Pension funding for Mr average

Pension funding for Mr average

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It has been suggested to me that the break-even cutoff "pot value" to make private pension funding worthwhile is about £150K. By this I mean that if an individual reckons that he is unable to put away £150K in his lifetime into a pension fund then he would be better off not putting anything at all into a pension scheme and rely instead on the state to bail him out, and that any pension funding below that limit would leave him actually worse off. I have not seen any calculations to support this suggestion, and I wonder whether it is a familiar concept to others, whether the conclusion is broadly correct, and if the calculations are available online somewhere?

Clint Westwood

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By NeilW
10th Nov 2006 09:23

Basic rate
Pensions are IMHO unlikely to be worth the effort if you are only getting basic rate tax relief on them. The rewards don't justify the restrictions.

The only reason I can see for using them at low levels is for bankruptcy protection and for clients who can't keep their hands of their savings.

Just a personal view.

NeilW

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By tomtrainer
10th Nov 2006 19:16

Mark Gauden
Welcome to capitalism Mark.

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By User deleted
10th Nov 2006 13:44

Remove the life assurance industry
The life insurance industry should exist to provide worthwhile products to investors.

Instead it seems to exist to keep it selfish self in business.

What investors should be told is the following phrase:-

"You [the investor] take the risk, we [the life insurance industry] take the profits (even if there are none)" The only guarantee with pensions is that the life insurer will do very well thank you out of charges and commissions.

With regard to pensions I do believe there IS a need for these, but remove the life industry from the equation.

Instead let Building Societies and Banks offer a "Pension Cash Account" - zero charges, and say 5% interest (= more than inflation, what more can we want - stock market gambling via the life industry?), no transfer fees. No overpaid investment advisors. Interest to be tax-free unless capital is withdrawn before state retirement age. If mini cash ISAs can work, why can't this - maybe the answer is lobbying and possible uproar from the life assurance industry ?

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By AnonymousUser
10th Nov 2006 19:01

The Pension Racket
Regular readers may remember that John Sartoris exposed the Pensions racket quite comprehensively nearly two years ago here:


The Tax and Pensions Racket


when the absurdly complicated pension rules in FA 2004 were triggered.

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By tomtrainer
13th Nov 2006 15:30

John Sartoris's Post
I could not make that link work, but this one does
The Tax and Pensions Racket

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