Reply to: Pension Performance

[SimonMac]

Have had a few pensions in my time. Sorted them all out the other year and stuck them into a HL SIPP. Very good.

Not contributed into it in the last year or so though. Been thinking about chucking a lump sum in recently before the end of the year but I might not bother.

At the moment, income split dividends with the dear wife, so neither of us exceed 40% so all I'm saving on pension contribution is the 20%.

Must admit I wonder if its worth bothering.

I would normally say yes it is but I am being thraped after the last 5 days

[GB9]

I will contribute to a pension while I still get higher rate tax relief. Once that goes (and surely it will?) I will go the ISA route.

[psychocandy]

Have had a few pensions in my time. Sorted them all out the other year and stuck them into a HL SIPP. Very good.

Not contributed into it in the last year or so though. Been thinking about chucking a lump sum in recently before the end of the year but I might not bother.

At the moment, income split dividends with the dear wife, so neither of us exceed 40% so all I'm saving on pension contribution is the 20%.

Must admit I wonder if its worth bothering.

[Lockhouse]

What's to stop a future Government from saying "OK you lot, from now on we're going to start taxing ISA income?"

[Robinho]

Gold still acts like a currency as in there are peaks and troughs based upon the confidence of the market.

It's only going up though long term, the BoE has printed far too much money for anything else to happen. Same in the US.

[Doggy Styles]

It's only going to get higher.

escape is right, if we didn't have fiat currencies, saving for pensions wouldn't be an issue.

I only ask because it reached a peak about a year ago, which was over that line, then dropped back.

If someone had bought at that peak, they could be quids out for a few years, which might take them beyond retirement, making it a bad move.

Especially if welsh alchemists flood the market with the stuff...

[Robinho]

A good idea while Gordon was selling it knock-down prices.

Where is it now, above or below the long-term trend line?

It's only going to get higher.

escape is right, if we didn't have fiat currencies, saving for pensions wouldn't be an issue.

[Doggy Styles]

Put it all in gold. Then you avoid fiat currency halving in value every 10 years.

A good idea while Gordon was selling it knock-down prices.

Where is it now, above or below the long-term trend line?

[escapeUK]

Put it all in gold. Then you avoid fiat currency halving in value every 10 years.

[LGDT]

Also remember that you also get a decent CGT allowance. So even if you've maxed out your ISAs you can still plough money into unit trusts, investment trusts, shares and skim off the capital growth up to your limit (double if you have a partner investing with you).

OK any divi income that you want to reinvest goes against your personal allowance but I've never found this to be particularly onerous in 25 years of investing.

Pensions for contractors are a mugs game. Expensive, inflexible and subject to the whim of the government of the day. Add to that the appallingly low annuity rate you can expect or the limits on drawdown - you might as well have left your money in a savings account at 2% IMO.

[SimonMac]

Since I've been contracting I've been putting 10% of my gross income into my pension. Plus 10 years of permiedom with 15% contributions - (7.5 me, 7.5 employer). It's all worth squat.

Are you controlling this yourself? I have a SIPP with Hargreaves Lansdown and with a little careful research I am doing quite well, most pensions its the fees that cripple you so if you can avoid them do so!

[Gibbon]

If I'm paying a decent amount into an ISA, that's surely going to push me into the higher tax bracket, no?

if you mean you have to take extra money out to reach the ISA limits and this puts you over the threshold then yes.

But you have to think about what you want when retirement comes and maybe you take the hit now when you have shed loads coming in, rather later when there's SFA you can do. Also remember with an annuity after so many years (5 I think) if you die the insurance company keeps the lot, whereas ISAs or other non pension related wealth will be there for your inheritors should you so wish.

[Malcolm Buggeridge]

Pensions are tax free in and taxed on the way out.

ISA's are taxed income in and tax free (gains and income) out.

Unless you are paying higher rate income tax now and will be paying lower rate income tax when you retire, what's the point of the pension? And if you are paying higher rate income tax now, you are doing something wrong as a director anyway.

If I'm paying a decent amount into an ISA, that's surely going to push me into the higher tax bracket, no?

[mudskipper]

Since I've been contracting I've been putting 10% of my gross income into my pension. Plus 10 years of permiedom with 15% contributions - (7.5 me, 7.5 employer). It's all worth squat.

[Sausage Surprise]

For your pension provider, yes.

My pension is averaging 3.45% growth PER MONTH, maybe you are just doing it wrong.

Ditto + .....my annual statement was very surprising.