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]

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

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 ?

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

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.

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.)

ditto above, but FWIW i went for property. Fortunately i bought long enough ago that i cant realistically lose out, unless they get demolished!

Stash it in a suitcase under the bed or bury it in the back garden.

Seems the safest option in these credit crunching times!

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.

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 ?

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 ?

---

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]

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.

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.

---

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.

Thanks for all of the replies guys, you've given me lots to think about.

Cheers.

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.

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]