25-10-2015, 01:05 PM
12
Re: Pension Topup
Well, there will be no surprise for most of you when I make the statement that . . . . pensions are a scam!In the fullness of time I believe pensions will turn out to be the next great financial scam of the ilk of the past endowment mortgage misselling and then the PPI misselling and so on.
I stopped putting money into my pension some years ago when I woke up and realised that every pound I put in there, I will never ever see again.
I now consider pensions like a letter box to some financial institution. Every month people take their hard earned cash and post it through that letter box, which is nothing more than a black hole.
Once posted, YOU CAN NEVER GET THAT MONEY BACK.
Please understand this.
You can not change your mind and ask for all that cash back. Every single note you post through that "letter box" is gone, forever. You will never see it again.
Of course the idea/intention is that at some point in the future you WILL get some money back in the form of a regular pension but therein lies the minefield.
What a pension really is, is YOU giving YOUR money to SOMEONE ELSE to speculate/invest/gamble with.
There are no guarantees. If they blow your money away then it's tough cookie. Of course when that happens it won't be presented like that. It will be presented as a "Global Financial Crisis". It will be masterminded such that everyone knows about the financial disaster, and everyone understands about the financial disaster, but it won't help one bit. The money will be long gone into someone else's pockets.
What happens in reality is these pension trustees/institutions PLAY the stock markets with your money. They make lots of profit from doing that, but they don't give you those profits, they just give you a pittance.
An example. Say a stock/share goes up and down 3 times in a year. Let's call it SuperBank shares. At the start of the year the share price of SuperBank shares is say £3.00.
The pension trustees invest money in those shares buying at £3.00.
In April the shares rise to £4.00 so the trustees sell making a nice £1 profit (33%) per share bought. Then the shares fall again back to £3.00 by July. The trustees buy more shares. In Oct they rise again to say £3.75. The trustees sell again making another profit. Then by Dec the shares fall back a litte to £3.20
Now review what has happened. Using YOUR money the trustees bought and sold shares twice making good profits each time. However in terms of YOUR pension fund, they will imo review this yearly and so will conclude that at the start of the year the shares were £3 and at the end of the year they were £3.20 so they have made just 20p profit per share or approx 6%, yet by using YOUR money, the trustees made some 25-33% profits throughout the year.
The whole thing is a farce imo. They are gambling with our money and if they win, they keep the lion's share of the profits and if they lose well then it's our pension pot that suffers. WE can not win.
This is just my opinion and whilst the specifics may not be entirely accurate I am convinced that in one way or another this is the principle being played out.
That being the case, I transferred one of my pensions about 3-4 years ago into a private SIPP. Essentially this means I get that lump sum of money NOW in a tradeable pension account and can invest it any time anywhere MYSELF.
Thus just like those trustees, I can now buy and sell shares with my pension pot multiple times per year. I can buy/sell shares every hour of every day if I wish. It is now totally in my hands what profit (if any) is made and any profit that IS made, is all mine.
I recommend people thoroughly research pensions because for me they lack some specific things, namely:
1. They do not guarantee any return no matter how much you pay in for all those years.
2. They rarely allow you to choose where it is invested
3. They sure as hell aren't giving YOU all the lucrative profits they make from YOUR money
If all this wasn't enough they are of course finding more and more ways to ensure you pop your cloggs as early as possible !
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