Russ-Turner
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| posted on 17/9/08 at 07:28 PM |
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After some money advice please...
Hey all.
I'm self employed and am stashing away seventy quid a week into a bank account set up purely to pay my tax bill out of when the time comes.
I've also been putting away some money into a pension plan (aren't I organised?) for the last eight years since I was eighteen. My pension
contibutions increase anually automaticaly and have gone from about thirty pounds per month, per annum to fifty per month, per annum.
Now, because I pay into a pension the government kindly throw something like another tenner into the pot which means that my total contibutions per
month are around sixty pounds. Great, but Abbey have kindly lost five hundred pounds of my hard earned cash simply put down to 'investment
losses' in the last twelve months alone . So simple maths says that for the last twelve months I've had +£120 from Mr. Brown and -£500
from Abbey meaning I'm -£380 down on the deal.
Now, can anyone that knows more about this stuff than me give me any advice as to why I shouldn't just pay both my money put aside for tax (£70
a week if you have read down this far... probably won't be that much though but it gives me a good margin) and the £50 per month that goes into
my pension into Premium Bonds?Thanks in advance.
[Edited on 17/9/08 by Russ-Turner]
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mr henderson
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| posted on 17/9/08 at 07:38 PM |
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Premium bonds are OK apart from the fact that you don't gain any interest (unless you win a prize). So in effect your miney shrinks by the rate
of inflation.
If I had any money to invest, which I don't, I would be thinking of starting a business of some kind, something which had a value beyond just
self-employment, something which could be sold when I wanted to.
John
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Jon Ison
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| posted on 17/9/08 at 07:38 PM |
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Difficult, until recently good advice for a pension may have been bricks and mortar, tbh even with house prices etc in there current state you wont
lose out in the long term investing in good old bricks.
Laugh as much as you like but works of art or other things that will appreciate in value are worth a look to.
I don't know of any pension plans that are performing or have performed well in the recent past.
Provided you can leave it alone your £60 month would make more in your average building society than a pension plan.
Pay it into a few isa's ?
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Simon
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| posted on 17/9/08 at 07:41 PM |
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Well, I'm deffo no expert in the field of pensions, but since tax grabber Gordon went and raided the pension funds for a bolster, I see even
less reason to put money into one.
I was employed in London for 20 years and made contributions there, but I will not even comptemplate putting money into any of the pension funds -
once it's in, it stays there!
I'm going to try and buy a holiday home abroad which will provide me with retirement income (after mortgage is paid on it, but not due to retire
for 23 years).
There was talk of Gord doing a pension scheme incolving property purhase with tax relief, but you had to flog the property and buy an annuity. Another
big no no in my book.
Trust me at your peril, trust a financial "expert", also at your peril
ATB
Simon
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martyn_16v
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| posted on 17/9/08 at 07:44 PM |
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Gold.
I heard an interview with a city trader the other day where he admitted he didn't have a pension as he knew what was likely to happen to it. All
his spare cash went in to commodities, gold, platinum etc.
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Dave Ashurst
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| posted on 17/9/08 at 07:44 PM |
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I'd seek some good independent professional advice, Russ.
With the greatest respect I wouldn't take financial advice from a bunch of anonymous poor people like us!
(Especially not on something as important as your pension.)
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JoelP
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| posted on 17/9/08 at 07:48 PM |
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ditto above, but FWIW i went for property. Fortunately i bought long enough ago that i cant realistically lose out, unless they get demolished!
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The Great Fandango
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| posted on 17/9/08 at 07:50 PM |
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Stash it in a suitcase under the bed or bury it in the back garden.
Seems the safest option in these credit crunching times!
He Who Dies With The Most Toys Dies The Happiest
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StevieB
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| posted on 17/9/08 at 07:51 PM |
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I have a limited company and all my liabilities go into a business savings account. Thats VAT, corporation tax, income tax and national insurance
(both employees and employers).
My advice would be to do what you want with your own money, but don't put your liability provisions anywhere that you can't get to it
quickly. It's not your money, the government just have't asked for it yet - when they do, it needs to be on hand and paid within the
timescales.
As for what to do pension wise, best go to a financial advisor (and independent one) and take advice from the professionals.
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Jon Ison
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| posted on 17/9/08 at 07:52 PM |
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With the greatest of respect Dave who pays their wages ? No one but no one can work for nothing.
Wouldn't be commission from the products they sell would it ?
Now the quandary, do I sell the one that pays xxxxxx commission but not so good for the punter or do I sell the one with just xx commission but sound
for the punter ? After all my pension ain't doing so well so I got to get money in bank somehow ?
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StevieB
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| posted on 17/9/08 at 07:59 PM |
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quote:
Originally posted by Jon Ison
With the greatest of respect Dave who pays their wages ? No one but no one can work for nothing.
Wouldn't be commission from the products they sell would it ?
Now the quandary, do I sell the one that pays xxxxxx commission but not so good for the punter or do I sell the one with just xx commission but sound
for the punter ? After all my pension ain't doing so well so I got to get money in bank somehow ?
You'll never really know whether you could have got a better deal. But sometimes you pay a fee for the advice, rather than them taking
commission on products.
Plus, by independent, it means not working for a bank, where they will only recommend products available from that particular bank. An independent
advisor will recommend the same products probably, but you can find the best rate of return available across all the products available.
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Jon Ison
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| posted on 17/9/08 at 08:06 PM |
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Think about it, a wider range of juicy commissions available to the independent than the employed ?
Are the FSA still paying out huge sums due to miss sold pensions advice ? I got over 50k paid into my pension fund by them due to poor advice from an
independent ?
eta If I could the whole lot would be out now, its making bugger all where ever you choose to put it, a good year at the moment with a pension is if
its still worth the same on week 52 as it was week 1
[Edited on 17/9/08 by Jon Ison]
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MikeR
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| posted on 17/9/08 at 08:15 PM |
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Look at it another way, go to an independent and get poor advice - you'll never go back.
Go somewhere and get good advice, you'll got back and tell all your mates.
When i got my mortgage i asked the bloke straight out i wanted to see the commissions. He showed me. I got a mortgage that had below average
commission from him. His reasoning was that i was speaking to him because of word of mouth. I'll then tell my mates and he'd get more
business that way than by ripping me off.
It worked. I did tell my mates and he got more business.
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Paul TigerB6
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| posted on 17/9/08 at 08:26 PM |
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quote:
Originally posted by MikeR
Look at it another way, go to an independent and get poor advice - you'll never go back.
Go somewhere and get good advice, you'll got back and tell all your mates.
When i got my mortgage i asked the bloke straight out i wanted to see the commissions. He showed me. I got a mortgage that had below average
commission from him. His reasoning was that i was speaking to him because of word of mouth. I'll then tell my mates and he'd get more
business that way than by ripping me off.
It worked. I did tell my mates and he got more business.
As above, best option is to find a reputable advisor. There are cases of mis-selling but most of these are from years ago before the industry became
very heavily regulated. A good advisor will not sell based on commission for the reasons above, plus they may well have to justify themselves to an
FSA inspector. As for the mortgage case, by law they have to provide an illustration showing the commision payable to the advisor, and if you get the
same mortgage from the bank it just means a bit more work for them but also more profit.
As for should you continue paying into it, well yes the markets are poor at the moment but its happened before and it will happen again. In the longer
term though, there is an upward trend going back years and years. A pension is a very long term investment and at least you get your tax relief from
the government invested too. If you think about it, buying when your funds are cheaper (like now) gets you more units in the investment so when the
prices recover you will see the benefits more.
As stated though, seek proper advice on your options.
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oldtimer
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| posted on 17/9/08 at 08:52 PM |
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You have plenty of choises. Take a pension break and invest elsewhere at the moment is my advise - it's what I am doing after last year when my
pension fund stagnated even though I was putting in £180 a month. Moneysupermarket.com has a section on the best cash isa rates about - 7% can be got,
tax free too for your saving level I believe. Just don't stop saving - it's a habit that can only do you good in the long term.
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Russ-Turner
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| posted on 17/9/08 at 09:14 PM |
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Thanks for all of the replies guys, you've given me lots to think about.
Cheers.
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coozer
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| posted on 17/9/08 at 09:15 PM |
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Spend it, beer and spare engines springs to my mind, not sure why....
Bricks and mortor for us, trading up into a bigger house then sticking a big extension on. Huge returns in years to come.
1972 V8 Jago
1980 Z750
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Ivan
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| posted on 18/9/08 at 08:22 AM |
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For retirement you should never look at short term returns - i.e. look at how your fund has performed in the long term - not at how it is currently
performing - there are currently very few investments that will give you good short term returns in the current market. If you pull out of the fund
you are locking in your losses but if you stay in and the fund has retained the investments it made you might very well recover your losses and better
when the inevitable recovery happens.
In fact those that are currently performing well might be really poor long term performers.
Find a fund that allows you to apportion your investments between equity and interest, learn as much as you can about all forms of investment and you
might just be one of the lucky few who can outperform a long term investment in a basket of blue chip shares.
[Edited on 18/9/08 by Ivan]
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