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Originally posted by rpg9000
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private pensions and Avc's etc preform well for the sales men and the companies who sold them. they / you lock you money away for years with promises of a return only to find that the promormance ain't there and the annuity rate has fallen, then you die and your poor wife or husband only gets half the money, who has trousered the other half?
So take that, stoop!
Couldn't agree more c1. Every year I get my latest pension forecast, and it's now a fraction of what it was three years ago, and yet they're still assuming 7% growth? Go figure - I certainly can't.
As with a lot of "Financial Services", the advisors and providers are in a win-win situation - their commissions and profits are taken out before the poor punter just gets to pick up any crumbs that are left over.
If I could, I'd take the whole lot out now and take my chances with the Turkish interest rates - at least if it all went belly-up, I've not supported "the city".
Fair points but you can't blame the insurance companies for the poor performance of the stock market and low interest rates can you?
I agree that some have performed awfully because they did not have enough assets to ride out the big falls in share prices that we have seen on numerous occasions over the last 15 years. The strong ones did and actually invested in more shares when the prices were lower.
As for the assumption of 7% growth - these are figures provided by the FSA and are not assumptions but a guide to what you might get back if they achieve this rate until you retire. The most likely reason why it is less than 3 years ago is due to the final bonuses being reduced due to poor performance in the stock market/property or whatever they invest your money into.
Personally, in today's climate, I would only invest in a pension or avc if I was a high rate tax payer or a none tax payer (you still get the tax relief).
As for being charged up front - years ago that was the case (and surprisingly they are the plans that have paid out the most due to the excellent returns they achieved in high inflation years) but now most good companies charge about 1% annual management charge (taken off each payment) and most good companies have their staff on basic salary plus bonuses if they hit their targets.
We are all in the same boat - wherever you invest today there is no way you will get the returns you could have got 10 or 15 years ago - and Turkey is a prime example - interest rates down from 17% to 9% in the last year or so.
