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Bakez

Will private pensions exist in 25 years?

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We all know that state pensions won't exist, but what about private pensions?

If my employer is putting 8% of salary into a pension plan, is this really a benefit seeing as in 25 years time that money will be down the drain?

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4 minutes ago, Uptherebels said:

Care to elaborate on that second part? 

The state has the back of the public pension people and will print print print. Privaite sector people have to resort to the stock market and you basically have to become a stock guru to try and generate a big enough pension pot.

In the public sector no matter what happens - no matter how crap the economy goes or how low the stock market goes - the public pension folk still get their pensions. A private sector person has to be brilliant to build up a big pension pot via stocks and can easily lose 90% of it in a major crash.

If I had realised this 30 years ago I would have gone into BTL.

Btw, I just posted over on the financial thread that a US forum that I am on, which has some seriously clued up and wealthy people on it, have been discussing in the past 24 hours that the US stock markets have topped. They think they topped out last week or perhaps will top sometime this week... one guy reckons it might take as long as till next week...

But they are expecting the US markets to lose up to 10% between basically now and sometime in November. It could be a sideways churn. They think that in 2018 we will see 10% to 20% drops in the US markets.

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Who knows really? I have a workplace pension which my employer contributes 5%. I used to pay in 10% on top as I was going by the old rule of putting in half the age you were when you started as a percentage. Then about 4 or 5 years ago I decided to properly read my yearly statement (as I hadn't bothered up till then) and noticed that my estimated annual pension, come 65, would be a pathetic £6000. I decided that simply wasn't good enough to be nearly £300 a month down and could do with the extra now so I withdrew my 10%. The most annoying part is my Dad used to pay about 5 or 6% into his workplace pension (with employer contributions on top) and retired with a yearly pension of about £15k. My Dad and I earn roughly the same when adjusted for inflation. I was paying in nearly double what he was and was being told I should expect less than half what he gets back - they can fuck right off. Even my old man who is very much the old school type of "You must save for your retirement boy" told me I was probably wasting my time with a pension that crap.

We were told last year that in 2018, by law, all employees in a workplace pension must be paying in at least 8%. My employer is not going to be making up the difference so I have a choice of either making up the difference or quitting the scheme altogether. I haven't made my mind up yet.

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If El Corbyno becomes president for life prime minister then its's highly likely they will only exist in the form of forced investment into worthless government bonds. Otherwise I see no reason to assume they won't still be around.

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9 minutes ago, The Masked Tulip said:

Do muslim states have pensions?

Muslim guy at work says to me he is opting out of pension contributions, I said recommendation is to put as much as you can in, he says no need because his children will be his pension

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3 minutes ago, ThePiltdownMan said:

Muslim guy at work says to me he is opting out of pension contributions, I said recommendation is to put as much as you can in, he says no need because his children will be his pension

His children will probably not want anything to do with him by then, like they say, you have no choice in who your parents are, expecting your kids to financially support you is like burying your head in a bucket of sand and saying lalalalalalalalalalalalalala.

The bloke is a twat.

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I am pretty sure both state and private pensions will exist though what they will be worth in real terms is another matter entirely. For a start capital markets themselves need that private pension money simply to survive.

I certainly would not ditch a defined contribution company pension even if the annuity forecast valuation is currently crap. The employer contribution and tax relief alone make it worthwhile having it. You also need to remember that current pension forecasts are based on historically low interest rates which are unlikely to continue forever. So unless one was planning to retire in the next few years it would be worth hanging on.

I am always slightly puzzled by those who think that pension schemes are inevitably doomed to be destroyed in a financial armageddon but that their own preferred saving vehicles be they cash deposits, ISAs, stocks, BTL etc will somehow magically survive. The reality is that if pensions are wiped out then you can probably wave goodbye to everything else apart from precious metals, guns and liquor.

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8 hours ago, Flirtygirty said:

The reality is that if pensions are wiped out then you can probably wave goodbye to everything else apart from precious metals, guns and liquor.

And baked beans, don't forget the baked beans.

Regarding pensions. You are basically buying a piece of paper which you hope can be sold on when you retire - that requires having people who want to buy your bit of paper. If the population is shrinking you have both a smaller base of people working compared to retirees and less people want to buy your assets. The plan was to palm the assets off onto a growing second and third world. Certainly the Chinese are buying stuff in the West but whether that will be enough to keep the plates spinning.

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Funded pension schemes are basically lemons because they are run by risk-averse actuaries who buy long dated bonds that pay sub-inflationary rates and are essentially a slow way of losing money.

If you are working at a stable employer and it is a defined benefit scheme then it is not your problem as your employer will have to make up the shortfall.

If it is a defined contribution scheme then you will probably get a rubbish payout as the investment choices will be poor and the charges high.  However as usually the employer matches your contributions this should offset some or all of this.

I'd always have a SIPP as well though.

.

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14 hours ago, Chewing Grass said:

His children will probably not want anything to do with him by then, like they say, you have no choice in who your parents are, expecting your kids to financially support you is like burying your head in a bucket of sand and saying lalalalalalalalalalalalalala.

The bloke is a twat.

Generally speaking if his children don't want anything to do with him then they'll be rejected by the entire "community" and will be pariahs. Such is the culture.

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