Pension

Discussion in 'Hull City' started by philhul, Apr 17, 2021.

  1. philhul

    philhul Well-Known Member

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    By chance is anyone on here an IFA or has used one that they could recommend? My wife has a small DB pension (CETV £55k) and I have spoken to a few and they want to charge between £3K-5k for the required approval to convert. Any help appreciated

    Thanks
     
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  2. Cambstiger

    Cambstiger Well-Known Member

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    If it's a DB pension are you really sure you want to convert? Advisors are usually against doing such things and that's maybe why the high price.
    My only advice to you would be to speak to a few (hopefully someone will recommend one) I had many meetings with 4 of them before deciding on the one I trusted most. Cost me 3% of my investment so only did £20k at the time and then realised that my choice of investments were doing far better than his, with low to medium risk, so went it alone With my DC pension pot but you cannot do that with a DB pension. Good luck.
    UTT.
     
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  3. philhul

    philhul Well-Known Member

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    Thanks Cambs....3% would be fine as its £1500. Some just try to take advantage, and yes.....take your point re the benefit of DB but this is a small one which is supported by my other DC/DB therefore we have no significant risk.
     
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  4. Posintilclosin

    Posintilclosin Well-Known Member

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    Will pm you later
     
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  5. philhul

    philhul Well-Known Member

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    :emoticon-0148-yes:
     
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  6. Gone For A Walk

    Gone For A Walk Well-Known Member

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    My understanding is that it will unfortunately cost you that sort of money to get the review you need to convert a DB. IFAs charge high for DB advice due to potential risk (come back) on them. And you need to have gone thru the hoop of an IFA review. One option is to simply take the full 25% tax free lump sum in one go then draw the balance as DB. I guess u knew all that. Hopefully posintilclosin has some good pointers for you. I'm currently fathoming what to do with my pensions with a pending early (just) retirement, I'm loathe to spend many thousands on IFAs and investment managers (who over time rarely beat the market - see earlier book recommendation). I'm pretty sure I've now got it fathomed, although I am in a fortunate position with a good legacy DB and a nice DC pot for drawdown - No idea how many other people manage in retirement!
     
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  7. Cambstiger

    Cambstiger Well-Known Member

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    It does take time and commitment but, as you say, once you've got it fathomed what the IFAs are trying to sell you, for an additional fee, it is relatively easy to go it alone. I must have had a dozen meetings, all free, to confirm that what I was planning as an early retirement was viable. Even then I went and spoke to another IFA as I was nervous about it all. It took me over three years of planning but I have now been in early retirement (62 years old) since the end of last year and even with lockdown it is so much nicer without all the stress of work. I consider myself lucky as I have a DB from an earlier employment as well as a DC plus some savings (being a prudent Yorkshireman). Not too flush but enough to be happy and content which is what I wanted.
     
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  8. Edelman

    Edelman Well-Known Member

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    I've hot 3 small pensions and have been told what I will recieve per month .
    My first 2 I will have to live till 99 to recieve the fill pot.
    The 3rd I will need to live til 108 so the drawdown is gonna be my path but dont know how to go about it
     
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  9. Citygirl

    Citygirl Well-Known Member

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    I think that par for the course re.having to live til about 100 before the pot would be empty .However the insurance company would have it invested and the pot would have doubled or trebled easily in that period between retirement and age 100 . So you die and the likelihood is they have the cash put towards their profits . Drawdown is a no brainer for most people . I have 2 money purchase type pensions , one deferred which which has grown into a good pot and the other I am stilled paying into . I hope to go down the DD route with both .
     
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  10. Edelman

    Edelman Well-Known Member

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    Its baffling to me Citygirl as it is for most .
    Whats a Money purchase one and whats a deffered one ?
     
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  11. Citygirl

    Citygirl Well-Known Member

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    Hopefully this is correct.
    Deferred is the easiest to explain I think - no more money is paid in , fund still invested so should increase .
    Money P - your money is invested usually in stocks , shares and bonds etc and should build up a pot of cash for your retirement .
    PS . I am not a financial advisor so maybe wrong but think I'm about right .
     
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  12. Edelman

    Edelman Well-Known Member

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    I was reading a share tipping service called Motley fool a year ago . They did a comparison of investing into a pension or putting money into the S&P 500 or the FTSE 350 over a 40 year period with dividend reinvested.
    The S&P trounced the lension
     
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  13. Citygirl

    Citygirl Well-Known Member

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    That could well be the case , as I have said , I am not a financial adviser .
     
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  14. Edelman

    Edelman Well-Known Member

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    I didn't think you was .
     
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  15. Chazz Rheinhold

    Chazz Rheinhold Well-Known Member

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    Sexist
     
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  16. Gone For A Walk

    Gone For A Walk Well-Known Member

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    Sorry, but that's a comparison that doesn't actually make sense without explanation of the wider context behind it. Apologies if folks know all this, but it's such an important subject (pensions, investments) and it would most likely be very foolish for someone to stop investing in a pension on reading that quote in isolation, hence me wanting to take the time to try to expand. I'm not in the industry btw.
    I know what MF are saying, and with wider understanding of what they are saying it makes sense and is true.
    But, it doesn't make sense to say in isolation that 'investing in a pension' beats xxxx. Main reason being that when you invest in a pension you get a choice of what you invest in. For example, my company scheme has 30+ options to choose from!! When i invest in my own pension, I have a choice of thousands of investments, including tracker funds that do invest in the S&P or FTSE.
    Also, there's the fact that if it's a company pension, you a) get tax relief on your contributions, and b) you get free contributions from your employer. With sensible investment choices, such a pension would hands down beat simply putting your money into the S&P or FTSE (because of the tax relief and your employers contribution).
    The basic point MF are likely making is that, over the long term, virtually NO fund manager will beat 'the market'. And they will charge you handsomely for the privilege!
    It can make a lot of sense when choosing your investments to simply go for passive index tracking funds. Invest (ideally by drip feeding in), leave it there, stop worrying about short term movements. Such funds are very low cost (compared to actively managed funds) and also by investing in them you are CERTAIN of getting your full share of long term market growth.
    If we were in the USA, investing solely in the S&P could be sufficient, but being in the UK investing solely in the FTSE is probably too parochial / lacking in global diversity. A simple passive (tracking) low cost multi fund with a heavy shares bias is likely to be absolutely fine for pretty much anybody over the medium to long term. Even Warren Buffet advises so.
    Anything else is effectively gambling and statistics show you are highly unlikely to win, Same with using investment managers, except you are paying significant money to them and for the actively managed funds they'd typically recommend, which then eats into your available share of simple stock market returns, so lessening even further your chances of 'winning'.
    Read or you tube J Bogle, Little book of common sense investing.
     
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    Last edited: Apr 18, 2021
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  17. Edelman

    Edelman Well-Known Member

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    For the record I put money into both .
    The contribution from my employer plus the tax added make it a no brainer and once you start paying via your wages you dont really miss it too much .
     
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  18. Urika Peece.

    Urika Peece. Well-Known Member

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    I took up two private ones after going self employed and putting my pension pot from a previous job in the hands of a financial adviser and following his advice. Ten years later I received a call from him saying I had to live until I was 99 to get back the cash i had already paid in and his advice was to stop paying in because the policies were 'not performing'. So I did and read the small print on the policies for the first time, and it was small, the very last line on a document three inches thick. It said commission of 99% will be paid to the agent for the first ten years of contributions.
    The income from these two private pensions combined wouldn't buy me a season ticket for City.
    If you have some spare cash put it into bricks and mortar.
    .
     
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    Last edited: Apr 19, 2021
  19. originallambrettaman

    originallambrettaman Mod Moderator
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    I'm hopeless with these things, I've got three that I've paid a significant amount of cash into, but the income at retirement still seems fairly pitiful and I find it hard to motivate myself to sort it out, despite knowing I should.
     
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  20. balkan tiger

    balkan tiger Well-Known Member

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    That's what fund managers, investment banker and the like rely on.

    Not a pension but my investment fund managed to go down 10% last year, I would have have done better gambling on the horses.
     
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