you towards a better retirement, what absolute tossers eh? Better strike and **** everyone else over even more.

[UpTheLeagueFox]

Is having all of your money locked up in a pension the best preparation for a rainy day? What if the rainy day comes before you turn 55?

I can understand contributing up to the point where your employer matches contributions, but putting in any more than that is unnecessary when you can just put it into an ISA instead. I'm pretty sure the overall tax benefits work out about the same.

I use up my ISA contributions fully and feel investing in my retirement is worthy, especially as the Govt add 20%

My mortgage is fairly low - under 30% of what the house is worth. I have other investments which can be accessed easily should that rainy day come and re-mortgage is always an option.

I've always been a big saver. Just the way I am.

[Parafox]

The doctor is on a final salary pension scheme which will be funded until he dies by hard working younger workers who are unlikely to come close to that level to pension income even with sound retirement planning. It's just another example of the generation who are currently close to retirement monumentally ****ing over their kids. And to think they had the cheek to complain when the last budget announced it wasn't going to make things even easier for them.

As for current public vs private. Public sector workers still benefit from comparatively ginormous employer contributions. The current furore over public sector pensions is shameful considering how much more difficult life is for private sector workers. The government are making you contribute more. Aww, dud ****ing dums, they are helping you towards a better retirement, what absolute tossers eh? Better strike and **** everyone else over even more.

How are they doing that then? Statistically, I'm more likely to die "in harness" before I even get my pension. And if I do make retirment age at 67 I will recieve a smaller amount than I had planned for over the last 15 years. The only way I can have a bigger pension is to take a a second personal pension scheme which I can't afford. I'm not saying public sector pensions aren't good by comparison, but would you be happy if you had paid in the amount I have, to then be told, well actually we're taking some of your savings (effectively, thats what a pension scheme is) off you and you will have to give us more of your life and more of your money. Never mind whether I can afford it or not. I have no control over the amount I am made to pay in.

And, as has been seen during the Brown years, public sector pensions are raided by the Government. If your private pension providers used your money to bail themselves out of the crap, you'd be taking them to court for embezzlement.