Pensions- Do you really understand them!.

  spuds 12:35 23 Aug 2007

Over the past couple of months I have been involved with sorting out some pensions. Some facts appeared in the process, of which you may find perhaps interesting.

We are all being told that you should prepare for old age and secure a pension so you can enjoy old age, and not be a burden to anyone or anything. But have you realised that on the day of reckoning that all inspiring safeguard may not be there.

Do you realise that your companies pension fund may not be as rock solid as to what you thought, or was explained to you at the beginning. You may also have an 'old' frozen pension fund policy that was with another company, and 'as been lost' with changeover from manual records to a computerised system ( there are many millions of pounds held by pension fund providers, due to this fact, and its their decision's as to what happens to this money in the long term). You may or are being taxed on a pension by the administrators of the fund, when you should not have been (only reclaimable up to 6 years) . Many people do not have the faintest idea about pensions ( I was one of them),because of the legalities and confusions and you may well totally rely on 'the system', hoping that all ends well.

My advice as a layperson,and I stress that point, is for you to conduct a investigation regarding your pension before it is to late, and that day of retirement is not the pot of gold it was meant to be. You may think that you are pension savvy, possibly after reading a few leaflets, or a short discussion with someone who may seem more knowledgeable than you. But do not rely solely on this for information.Make sure you get up to date facts and information.

Good free advice can be obtained from the governments own pension advice and tracking schemes click here , FSA click here , Age Concern and similar organisations.

  GANDALF <|:-)> 13:42 23 Aug 2007

When I was 18 I was looking at pensions and they all claimed to pay out amazing amounts. I then looked at people who were retiring when I was 18, put 2+2 together and decided that they were well dodgy...OK to put what you could easily afford but not to strap yourself. Rather surprisingly, the best pension for returns against investment, was the Government pension and we know the trouble that is in.


  hereford456 13:54 23 Aug 2007

I used a friend who's an IFA & just had to pay a small flat fee.
Hence my first few years were not spent paying commission on the policy.
I can put as much or as little as I like in it each month.
But will probably still have to work until I’m past 65.

  Stuartli 13:58 23 Aug 2007

And, of course, we are all well aware why pensions went from being a valuable asset for retirement to a disaster area for many people.

I'm lucky as I retired before the dreaded annual £5bn a year robbery from pension funds, so I got the promised pension and annual percentage increases from my company pension scheme.

But others I worked with and who retired later in life are now feeling the pinch.

Another factor that may well have affected many people's pensions was the takeover of some companies merely because of the strength of their pension funds. In some cases they were worth more than the cost of the takeover...

  oresome 16:04 23 Aug 2007

Further to Spuds comments, I believe that anyone with money invested a pension scheme should be getting annual statements. If you're not, now's the time to start chasing it up!

A common problem is that people move address and forget to advise the pension administrators of previous employers.

  Jak_1 16:54 23 Aug 2007

Glad I have my Armed Forces Pension, one of the safest pensions around and is index linked. Whatever the Forces pay rise is each year the pension goes up by the same percent. Getting mine now :)

  spuds 17:08 23 Aug 2007

Jak_1... I hope you are not a Gurkha :O(

oresome... Moving, mergers and not informing both by individuals and pension companies is one of the problems that needs re-addressing. My findings was one of when the industry went over to computer systems, a number of old policies didn't get added.This same error also applies to the banking industry.

  Monoux 17:19 23 Aug 2007

I'm not sure how true this is but I heard a few years ago that the DHSS as it then was 'lost' thousands of contribution records when they were moved to a new computer system. I was advised at that time that it would pay to request a pension projection statement to make sure all was OK with your own records. If you do this well before retirement it gives you time to resolve any problems.

  realist 17:40 23 Aug 2007

On leaving school I was at a loss to understand why anyone would choose to work other than in the public sector where the pension provision was so much better.
Apart from a year out with BHP Billiton (as it now is) in Australia, I spent all my time in the UK Public Sector and retired on a full index-linked pension at 52.

  oresome 17:48 23 Aug 2007

realist, both you and GANDALF <|:-)> are exceptional.

Pensions are the last thing on most teenagers mind!

  Stuartli 18:00 23 Aug 2007

True. But it's mugs like me who worked (working) in the real world of creating the nation's wealth who have to keep stumping up to pay for it.

That's besides having had to pay for my own...:-(

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