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Pensions guide from The Lolly

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Saving into a pension is easy once you know where to begin. To help you get started we’ve compiled some of our best videos and articles on the subject. These cut through the jargon to explain how pensions work, how the government tops up the money you save through pension tax relief and the different types of scheme that are available, from personal pensions to company pensions. We also answer the crucial question, how much should you save?

on Jul 21, 2012 at 09:39

Pensions guide from The Lolly

Five things to make you happy about pensions

Pensions aren’t as scary as they look! You’ve heard all the bad stuff about pensions, here are the good things. Watch this video and then read the guides below.

All of these videos and articles first appeared on The Lolly. This is a part of the Citywire Money website dedicated to anyone looking to learn the basics about finance. Sign up for the weekly Lolly email if you’d like to know more.

• What is a pension and how do I get one?

• Sipp: what is a self-invested pension plan?

• How much do I need to save for a decent retirement?

Not saving: the only really bad pension choice

The beginners' guide to pension schemes

How pensions work (and why they're like kebabs)

A home is not a pension

12 comments so far. Why not have your say?

Anonymous 1 needed this 'off the record'

Aug 01, 2012 at 17:56

But the first question is dare you risk having your 'savings' that are to finance your retirement in a 'Pension' fund?

Yes the government will allow the money to be put into a pension fund free of tax - BUT they will get that back when you take out the small amout of money they allow you each year money, and there's 55% tax on what capital is left when you die.

What they won't allow you to do is take out part of that capital to pay for major repairs to your home, needed medical expenses, etc. and that's for you, let alone one of your family.

And - there's the up-front put-it-in-the-fund costs, the annual you-have-a-fund, the look-at-what's-in-your-fund charges, and maybe even the what-you-want-it-out charge, followed by the manage-your-Pension-fund and Pay-the-government-limited-pension, and tax costs.

Then again if you put the money into a cash ISA, or even an investment ISA, when you want it, you can have it and there is no tax to pay and you can use it as needed.

If you put it into a pension fund you are also stuck with accepting whatever changes, charges and taxes the government want to apply to the fund, and your access to it.

------------------

Sick SIPP owner

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john brace

Aug 01, 2012 at 20:37

I absolutely agree with Anonymous Too late for those of us who have saved religiously into a pension over the years - its time this government-sponsored con was exposed.

SAVE IN AN ISA

.

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David Rowse

Aug 02, 2012 at 19:54

Why are all the advisers illustrated fairly young and have no experience of living off a pension? I am a pensioner and have personal experience of living off a state and occupational pension, but no one appears to be interested in asking others like me what their experience is and has been since retiring.

What about a forum for the oldies who are actually experiencing what is currently happening; is practice of no import or relevance to theory??

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Anonymous 1 needed this 'off the record'

Aug 02, 2012 at 20:49

David,

Please consider the 'content' of your comment.

You actually say nothing about your experience of living off a state and occupational pension.

Should I presume that you are very happy, and comfortably off,

OR

NOT

You have a chance to post to the forum, If you feel you have something relevant to say - then actually say it!

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David Rowse

Aug 02, 2012 at 21:28

Dear Anonymous

What I am saying is that I receive a considerable amount of advice from *experts, many of them young", who have attended the correct courses and read the appropriate books, but have not yet gained the experiences of the results of their 'advice'.

Further - perhaps it might be a good idea to encourage a forum for those who are currently experiencing such an 'experience' in reality.

Whether I consider my own experience to be OR NOT is somewhat subjective, but perhaps the responses of a considerable number of 'oldies' in a similar situation might carry more weight?

Of course, in a democratic society I always have the right to post my opinion to the forum, but am certain that not all would want to agree with what I have to say.

Such is life?!

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Rob Walker

Aug 05, 2012 at 10:07

Financial Services over-egg pensions. Of course it is nice to have some extra money in old-age and the current tax regime makes pensions attractive, but most people start pension schemes when they have major commitments - mortgage , family and work expenses. Many fail to optimise their pension provision, believing they are somehow under-invested and will retire in poverty. Such fears are fuelled by pension providers, IFA's etc. Once retired, mortgage paid, kids flown the nest (maybe wife too!) living becomes much cheaper. If there's plenty of money in the pot, maybe best to give some to the kids (at least 7 years before death, ideally) then plan some extravagance to spend everything by. say, the age of 90. Nice life, no death duties.

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Tony Peterson

Aug 05, 2012 at 10:08

The voiceover reminds me of those enthusiastic cold callers selling scams. And unsurprisingly. Pensions are a scam perpetrated by an unholy alliance of governments and the pension 'industry'.

As a pensioner with small private and public sector pensions, as well as my own investments, funding a comfortable retirement, giving marks out of ten for each source, here's how I rate them out of ten value for money wise:

Private pension: 0/10 (in spite of Equitable compensation coming through today)

Public sector pension:1/10 (at least it is indexed)

State retirement pension funded by NI contributions: 2/10

DIY investments in equities including self select ISAs, 10/10.

Our dividends this week alone exceed the annual amount from the other sources (even including the compo).

So, youngsters, save for your retirement by all means but keep it under your own control, directly or in ISAs. Ignore the bribes.

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Concerned Company Pension scheme pensioner

Aug 05, 2012 at 20:31

Whist one totally accepts the wisdom of the need to save for a pension the priority for most young people is to save for a house and providing a reasonable standard of living before starting to save for ones own later years in life.

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DirtyHarry

Aug 07, 2012 at 11:35

With my previous experience on Financial instituitions and their appalling mis-selling and poor performance/ high fees on endowments the best pension is one that is not locked into the financial services sector and being obliterated by fees.

A balanced approach I think is useful so this can be a combination of the following:-

Invest in Antiques and collectibles - At least you can also enjoy your investment

Invest in holiday properties - Ongoing income and can also be enjoyed.

Only put money into a SIPP or personal pension when you get the additional higher rate relief (avoid paying higher rate tax)

Ultimately you will be paying tax at 20% now or on your future pension so why not pay the tax now keep hold of your money or pass it on to your offspring gradually to avoid the UK's awful IHT scheme.

A balanced approach is best so make sure not all of your assets are in property, Personal Pensions - spread it around and most of all enjoy it!

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Marniplod

Aug 08, 2012 at 05:02

If one chooses to use financial advisers and orgnisations to manage ones pension then one can expect them to take large bites out of the capital over the years whether or not the pension increases or decreases in value. The only true way to be master of one's destiny is to manage one's own fund and do what these organisations do or rather what they should do. That is to say maintain a personal investment in blue-chip inflation-beating dividend-yielding stocks. A bit of research is needed which is widely available on the internet. VOD and RSA and RDSA would make a good start. As an expat I in the UAE I've fought off legions of bogus financial advisers so forgive me for sounding cynical about having my pension pot fund someone's Ferrari.

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Puzzled

May 26, 2014 at 11:44

I have a beginner question about some pension advice that I have received.

Can anyone recommend places (sites / forums) where I can post it?

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CLEARASMUD

Jun 18, 2014 at 12:19

Question: My pension provider has stopped my old pension funds and transferred them into another range. I thought a fund is compounded to gain better interest! so If my provider has moved all funds does that mean we have to start again or could the new funds are doing well and the pension provider done the right thing? could some help?

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