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Posts: 883
A huge advantage of running your own SIPP pension is you can choose individual shares yourself.
Another huge plus is you don’t pay any tax on the dividends you receive.
The trick to make vast amounts of money from a small original pension pot investment, over time , is growing dividends.
Hence I am so keen on Triad Group Plc.
The dividend was doubled at the interim and again at the finals last year.
Next week the 2022 interim results may be published, with yet another increase possibly on the cards.
Most companies take 3 -7 years to double their dividends. The shorter the time period ,the far better returns are ,on not only the dividends, but also the hopeful share price increase.
The stock is already in the high yield bracket at over 5%
Posts: 883
Just under two thirds (63%) of UK savers aged 35 to 44 have not consolidated their pensions, according to a new survey published by Wealthify.
The survey of 2,000 UK adults found that the number of savers who have unconsolidated pension pots increased to 71% for those adults aged between 45 and 54 years old.
The findings come ahead of National Pension Tracing Day this Sunday (30 October), as well as the Pensions and Lifetime Savings Association's National Pension Awareness Week, which is set to take place next week.
The survey also found that younger savers were more likely to be actively engaged with their pensions as a result of the cost of living crisis, with just over two fifths of 18 to 34 year olds prioritising saving into a pension.
Chief executive Andy Russell said: "Our research has shown that those approaching retirement age are not consolidating and are likely to be the people with the most pots scattered after years of working."
"It is important that savers who have multiple pensions lying around consider consolidating them. This not only allows them to play a more active role in the management of that pot, and have a clearer understanding of their investment returns, but could also reduce the amount they have to pay in ongoing fees
Posts: 883
I personal doubt lumping all your pension pots together from various previous jobs, could possibly be cost effective.
For a starters you have to get professional advice that costs serious money.
The chances are the saver will be old, and have far less time to recover those costs.
Oddly it also goes against all the financial advisors remit to spread risk. !
Of course, you could put all your proceeds into your own personal SIPP pension.
That however in my view needs to be done at a far younger age and the nurtured over a lifetime by investing in super high growth companies, that pay dividends along the way.
Posts: 883
Can a saver cash in their pension early?
The short answer is yes, it is possible to cash in a part of your private pension, but it will have an impact on your finances further down the line. According to experts PensionBee, it's generally not possible to access a pension before the age of 55, increasing to the age of 57 in 2028 - but it can be done.
"There are only a few instances where savers can release their pension before the age of 55," PensionBee say.
These are "extreme ill health or terminal illness". They add: "No reputable pension provider will approve an early withdrawal unless these conditions are met."
If none of these circumstances apply, HMRC may view the early pension release as unauthorised, imposing a 55 per cent tax charge on the amount withdrawn.
Posts: 883
Building up an ISA fund has huge advantages over a SIPP pension in many ways.
The first being instant access at any age.
Perhaps try and invest a lump sum in a SIPP and ISA at a young age , then purchase potential super growth stocks paying dividends in both.
Posts: 883
This explains why your average pension pot , managed by city fund managers is likely to be REDUCED, over the next two years.
FTSE 100 forecast for 2022 and beyond
JP Morgan’s FTSE 100 predictions conducted on 26 September saw the UK benchmark index trading at 8,150 points in December.
In its FTSE 100 analysis, the investment bank saw the index companies’ earnings per share (EPS) growth falling from 98.2% in 2021 to 22.5% in 2022. The EPS growth was seen slipping to negative territory of -0.4% in 2023 and recovering to 0.8% in 2024.
If this forecast is correct, I believe its around the average , then why on earth would you want to trust your pension savings with the average pension fund manager. ?
It’s simply not good enough, those in charge of your funds should be seeking returns far, far in excess JUST TO KEEP INFLATION AT BAY.
In my personal opinion any stock in the fund managers portfolio must have a realistic chance of at a minimum 20% growth.
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Peter Lynch may have been the greatest mutual fund manager in history. His astounding 13-year record at the helm of the flagship Fidelity Magellan Fund guaranteed him a permanent spot in the money management hall of fame. Lynch retired in 1990 at age 46. These are his principles for the valuation of shares.
Price-to-Earnings Ratio
In his book One Up on Wall Street, Lynch gives a simple, straightforward explanation about one of his preferred metrics for determining a high-level valuation of a firm's investment prospect. He calculates a given stock's price-to-earnings (P/E) ratio and interprets the results as follows:
The P/E ratio of any company that's fairly priced will equal its growth rate. . . . If the P/E of Coca-Cola is 15, you'd expect the company to be growing at about 15 percent a year, etc. But if the P/E ratio is less than the growth rate, you may have found yourself a bargain. A company, say, with a growth rate of 12 percent a year...and a P/E ratio of 6 is a very attractive prospect. On the other hand, a company with a growth rate of 6 percent a year and a P/E ratio of 12 is an unattractive prospect and headed for a comedown. . . . In general, a P/E ratio that's half the growth rate is very positive, and one that's twice the growth rate is very negative.1
Posts: 883
Peter Lynch Is in my personal opinion is spot on.
Any company growing revenues extremely fast should be rewarded with a corresponding high P E Ratio.
What tends to happen is a companies shares get re rated.
This is an amazing experience if your a shareholder having purchased the stock , prior to the re rating.
In essence the market pushes the value of your stock up , Often out of the blue ,by what can be multiples of the share price.
This is caused by other investors buying in the stock, because it’s far more attractive than everything else on the market.
They want that same super fast growth.
Posts: 883
I have just visited “Pension Bee” that company that splashes working people with massive smiles all over the TV from 6PM.
The idea being, you are encouraged to move your pension pot over to them so you can keep an eye on it.
They offer various funds and strategies.
High
Medium
Low
One can tap on the fact sheet for up to date plan valuations.
They are Absolutely Horrible.:::
Let’s start with low risk
That’s returned your money intact ( inflation at 10% is killing your investment)
Medium risk puts you down ITRO 17% ( inflation at 10%) real loss 27%
High risk a staggering 35% ( inflation at 10%) a real loss of just short of HALF your pension pot. !!
That’s what you get when you trust, and invest ,with the so called pension experts.
Posts: 883
Pension Awareness Week: Where is people's money invested?
Money should be used in line with values, experts say
Julia Bahr
31 October 2022
• 1 min read
Stewart: "A good way of getting people to pay attention to their pension is to help them understand they have more than just money invested."
Image: Stewart: "A good way of getting people to pay attention to their pension is to help them understand they have more than just money invested."
It is vital that awareness is raised around where pension savers’ monies are invested and how they understand that and the impact it can have, according to Tumelo.
In light of Pension Awareness Week - starting today (31 October) - fintech firm Tumelo considered Hargreaves Lansdown research from 2021 which showed that 34% of pension savers do not know their retirement savings are invested in the stock market.
The average defined contribution (DC) scheme default fund was around 75% invested in the stock market, with the bulk of that money (63.84% of the total fund) invested in overseas shares and 11.85% invested in UK shares, the research said.
Tumelo has now analysed the holdings of 38 schemes' default DC funds and identified the following
companies as the top ten most common holdings across those funds:
• Land Securities Group
• Tesla
• Procter and Gamble
• Pennon Group
• Burberry Group
• Nike
• Johnson Matthey
• Sony
• Experian
• FedEx
Posts: 883
Top companies that all the funds have put your pension funds in
1 Land securities
2 Tesla
Unbelievable, have these fund managers not noticed, the brick walls facing the most popular selection .??
A 25 year leases disappeared nearly as long ago .
Interest rates are going up
Workers are not using offices space above 30%
Next up is Tesla.
Have they not done even basic research on its owner ?
Posts: 883
Brits are not retirement ready
31/10/2022
by Hannah Gurga
Ten years on from the introduction of automatic enrolment, Director General of the ABI Hannah Gurga reflects on the significant impact that it’s had and the challenges that remain.
While we have reason to be proud of what has been achieved in the past ten years,
It is perhaps little surprise then that around 10 million people are saving too little. When auto-enrolment was introduced, it was intended to ensure people had at least half of an adequate pension income. The rest, it was hoped, would come from voluntary, personal savings. Those savings have not materialised.
It is therefore essential that action is taken now to secure people’s futures.
Within the next ten years, we want to see an increase in auto-enrolment pension contributions, with savers given the option to opt-up or opt-down from a new, but voluntary, higher rate.
Those who are underserved by the current system also need help. A secure retirement should not be the preserve of those who are wealthier and in secure jobs. Over the past twenty years, the proportion of self-employed people with a pension has halved, now sitting at just 16%.
Albert Einstein is said to have quipped that the most powerful force in the universe is compound interest. While this may not have been in all seriousness, it tells an important truth. The more you save, and the earlier you save it, the more you will have in the future. £100 saved with 5% interest at the age of 20 increases to £900 by the time you are 65. Start saving ten years later, and the growth of your £100 is reduced, reaching just £560.
This should perhaps not surprise us. More than half of those accessing their pensions are doing so without any professional advice. It is welcome news that the Financial Conduct Authority is now reviewing the boundary between financial advice and guidance. Financial advisers have a key role to play in helping consumers get the best out of their retirement. But, as most people do not receive advice, it is important to explore how firms can go further to help people throughout their lives, from getting started investing to accessing their pensions.
Posts: 883
Absolutely nothing about improving pension returns, just more of the same :
Put more money in
Use an advisor.
My view
Put a tiny amount in when your young ,selecting super growth stocks, paying dividends.
Posts: 883
News Events Industry DataTools and Resources Members
Home / News / Blogs / 2022 / 11
How can you engage younger workers to start saving for a pension?
01/11/2022
Pensions are not usually at the forefront of a young worker’s mind. As a 19-year-old I have certainly never thought about my own. So why should young workers start saving into a pension, and why now?
Business Items on Table in suburban cottage garden view
by Grace Buckley
Early engagement with one’s pension makes accruing sufficient funds significantly easier. By saving from a young age, people can benefit from compound interest, meaning that every extra pound saved in your 20s can be worth four times that amount by the time you retire. Delaying long-term saving is costly: a 31-year-old would need to contribute 90% more than a 21-year-old to accrue the same sized pension pot. The later you leave to save, the less time it has to grow
Posts: 883
Pension acronyms perplex the majority of UK savers
The majority of UK adults are unable to identify what common pension acronyms stand for, according to new research published by Aegon.
The survey of 2,000 adults, conducted by Opinium, tested respondents' knowledge of pension terminology by providing them with an acronym and aksing them to write down what it meant.
The survey asked the respondents to identify acronyms including defined benefit (DB), defined contribution (DC), lifetime allowance (LTA) and guaranteed minimum pension (GMP).
The most well-known acronym was self-invested personal pension (SIPP), which was identified by 8%. Just one in 50 (2%) could identify what ESG meant.
Just under three quarters (74%) could not identify any of the pension acronyms they were tested on.
Aegon pensions director Steven Cameron said: "The financial services industry is not alone in loving an acronym, but that love is not shared by consumers.
"As the industry seeks to help people engage with their pensions and to deliver good outcomes, we wanted to test just how huge an understanding gulf there is. The results were eye-opening, and our industry needs to take note!
"Providing clear and understandable communication is extremely important when it comes to explaining financial products and services. We should not underestimate the power of using everyday language as it can make a huge difference between confusing or helping people to better engage with their pension and make informed decisions.
"Pensions can often seem daunting for those who do not know where to start, so it is important that the industry cuts out confusing acronyms and truly engages individuals with clear language."
Posts: 883
Pensions are in fact terrible simple.
The idea being growth of your investments ( shares ) over a long period of time increase faster than inflation.
It’s fails for most, to produce a decent pension,+ because those in charge , ( fund managers) fail to obtain returns over 7% a year.
How can that be , when most days at least one stock on the LSE increases over 50% IN A DAY . ?
I believe targeted returns are set far, far, to low.
Posts: 883
D Mail 30/10/22
I am very disappointed with the performance of my pension fund which I would like to bring to your attention in the hope that you could give me some suggestions as to what action I can take to recover some of my losses.
I am 66 years of age and reached my retirement age in September.
Earlier in my career I contributed to a defined contribution pension scheme. When I stopped contributing as a result of moving to a new job in 2014, the value of the fund was £22,507.
In early 2021 I advised the scheme that I wished to defer taking my pension until my 67th birthday in 2023.
In November 2021 the value of the fund was around £35,000. In June 2022 the fund's value had dropped to around £25,000 and today its value is £23,089.
Pension dilemma: I am 66 and my fund has plunged, wiping out almost all gains over the past eight years
Pension dilemma: I am 66 and my fund has plunged, wiping out almost all gains over the past eight years
Part of the reason for opting for this pension was that in the six years preceding my retirement date, my investments were supposed to be moved into less risky areas to protect the value of the fund and to provide more certainty regarding the value of my pension as I approached retirement.
Apparently, this is referred to as the glidepath to retirement.
I have spoken to the pension scheme on a number of occasions but I have been so disappointed with their response times (despite promising to get back to me with answers two people have not replied) I have now raised a formal complaint.
I have rearranged some of my finances and have deferred taking my pension until my 70th birthday in 2026 in the hope that the fund may recover some of its losses.
I did consider drawing down the fund but decided against this as I thought I would only be crystallising my losses. Do you have any other suggestions as to what I can do.
Posts: 883
The poor reader was in my opinion stitched up.
Every financial advisor told the public bonds were “ Safe” and an ideal investment for pension funds in the final years of saving, pre retirement.
The events of two months ago proved this totally incorrect.
It’s worse in my view ,because pension funds were warned of the risks in gearing up , and playing with financial instruments that could, and did bow up.
Don’t forget the public puts absolute trust in those running their pension pots.
It stinks.
Have an idea some massive court cases on the way .
Posts: 883
Within my SIPP pension is my holding of (15%) certificated gold bars in a secure london vault.
I have always been terrified of “Paper Gold” as an investment.
The worlds banks have spent decades surpassing the actual value of gold in an attempt to hold the line on paper money.
Over the next few months and years, I believe their is a good chance the greatderivative scam blows up.
Put simply paper money in China and Russia will soon be backed by Gold in my view.
My gold holding is insurance, I work on the assumption long term it’s price remains flat after inflation.
That results in the remaining 85% of my portfolio having to work harder.
Posts: 883
Published: 21:53 GMT, 5 November 2022 | Updated: 21:53 GMT, 5 November 2022
The near-collapse of the pensions market that prompted a Bank of England bailout has already cost company retirement schemes as much as £75billion, according to a report by a US investment bank.
The huge loss in value reflects the exposure many private sector pension funds have to liability-driven investment strategies. They use LDIs to ensure they can afford future payouts to ten million members of final salary schemes, which pay guaranteed pensions based on workers' pay at retirement.
LDIs deploy leverage – or borrowing – to boost returns from Government bonds, known as gilts.
Fire sale: Many funds came unstuck after former Chancellor Kwasi Kwarteng's disastrous mini-Budget in September sparked an unprecedented sell-off
But many funds came unstuck after former Chancellor Kwasi Kwarteng's disastrous mini-Budget in September sparked an unprecedented sell-off.
JPMorgan reckons the fire sale of assets has cost pension funds between £65 billion and £75billion since August alone. That compares with total assets of £1.7trillion at the start of this year.
The estimates are based on the bank's forecast of figures due this week from the Pension Protection Fund, the safety net for the interests of around 5,200 final salary funds.
But the final cost is likely to be much higher. 'We reckon about 25 per cent of assets have been lost,' said Iain Clacher, professor of pensions at Leeds University.
Posts: 883
Around 2/3 of pension funds assets are held in the form of government bonds.
Since the start of the century the amount issued by the U.K. government has grown ten times !
Inflation has doubled prices in the shops over that timespan.
That tells me something is dreadfully wrong.
Why would any sane individual want to hold a U.K. government bond today, which all yield well under half the inflation rate.?
Who in gods name , would be in the slightest bit interested in investing in an asset class where the larger it gets ( issued number of bonds) the more risk ( default) it carries, that your never get your investment back.
Absolutely bonkers in my personal view.
The more one takes a reasoned view of how pension pots for most individuals are managed the more crackers it appears to myself.
Posts: 883
This will either make you laugh, OR cry. !!
The U.K. government has a protection pension fund, ( paid for by the industry), to protect pensioners, in payment, and those saving for their pensions.
This pays out in the case of fraud and cases of individual pension funds going bust.
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How we allocate our assets
Our strategic asset allocations are set by the Board and carefully monitored to make sure they remain fit for purpose.
Our asset allocation is different from the allocations of average defined benefit pension schemes in the UK. This is because we need to be solvent at times when general pension schemes are significantly underfunded. We need a low risk strategy that aims to be relatively uncorrelated to the funding levels of the schemes we protect.
We operate within a tight risk framework, driven by our need to remain solvent at all times.
For more details, view our asset allocation chart.
————————————————————————————————————————————————-
This week the market is told the funds value, that is estimated to have lost a whopping 25% in the last month alone. !!!
They are absolutely loaded with bonds, swaps and other garbage.
Posts: 883
How pension saves are fleeced
They have multiple ways of extracting fees.
Investing must be done through a transaction platform, so you pay platform charges. These can vary between next to nothing and an annual 0.45% of the amount invested.
Your money gets invested in funds – that is, packages of shares in companies, bonds or commodities. So you pay fund management charges as well. Again, these can start at zero. But the most expensive can drain about 4% of your investment value each year.
Every time a trade is made on your behalf, you pay a transaction cost. The more frequently your money is traded, the more these will add up. Averages aren’t meaningful here but remember that for frequent trades across many funds, the sky’s the limit.
If you retain a financial adviser in charge of all this activity, it’s a bit like having a personal shopper: you are going to pay their fees on top. The most recent Financial Conduct Authority figures tell us that the average financial adviser charges 1.9% to cover their own fees alongside the platform and fund fees.
Posts: 883
Remember the average rate of return is around 7% a year.
That’s for risking your entire pension pot with an average fund manager.
Posts: 883
7/11/22
MarketsCity of London
BOE Calls for Tougher Global Regulation After UK Pensions Drama
Regulators can’t see leverage build up, BOE’s Breeden warns
LDI chaos threatened the whole gilts market and wider economy.
Posts: 883
“Regulators can’t see leverage build up,”
My God, and you think your pension is in safe hands. !!!!
This is exactly the same as the 2008 credit card scandal, where banks handed out vast amounts of credit to individuals ,without asking,( or knowing), how much the competition had already lent.
It was easy to obtain £120,000 of credit card spend if your salary was £30,000.
In the pension world we have recently been told gearing was 4 times asset values.
It was not a question of IF it would crash, just when.
As it happened, is was 8 weeks ago , and nearly bought down the whole show.
Posts: 883
Outrageous:
Even by Public Sector pension scheme standards what the Bank of England get away with is totally unacceptable.
The Bank of England pension scheme is legendary even by City standards, because of its outrageous generosity, including annual pension increases that ar completely uncapped â€â€? unlike almost any other scheme.
Staff make NO contribution to the scheme, while the Bank itself puts in taxpayer funded contributions equivalent to a scandalous 52.2% of employees’ pay last year.
Yet, we now learn the Bank of England had 82% of its own pension fund invested in risky pension derivatives! No wonder they stepped in to by £65m of gilts to help underwrite the scheme!
Posts: 883
Reuters
LONDON (Reuters Breakingviews) - Britain has a financial oversight problem. For the second time in less than three years, the Bank of England has made an emergency intervention in the market for UK government bonds. Both times, selling by overseas funds was partly to blame. The international nature of the $2.4 trillion gilts market limits the central bank’s ability to keep tabs on what is happening. The only hope is to rely on the kindness of regulators in other countries.
In March 2020 the BoE responded when the coronavirus caused a “dash for cash”. Investors rushed to liquidate assets, including money market funds which held UK government bonds. The wave of selling prompted trading to seize up, forcing the central bank to step in and buy debt.
The latest intervention was triggered by excessive leverage in UK pension funds, which had borrowed to boost returns using a strategy known as liability-driven investing (LDI). When the UK government’s unfunded plans for tax cuts knocked the value of sterling and sovereign debt, those funds had to liquidate assets, including government bonds, to meet margin calls on their loans. This selling then prompted more demands for cash from counterparties. The BoE had to prevent what Executive Director Sarah Breeden this week called a “self-reinforcing spiral”.
While the two episodes are very different, they have one striking factor in common: much of the selling came from funds outside the United Kingdom. After the 2020 selloff, the Bank of England and the Financial Conduct Authority estimated that about 90% of the 280 billion pounds of sterling-denominated assets held by money market funds was in entities based in the European Union, beyond the jurisdiction of UK regulators. Many LDI funds were also based in EU centres like Luxembourg and Ireland.
Posts: 883
That’s why in my opinion it’s plain stupid to have a huge chunk of your pension in U.K. Government bonds.
Personally I have zero and would not touch them with a barge pole.
It appears the BOE needs to step in whenever the market hits turbulent times.
That’s highly dangerous
Crying wolf.
Next time, their must be a fair chance it will be game over.
Posts: 883
Press release
Ten years of Automatic Enrolment achieves over £114bn pension savings
Automatic Enrolment has helped millions put more into their pension pots than ever before, according to new figures released to mark 10 years since the policy was introduced.
Department for Work and Pensions
Published
10 November 2022
In 2021, employees across the UK saved £114.6 billion into their pensions. This is a real terms increase of £32.9 billion compared to 2012, when Automatic Enrolment was introduced.
The figures reveal how the policy has transformed pensions saving over the last ten years for people from Sterling to Southend, by normalising workplace pension saving, establishing a culture of retirement saving for a new generation, and helping foster a greater sense of security in later life.
More than 10.7 million employees were paying into a workplace pension in 2021, with the proportion of women saving into a workplace pension, be it public or private sector, jumping by about 50% since 2012. And young people too have benefitted, with those aged 22 to 29 saving into a workplace pension more than doubling in the same time period.