UKBouldering.com

Pensions (Read 17543 times)

Johnny Brown

Offline
  • *****
  • forum hero
  • Posts: 11437
  • Karma: +690/-22
#25 Re: Pensions
January 13, 2017, 02:08:47 pm
Just had a letter from The Pensions Regulator saying we need to set up a pensions scheme. As directors, the employees are ourselves. Any idea where to start, or who might be trustworthy to help choose?

Tommy

Offline
  • ****
  • junky
  • Posts: 814
  • Karma: +97/-1
#26 Re: Pensions
January 13, 2017, 02:47:05 pm
I predict a PPI timebomb as thousands of us get bombarded by shit firms selling us shit pensions we never wanted anyway. I'm sticking my head in the sand for the moment and will opt for something that looks incredibly boring when I'm forced to.


Ru

Offline
  • *****
  • Global Moderator
  • forum hero
  • Posts: 1972
  • Karma: +120/-0
#27 Re: Pensions
January 13, 2017, 03:19:50 pm
Pensions are generally worthwhile if you are a higher rate tax payer or your employer makes contributions.

Paying down a mortgage is worthwhile as part of your strategy - essentially it's a 3% (or whatever your mortgage rate is) fixed rate investment.

Whilst I agree that investment funds can have high costs, many still do much better than the whole market even after costs. Funds are generally focussed on an investment area - e.g. UK companies, American companies, Smaller companies, Emerging Markets etc. This means that when one of those areas is doing badly, so will the fund, generally speaking, no matter how good the manager. Therefore you need to invest in a range of funds.

The most sound general advice is to spread your bets. Use a pension if your employer will match inputs, pay down some of your mortgage. Put some in a shares ISA so that you have an accessible cash fund if you need it.

slackline

Offline
  • *****
  • forum hero
  • Posts: 18863
  • Karma: +633/-26
    • Sheffield Boulder
#28 Re: Pensions
January 13, 2017, 03:25:21 pm
Put some in a shares ISA so that you have an accessible cash fund if you need it.

If you know you won't need it and are young enough (or are a first time buyer) the forthcoming LISAs seem a good deal to me.  I'll be taking one out in April as I qualify (just).

Bubba

Offline
  • *****
  • Global Moderator
  • forum hero
  • Posts: 15367
  • Karma: +286/-6
#29 Re: Pensions
January 13, 2017, 07:12:26 pm
Just invest in Bitcoin. What could possibly go wrong ;)

Tommy

Offline
  • ****
  • junky
  • Posts: 814
  • Karma: +97/-1
#30 Re: Pensions
January 13, 2017, 07:13:22 pm
Slackers you're quite right. No brainier that one.

It is just a form of helicopter money though... just a bit back door. I bet the public won't see it that way though and hence won't make a fuss about yet more QE.

Johnny Brown

Offline
  • *****
  • forum hero
  • Posts: 11437
  • Karma: +690/-22
#31 Re: Pensions
January 13, 2017, 08:09:37 pm
Yes the LISA sounds like a great deal, unfortunately it's not going to get the man off my back.

chris j

Offline
  • ****
  • forum abuser
  • Posts: 589
  • Karma: +19/-1
#32 Re: Pensions
January 13, 2017, 09:56:27 pm
Just had a letter from The Pensions Regulator saying we need to set up a pensions scheme. As directors, the employees are ourselves. Any idea where to start, or who might be trustworthy to help choose?

I presume as you're talking about directors, you're a limited company? If the only employees are directors, the company should be able to opt out from the workplace pension scheme (presuming you don't want to set up a workplace pension?).

This is what my accountant sent me last summer:

"As things currently stand you are under a legal obligation to set up an auto-enrolment scheme by your specified staging date. It is possible for you to apply for exemption if you meet one of the following two conditions:

‘The only people working for the company are directors and none of them has an employment contract’

‘The only people working for the company are directors and only one of them has an employment contract’ "

The accountant then dealt with the pensions regulator and I haven't heard from them again. Don't know if this is any help?

Catcheemonkey

Offline
  • **
  • addict
  • Posts: 124
  • Karma: +10/-0
#33 Re: Pensions
January 14, 2017, 06:57:36 am
You'll have received this letter as part of the government's pension Auto-Enrolment roll out. I've  set up a couple of these schemes and it's pretty easy for small companies to remain compliant: employer contribution rates are low (initially a minimum of 1% of salary) and you can use the government NEST scheme if you don't want the hassle or expense of selecting another provider.

Most importantly, if the Directors / employees aren't interested then they can immediately un-enrol. Depending on the set-up of the business, you may have to register an auto-enrolment scheme before you can do this. Best to take some professional advice if this is the approach you plan to take.


Sent from my iPhone using Tapatalk

Catcheemonkey

Offline
  • **
  • addict
  • Posts: 124
  • Karma: +10/-0
#34 Re: Pensions
January 14, 2017, 07:12:47 am
Also - I should have said, if the directors are the only employees and they don't have contracts and aren't paid through PAYE then you won't need to enrol - see  www.thepensionsregulator.gov.uk/en/employers/what-if-i-dont-have-any-staff.aspx


Sent from my iPhone using Tapatalk

Offwidth

Offline
  • *****
  • forum hero
  • Posts: 1767
  • Karma: +57/-13
    • Offwidth
#35 Re: Pensions
January 14, 2017, 04:36:41 pm

Funds have many hidden costs and disadvantages and apart from a few notable exceptions don't do well decade in, decade out. Fund Managers get lucky and unlucky and come and go. Picking a fund on the basis of its performance over the last five years is not a good idea. A low cost tracker with dividends reinvested would be a more transparent option than an active fund. With a low cost tracker the known, known of costs will be minimised.

I'm not so sure about that. We have a local not for profit broker whos fairly broad recommendations I've followed with very little adjustment (they give cheap access to Cofunds and Fidelity). My investments have worked out pretty well despite the 2008 crash. Partly I think people get ripped off on fees and quality unless they shop around and partly that people forget dividend payments make a significant difference over the years. Some trackers are a rip off as well if you don't get the dividident income.

My house has been a poorer investment but cheap in repairs and climbing time used up, so Im happy.

My work pension has been good but would be a lot worse if I was 5 years younger.

Its like the students I teach are unaware how badly their chances have declined as they head to professional roles. They have a 50k+ debt I had a grant, free fees and a graduate apprentice linked vacation job (a scheme removed by Maggie)

Offwidth

Offline
  • *****
  • forum hero
  • Posts: 1767
  • Karma: +57/-13
    • Offwidth
#36 Re: Pensions
January 14, 2017, 04:42:44 pm
Just invest in Bitcoin. What could possibly go wrong ;)

If I'd listened to friends when I first heard that I'd be worth many millions now. I had the spare cash but my sense of  risks and prospects turned out very wrong.

GraemeA

Offline
  • *****
  • forum hero
  • Posts: 1875
  • Karma: +80/-6
  • FTM
    • The Works, it's the Bollocks
#37 Re: Pensions
January 15, 2017, 08:26:09 pm
Also - I should have said, if the directors are the only employees and they don't have contracts and aren't paid through PAYE then you won't need to enrol - see  www.thepensionsregulator.gov.uk/en/employers/what-if-i-dont-have-any-staff.aspx


Sent from my iPhone using Tapatalk

I assume that the directors of JB's company get paid the amazing amount of £11,000 PAYE and the rest on dividend. I also assume that they pay higher rate tax. In which case it is worth enrolling as there is a slight tax benefit (higher rate relief on top of the basic rate relief) plus the employer's contributions are deductible from your corp tax (I think). But it's pretty low return for quite a bit of hassle plus if you screw up you get jumped on by the Regulator.

We used NEST at the Works but we have 20 ish employees so had to do it anyway, so me, Sam and Percy enrolled. But not sure whether the hassle is worth it for you guys.

The NEST Pension seems like a fairly conservative fund although they do have various options if you want to be a bit adventurous, including an Ethical Fund although as Nestle is in that portfolio I would question how ethical it is in reality.


Johnny Brown

Offline
  • *****
  • forum hero
  • Posts: 11437
  • Karma: +690/-22
#38 Re: Pensions
January 16, 2017, 11:27:25 am
Thanks guys, all helpful advice. I don't have any pension/ savings so this is probably a good reason to start.

Quote
I also assume that they pay higher rate tax

AHAHAHAHAHA. In my dreams. In the wrong game obviously.

GraemeA

Offline
  • *****
  • forum hero
  • Posts: 1875
  • Karma: +80/-6
  • FTM
    • The Works, it's the Bollocks
#39 Re: Pensions
January 17, 2017, 03:32:23 pm
Thanks guys, all helpful advice. I don't have any pension/ savings so this is probably a good reason to start.

Quote
I also assume that they pay higher rate tax

AHAHAHAHAHA. In my dreams. In the wrong game obviously.

I was basing my assumption of the cost of Gibb's T5  :whistle:

Johnny Brown

Offline
  • *****
  • forum hero
  • Posts: 11437
  • Karma: +690/-22
#40 Re: Pensions
January 17, 2017, 06:57:26 pm
I'm no type surprised! It's a good job I do the accounts or I'd be convinced he was rinsing me.

Johnny Brown

Offline
  • *****
  • forum hero
  • Posts: 11437
  • Karma: +690/-22
#41 Re: Pensions
January 31, 2019, 04:12:04 pm
So about 11 months ago I finally started a pension with a lump sum plus monthly payments since. Performance has been disappointing, presumably this is the same for all but without any longer term gains behind me it feels like pissing the serious cash I've ever had straight down the drain. Looking like I may have the potential to put another lump sum in before year end, but that's not hugely attractive given the short term outlook.

Any better ideas? Or soothing words of long term wisdom?

SA Chris

Offline
  • *****
  • forum hero
  • Posts: 29221
  • Karma: +630/-11
    • http://groups.msn.com/ChrisClix
#42 Re: Pensions
January 31, 2019, 04:19:41 pm
Buy premium bonds?

T_B

Offline
  • *****
  • forum hero
  • Posts: 3078
  • Karma: +149/-5
#43 Re: Pensions
January 31, 2019, 04:21:13 pm
Tax free savings innit. Retire. Spend lump sum on gite in Font ;D

Ru

Offline
  • *****
  • Global Moderator
  • forum hero
  • Posts: 1972
  • Karma: +120/-0
#44 Re: Pensions
January 31, 2019, 04:28:44 pm
They always say never try and time the market. That said, right now we do seem on the verge of potentially a big downturn. The risk is that the downturn will come in a year or so and there might be a rally before then. So you might sit it out for a year and miss all the upside, decide that the risk of a downturn has been overstated, invest and then get hit. Or never invest at all.

The best way to mitigate between the two is not invest in big lumps, but rather continue with monthly payments. That way you keep buying as the price drops but don't don't gain as much when they go up. You could sit on the cash and increase your monthly payments or stick a load in the mortgage.

Johnny Brown

Offline
  • *****
  • forum hero
  • Posts: 11437
  • Karma: +690/-22
#45 Re: Pensions
January 31, 2019, 04:37:49 pm
Thanks, that's useful. I remember Coinbase giving me the same advice when I bought my first bitcoin...

At the moment the money exists as company profit rather than pay. So paying a lump sum into the pension is tax-free for me and also reduces the company tax liability.

abarro81

Offline
  • *****
  • forum hero
  • Posts: 4289
  • Karma: +341/-25
#46 Re: Pensions
January 31, 2019, 04:44:40 pm
I know nothing about finance, but I'd always thought that part of the safety of pensions was that they're drip-fed rather than fed by lump sums...
- If the stock market does well then your initial money grows so you're ok.
- If the stock market does badly for a period then the money you put in at that point can buy a lot of shares, so as long as it recovers at some point you're then ok.
So effectively you buy high and low, and sell at point X, thus minimising the risk of being in a "buy high sell low" disaster scenario...

Edit: what Ru said innit



36chambers

Offline
  • *****
  • forum hero
  • Posts: 1678
  • Karma: +154/-4
#47 Re: Pensions
January 31, 2019, 05:21:57 pm
having a quick read up on "dollar cost averaging" might help :)

shark

Offline
  • *****
  • Administrator
  • forum hero
  • Posts: 8697
  • Karma: +625/-17
  • insect overlord #1
#48 Re: Pensions
January 31, 2019, 09:29:15 pm
I’d just invest the sum and don’t agonise about it given your investment timescales.

Pound cost averaging just seems to me like a pitch to get punters on a direct debit and yes I understand the theory.

The time to invest is now - it always has been and always will be.

dpb

Offline
  • **
  • addict
  • Posts: 144
  • Karma: +5/-0
#49 Re: Pensions
February 01, 2019, 07:45:23 am
https://monevator.com/lump-sum-investing-versus-drip-feeding/ monevator article on lump sum investing Vs drip feed/cost averaging.

 

SimplePortal 2.3.7 © 2008-2024, SimplePortal