Credit deflation and the reflation cycle to come (part 3)

[Funn3r]

10 minutes ago, Democorruptcy said:

Have you looked into this at all? If your work's pension pot is £30k or more you are forced to pay for financial advice. That's the easy part, persuading them it's the right thing for you to do will be even harder. HL who won't accept a transfer if the financial advice was against it. AJ Bell used to accept transfers even against advice but I don't know about now. Good luck.

Yes sorry I was not clear. What you say is true for Defined Benefit pensions but transfer out of one of those is impossible (in practice) to do these days.

If you have a works Defined Contribution pension (most are) these days then it is likely to be crap restrictive in terms of what you can do with it. You can login and exercise "user choice" but it's usually make a choice of 30 unlikeable things. Well mine is.

Even as a pedestralian know-nothing I could get better value if I pulled it out into a SIPP.

 

[DurhamBorn]

23 minutes ago, Democorruptcy said:

Have you looked into this at all? If your work's pension pot is £30k or more you are forced to pay for financial advice. That's the easy part, persuading them it's the right thing for you to do will be even harder. HL who won't accept a transfer if the financial advice was against it. AJ Bell used to accept transfers even against advice but I don't know about now. Good luck.

There isnt one platform that will take insistent clients now,not even the ones that take from IFAs,so unless you get a yes from an IFA you cant transfer.Many old DB pensions have max 2.5% uplifts,so the FCA etc by helping ban transfers is robbing people of their retirement.All because some thick as pig shit steel worker did theirs and lost it in pink diamonds etc.

[Democorruptcy]

11 minutes ago, Funn3r said:

Yes sorry I was not clear. What you say is true for Defined Benefit pensions but transfer out of one of those is impossible (in practice) to do these days.

If you have a works Defined Contribution pension (most are) these days then it is likely to be crap restrictive in terms of what you can do with it. You can login and exercise "user choice" but it's usually make a choice of 30 unlikeable things. Well mine is.

Even as a pedestralian know-nothing I could get better value if I pulled it out into a SIPP.

 

Good luck, let us know how you get on.

[DurhamBorn]

6 hours ago, Funn3r said:

I have moved my cash ISA to HL Stocks&Shares ISA. 

Now I want to do something about my crap works pension by moving it into a SIPP.

I like HL so far - is it reasonable (from an eggs in one basket perspective) to open the SIPP also at HL, or do people typically choose somewhere else? 

If its money purchase HL will sort it for you,just do it on their site,launches transfer at same time as setting SIPP up.Some transfers can be very quick,a couple of weeks,if your with Mercer though prepare to die before its done.

HL is good for SIPPS nearing drawdown as no fees on withdrawing,some charge for each one.

[Axeman123]

22 minutes ago, DurhamBorn said:

There isnt one platform that will take insistent clients now,not even the ones that take from IFAs,so unless you get a yes from an IFA you cant transfer.Many old DB pensions have max 2.5% uplifts,so the FCA etc by helping ban transfers is robbing people of their retirement.All because some thick as pig shit steel worker did theirs and lost it in pink diamonds etc.

A gauranteed total loss over a few years in bold, even pink diamonds had a slim theoretical chance of delivering real growth.

What happens to the residual within the scheme after that last eligible DB pensioner dies? (assuming the bolded part slashes the real value of entitlements). 

[Pip321]

52 minutes ago, DurhamBorn said:

There isnt one platform that will take insistent clients now,not even the ones that take from IFAs,so unless you get a yes from an IFA you cant transfer.Many old DB pensions have max 2.5% uplifts,so the FCA etc by helping ban transfers is robbing people of their retirement.All because some thick as pig shit steel worker did theirs and lost it in pink diamonds etc.

Just for interest, I transferred my DB scheme. What a ball ache, and 3.5 years later I am still paying the IFA 0.25% pa just out of a feeling of duty because he ‘made it happen’ despite the odds. I will drop him at some point but this year I am tweaking things around and it’s handy to have another take and view on things. To be fair the boring old Pru Fund (with smoothing and all sorts of daft crap) is still up 13% in 12 months. 

You are right about transfers…my pension at 50 (old protected private sector scheme) was a shite annual amount but index linked with a 3% and 5% cap depending on the age of the scheme. I didn’t want to defer it to an older age because I didn’t really trust the scheme as it kept changing. 

So I didn’t need the pension income as such, didn’t want to defer and was offered almost 50 x my pension as a lump sum.

The official regulatory pro’s  and con’s were so misplaced. For example the official line was “if you are married take the company scheme because your wife gets a nice 50% widows pension”. But my view was if I died and I had a SIPP my wife gets 100% because I wouldn’t be drawing it….oh, and then the kids get it.

My basic thought process for anyone asking was simple. If you are going to make the decision using a calculator eg use the lump sum to try change a £10k pension into say £11k (ie just to emulate what you already have) …..then just take the DB pension, cos it ain’t worth the bother.

However, if you want to turn your £10k pension at 60 into £25k a year in your 60’s, £15k in your 70’s and fuck all after than the take the money ie flexibility.

My case was a bit different. A transfer to a SIPP balanced my overall asset position and allowed flexibility and most importantly it encouraged me to spend other money. Thats not meant to sound clever…being frugal was clever when I was younger but now unnecessary in my 50’s and if I carry on will be a sad inditement in my later years.

You are right. Its such a shame rules are put in place for the lowest common denominator. In the 70’s car manuals told you how to change the suspension…now they tell you not to drink the acid out of the battery.🤦🏻‍♂️

[Plan-b]

Britain on the brink

https://surplusenergyeconomics.wordpress.com/2022/07/02/234-britain-on-the-brink/

.. from the comments  "Maybe gold bugs will finally have their day. "

Another reason for gold ownership is also as a currency hedge.

[JMD]

10 hours ago, Pip321 said:

Cheers.

The Pru SIPP offers hundreds of funds but they seem so generic and I can’t see IAUP.

Still helpful though because I will have a shifty at it to compare and contrast though. 

Maybe you can buy the following etf, same as above one but priced in GBP                  https://www.hl.co.uk/shares/shares-search-results/i/ishares-v-plc-s-and-p-com-prd-gold-usd-acc-gbp

[JMD]

8 hours ago, feed said:

I don't have kids and don't expect anything from my family, so i don't have any skin in the game re IHT, but i'm sure they find a way to prevent generational wealth transfer for anyone but the super wealthy. 

And intergenerational living is pretty much the norm elsewhere in the world and was here until a couple of generations ago, 
no doubt it'll come back for most.     

But that's why I didn't describe it in terms of gaming a tax loophole. I rather think in providing the option, government is in fact seeking to encourage all families - regardless of wealth - to buy larger properties, or extend existing ones, and live in multi-generational households. Already, increasing numbers of older people, mainly middle-class ones, are choosing to sell their home and move in with their children. They see the benefits of increased family care and of boosting their disposable spending. Both those items are a benefit for government, plus it frees up a house for another family to live in.                                                                                                               Ultimately, I think there are far more positives, maybe a win-win all round. And as you point out other countries do this already, mainly it's about living within your means and that is something this country will need to address more and more.

[JMD]

7 hours ago, feed said:

SCOTUS recent ruling against the EPA could be the start of it.  The EPA is federal after all.  

Indeed. I think that is big news and will be accepted as being fair enough across most of the US, given China is still building coal power stations, and so 'why can't America'? And i think that kind of thinking will quickly cross the pond to here in UK...  Meanwhile the Pope and the rest of Europe can beatify Gretta if they so wish, plus if I was being particularly heartless I'd say - 'Let them eat ca... -rbon-credits!!' 

[Castlevania]

9 hours ago, Axeman123 said:

What happens to the residual within the scheme after that last eligible DB pensioner dies? (assuming the bolded part slashes the real value of entitlements). 

Reverts to the company. 

[jamtomorrow]

18 hours ago, SpectrumFX said:

GDX does similar, and has lower fees, but is an ETF rather than a unit trust. Unit trusts are probably safer than ETFs, but I can't quantify whether the fee difference is a fair reflection of that difference in risk

Does make you wonder how well markets prices these kinds of risk. People talk about the "wisdom of markets", but they seem positively retarded when it comes to tail risk. The recent shenanigans with ADRs is a case in point.

There's an entire generation of Contrarian Black Swans hatching at the minute all over social and the forums (if you're paying attention), all posting stuff like -

 "The West is f***ed, very important to own real hard assets, check out this or that sector *ETF*"

As if the piece of paper they don't actually get by way of "owning" some ETF will be worth anything if the West is indeed f***ed like they say.

If the West is indeed truly  f***ed, the only things that will be worth anything are deniable bearer assets (PMs, cash in some form, maybe some crypto) or assets whose ownership you are able to physically enforce through whatever power structure pertains in your locality  (gang, warlord, regime).

But whatever that power structure turns out to be, it sure as hell won't look anything like the globally-connected civil society that allows curiosities like ETFs to exist and benefit their so-called "owners".

[Pip321]

8 hours ago, JMD said:

Maybe you can buy the following etf, same as above one but priced in GBP                  https://www.hl.co.uk/shares/shares-search-results/i/ishares-v-plc-s-and-p-com-prd-gold-usd-acc-gbp

Thanks, helpful research for me…and thanks everyone for comments.

Unfortunately in the Pru SIPP whilst there are some interesting OEICs and funds there is no real direct investments in individual shares or EFTs.

I think overall the Blackrock Fund Gold is ‘okay’ for a flutter based on the really limited options in the SIPP. I have also found a JP Morgan commodities fund too so I can look at too. 

The issue is the Pru SIPP doesn’t really do ‘self investing’….rather it offers a wide variety of ‘pension type funds’. I was going to transfer it so it could be more dynamic but I think I am leaving it where it is for now. Basically it’s part of my assets and can compliment the direct investments I do in the ISA.

So at the moment I am shifting a chunk of it to cash because the current fund needs 28 days notice to switch and that’s no good in this volatile environment. Cash isn’t great but I can contra that by moving my ISA to stocks. It’s not the best long term position based on minimising fees….but short term preservation (ie over the next 12 months) is my priority at the moment and the traditional type funds aren’t great for that.

[sleepwello'nights]

20 hours ago, Funn3r said:

 

I don't need the money, in fact I would really rather not because of how much extra will go in tax, but I decided not to defer taking it in case I end up never seeing any of it at all.

Especially as the rules have been changed for the new state pension. If you defer your state pension the lump sum payment you could have received is now restricted to a short period before you started claiming it. Not the entire amount plus interest on the amount you deferred from the date you became eligible to claim that applied before.

https://www.thisismoney.co.uk/money/pensions/article-4565554/If-delay-state-pension-die-heirs-lose-out.html 

If you have put off taking your State Pension and die before you planned to start claiming it, it won’t go to waste. Not a large lump sum with generous interest  but your partner may be able to claim some of it if they meet the qualifying criteria.

Different rules applied where the state pension age was reached before 6 April 2016. Under the rules that applied then the state pension could be used to increase the weekly pension or taken as a lump sum. 

The state pension was increased by 1% for every 5 weeks it was deferred, 10.4% per annum and taken as an increased pension or a lump sum of the entire amount deferred. Under the new rules the maximum lump sum is the amount deferred for the previous 3 months.

 

 

[DurhamBorn]

14 hours ago, Axeman123 said:

A gauranteed total loss over a few years in bold, even pink diamonds had a slim theoretical chance of delivering real growth.

What happens to the residual within the scheme after that last eligible DB pensioner dies? (assuming the bolded part slashes the real value of entitlements). 

Goes to the sponsor,ie company.Many will have say 5 years in one from early in their working life,their only DB pension,now being inflated away.I did mine with some moral support from @Democorruptcy but it was a nightmare.The IFAs i used (hoodwinked) were very good with the paperwork,decent allocation if id stayed with them ,pretty much similar to a 60/40 fund with 1.8% fees for the 15 minutes of work a year,but looks like lots of work on paper.However they have zero understanding of the issues we highlighted on here.

I would think there would be good ground to take the FCA to court over making it so difficult to transfer.2.5% uplifts are pretty much just robbing the whole pension with zero ways to hedge.If you mention to an IFA though as a reason to transfer they will just say oh inflation is short term blah blah.Easy answer to transfers is there should be a course you need to take ,maybe £500 with an exam,pass it and you can transfer.

[ThoughtCriminal]

15 hours ago, Democorruptcy said:

50 years is a bit of a yawn? Even Japan's 100. Sweden 2016:

 

I've mentioned it before but I have to laugh at Swedish property prices being considered high. Stockholm is comparable to London but almost everywhere else is astoundingly cheap.

 

When I tell Swedes how much houses are here they refuse to believe me.

 

Anyone care to guess how much this 4 bed bungalow in large plot with garage and workshop is?

 

Think of it as being like a really shit pub quiz 

[Plan-b]

5 minutes ago, ThoughtCriminal said:

 

Anyone care to guess how much this 4 bed bungalow in large plot with garage and workshop is?

 

Think of it as being a really shit pub quiz 

Pure Guess - No research done ..... £175K

[ThoughtCriminal]

10 minutes ago, Plan-b said:

Pure Guess - No research done ..... £175K

I'll see if any others are bored enough to have a guess before I reveal. It is a Sunday after all lol

[Democorruptcy]

15 minutes ago, ThoughtCriminal said:

I've mentioned it before but I have to laugh at Swedish property prices being considered high. Stockholm is comparable to London but almost everywhere else is astoundingly cheap.

 

When I tell Swedes how much houses are here they refuse to believe me.

 

Anyone care to guess how much this 4 bed bungalow in large plot with garage and workshop is?

 

Think of it as being like a really shit pub quiz 

People living in London probably think our houses in the regions are astoundingly cheap, that's why they are trying to level us up. Those houses in the Swedish countryside might be cheap for a reason, it's cold/dark a lot and look what happened to Kurt Wallander, he bought one and there was a body buried in the garden.

[wherebee]

3 minutes ago, ThoughtCriminal said:

I'll see if any others are bored enough to have a guess before I reveal. It is a Sunday after all lol

150k GBP

[Chewing Grass]

Its made of wood and quite old so £80K.

[ThoughtCriminal]

4 minutes ago, Democorruptcy said:

People living in London probably think our houses in the regions are astoundingly cheap, that's why they are trying to level us up. Those houses in the Swedish countryside might be cheap for a reason, it's cold/dark a lot and look what happened to Kurt Wallander, he bought one and there was a body buried in the garden.

Some truth in that, although Sweden had been high 20s for last few days.

 

You won't care about the cold with a beautiful Swedish blonde in your bed to warm you up. 

[Castlevania]

29 minutes ago, ThoughtCriminal said:

I've mentioned it before but I have to laugh at Swedish property prices being considered high. Stockholm is comparable to London but almost everywhere else is astoundingly cheap.

 

When I tell Swedes how much houses are here they refuse to believe me.

 

Anyone care to guess how much this 4 bed bungalow in large plot with garage and workshop is?

 

Think of it as being like a really shit pub quiz 

£65k

[Democorruptcy]

Just now, ThoughtCriminal said:

Some truth in that, although Sweden had been high 20s for last few days.

 

You won't care about the cold with a beautiful Swedish blonde in your bed to warm you up. 

When I lived up in Scotland I noticed the shorter daylight hours in winter. The horse racing times highlight it. Might be 3:15pm last race in at Musselburgh but 4pm down at Exeter and I was 180 miles further North than Musselburgh.

I'll guess 499,000 SEK

[Axeman123]

33 minutes ago, ThoughtCriminal said:

Anyone care to guess how much this 4 bed bungalow in large plot with garage and workshop is?

75k euro