Income protection & pensions

RE: Income protection & pensions

Rob Loxley — Thu, 15 Sep 2016 14:34:02 GMT

[quote user="Charles Thursby-Pelham"]but I can't find anyone on the internet willing to give advice for an hourly rate. It appears to be either a percentage, or execution only. Have I missed something?[/quote]

I'd maybe start with unbiased.co.uk and do a search for what you are looking for
Their fee guidance https://www.unbiased.co.uk/ways-pay-ifa

RE: Income protection & pensions

Charles Thursby-Pelham — Thu, 15 Sep 2016 10:07:43 GMT

[quote user="robloxley"]You should be able to find someone to pay an hourly rate to look at your asset allocation and investments - can't see why you should pay more if you have a larger fund. And you should certainly be able to find one-off advice without longterm tie-ins.[/quote]

Thanks for your response, but I can't find anyone on the internet willing to give advice for an hourly rate. It appears to be either a percentage, or execution only. Have I missed something?

RE: Income protection & pensions

Rob Loxley — Wed, 14 Sep 2016 21:28:54 GMT

[quote user="Charles Thursby-Pelham"]They all seem to charge a percentage of your whole fund for initial advice, then an annual charge to oversee it.[/quote]

You should be able to find someone to pay an hourly rate to look at your asset allocation and investments - can't see why you should pay more if you have a larger fund. And you should certainly be able to find one-off advice without longterm tie-ins.
Depending how active you want to be yourself, I'd consider reading some literature on asset allocation.

[quote user="Neil Wheadon"]The problem is that if you go direct the company pay themselves the same commission.[/quote]

Discount brokers (who will rebate you all/some of the commission) are a good way to buy

RE: Income protection & pensions

Charles Thursby-Pelham — Wed, 14 Sep 2016 15:33:41 GMT

[quote user="bob lehner"]Re IFAs, banks, pension funds, insurance companies - my jaundiced view formed over many years is that they are generally a bunch of charlatans who are basically out to rob the unsuspecting punter - no matter how friendly or plausible they might seem[/quote].

I agree.

Does anyone know of a good IFA who will give advice for an hourly rate? And how many hours should it take for the IFA to look at the funds in which your pension is invested and recommend where it would do better/be safer?

They all seem to charge a percentage of your whole fund for initial advice, then an annual charge to oversee it.

This is in addition to the annual charge made by the pension fund company itself.

RE: Income protection & pensions

Martin Atkinson — Wed, 14 Sep 2016 14:28:51 GMT

[quote user="Gillian Mostyn"]But when discussing how much money is needed to retire, you mentioned jetting off to Dignitas when your marbles fail you. I was simply saying that, hopefully, the marbles don't always go at 80 - retirement lasts a lot longer than it used to so the pot has to stretch further.[/quote]I wasn't considering how much money I would need in my pension at that point I'd already hijacked the thread I'm afraid. I hope very much I don't have to go off to Dignitas, I fully intend claiming my free ski lift pass at 80 and surpassing my father at 95 then I might as well hang on to 100 to get my telegram from the queen/king then see where I go from there. Just that I have no intention of ending my days as a cabbage in a nursing home so no-one will have to plan for that if my plans go tits up.

RE: Income protection & pensions

Neil Wheadon — Wed, 14 Sep 2016 13:32:55 GMT

[quote user="bob lehner"]When I started looking at annuities I was absolutely staggered at how much commission goes to the IFA just for filling in a couple of forms to set the thing up - eye watering!![/quote]

Absolutely, that's why I avoid them like the plague. The problem is that if you go direct the company pay themselves the same commission. It's a cartel, my brothers a banker and he says they make loads of money simply by taking tiny amounts of everything but 0.1% of everything adds up!!

Thanks for the assessment, a ball park figure is all that was required as no-one knows the future, but you need some sort of starting point.

Neil

RE: Income protection & pensions

Gillian Mostyn — Wed, 14 Sep 2016 12:26:20 GMT

[quote user="Martin Atkinson"]I'm not sure if you are agreeing with me or criticising me Gilian. If I'm able to be independent with minimal assassinate for physical tasks at whatever age I'm happy with that.[/quote]

Absolutely. But when discussing how much money is needed to retire, you mentioned jetting off to Dignitas when your marbles fail you. I was simply saying that, hopefully, the marbles don't always go at 80 - retirement lasts a lot longer than it used to so the pot has to stretch further.

(Having said that, my dad died at 60 ..... as I have said before, people can be so busy planning for the future that you don't live today.)

RE: Income protection & pensions

bob lehner — Wed, 14 Sep 2016 11:47:26 GMT

[quote user="Neil Wheadon"]

Hi Bob, OK you may have a grasp on this (no-one in their right mind would cash in the whole pot)

Retire at 60

Annual income £24000/annum (£2000/month)

Aim to deplete the fund by 85? (that's the trick isn't it, but as Clive says the state will chip in.) State pension £150/week, that kicks in in your mid 60's = £7800.

So what size of fund do you need?

[/quote]

Too many unknowns and variables to make any realistic assessment.

On the face of it you want 25 yrs x £24k = £600 k. State pension would give you c.£160k over that timespan, meaning you would need a fund of £440k at the outset. No allowances for inflation or potential growth of the fund.

The problem with drawdown is that you have to leave the fund invested somewhere and if the fund value falls (as it inevitably will when the stock market crashes every 10 years or so) then you may end up drawing out too fast and will run out of money before you expire.

Re IFAs, banks, pension funds, insurance companies - my jaundiced view formed over many years is that they are generally a bunch of charlatans who are basically out to rob the unsuspecting punter - no matter how friendly or plausible they might seem.

If High Street IFAs are so clever with money, why are they working out of a modest office looking after the likes of you and me rather than living on a yacht in Monaco?

When I started looking at annuities I was absolutely staggered at how much commission goes to the IFA just for filling in a couple of forms to set the thing up - eye watering!!

RE: Income protection & pensions

Martin Atkinson — Wed, 14 Sep 2016 09:05:54 GMT

[quote user="Gillian Mostyn"]My grandma is 94, lives alone and pretty much independent apart from help with shopping, and she certainly still has all her marbles. Not everyone goes senile when they hit 80.[/quote]I'm not sure if you are agreeing with me or criticising me Gilian. If I'm able to be independent with minimal assassinate for physical tasks at whatever age I'm happy with that. I've been such an active independent person all my life that if I became dependent on others full time in an environment sat watching the telly where the highlight of the week was playing bridge with a load of old people I would rather have my ashes dumped in Lac Leman!

At the moment I'm suffering weeks of enforced relative lack of activity with my fractured clavicle. Although I'm able to work and perform most everyday tasks it is still driving me to distraction. If I couldn't look after myself at all I would be in the depths of depression.

My father went into a residential care home at 95 after my mother died suddenly and my sister realised she could care for him full time. He lasted 2 weeks before he effectively starved himself to death. It was a blessed relief as he was so miserable because like me he'd always been very active.

RE: Income protection & pensions

Julian Earl — Wed, 14 Sep 2016 08:06:09 GMT

An important point about the premiums, I think. Because if you pay the premiums yourself, ie after tax, and not paid by practice future ,income-protection payments to you if you need them, should be tax-free and that could make a big difference. So there is something to be said for paying them yourself. Just Something to consider.

RE: Income protection & pensions

Anthony Todd — Tue, 13 Sep 2016 19:07:31 GMT

[quote user="robloxley"]Known as Trail Commission; post-RDR (review of commission payments etc), shouldn't be a worry https://www.fca.org.uk/consumers/trail-commission[/quote]

Thanks, didn't know that .

RE: Income protection & pensions

Gillian Mostyn — Tue, 13 Sep 2016 16:45:41 GMT

[quote user="Martin Atkinson"]I won't, I'll be off to Dignitas before that, if my family want to keep as a vegetable in a nursing home and I'm too senile to be aware they can pay for it! And that is not a joke it is my stated intention. [/quote]

My grandma is 94, lives alone and pretty much independent apart from help with shopping, and she certainly still has all her marbles. Not everyone goes senile when they hit 80.

The standard of residential nursing care provided by the state is pretty awful (My grandma was put in a care home for 2 weeks to clear a hospital bed when she broke her wrist least year.) I contrast, my other grandma (in-law) lived in a private nursing home that was more akin to a 5* hotel. (She had a heart problem which meant she had to be checked on frequently - she had frequent synopal episodes as well as quite bad OA, but also had every marble intact.) She paid, obviously - but it was her money to spend. I know how I'd rather spend my last few years!!!!

RE: Income protection & pensions

grumpyoldman — Tue, 13 Sep 2016 16:11:24 GMT

My kids have already said they are not going to wipe my ass, so I probably do need to die quickly and suddenly if I am not going to erode their inheritance too much.

I do remember watching elderly relatives get steadily asset stripped by the cost of residential care, not pleasant in the end, they are almost ready to put a pillow on the victims head, they watch others with zero savings getting the same c/o the nanny state.

RE: Income protection & pensions

Martin Atkinson — Tue, 13 Sep 2016 15:52:03 GMT

[quote user="robloxley"]Until you need residential nursing care?[/quote]I won't, I'll be off to Dignitas before that, if my family want to keep as a vegetable in a nursing home and I'm too senile to be aware they can pay for it! And that is not a joke it is my stated intention.

[quote user="bob lehner"]Yes - draw the lot down and lose 40% of it in tax! A rather quick way to turn £100k into £60K![/quote]Well you will at least get the first 25% tax free.

RE: Income protection & pensions

grumpyoldman — Tue, 13 Sep 2016 15:49:52 GMT

[quote user="bob lehner"]I fear you are living in a fantasy world.[/quote]

Depends on the fund management.

RE: Income protection & pensions

Neil Wheadon — Tue, 13 Sep 2016 15:24:26 GMT

[quote user="bob lehner"]Yes - draw the lot down and lose 40% of it in tax! A rather quick way to turn £100k into £60K![/quote]

Hi Bob, OK you may have a grasp on this (no-one in their right mind would cash in the whole pot)

Retire at 60

Annual income £24000/annum (£2000/month)

Aim to deplete the fund by 85? (that's the trick isn't it, but as Clive says the state will chip in.) State pension £150/week, that kicks in in your mid 60's = £7800.

So what size of fund do you need?

Neil

RE: Income protection & pensions

Neil Wheadon — Tue, 13 Sep 2016 15:18:35 GMT

[quote user="Clive Ansell"]My mother in her late 70's is financial comfortable with mortgage paid and no debts, and in receipt of 4 pensions including the state pension. She has a friend of a similar age who does not own a home and receives only the state pension. By the time the friend receives various hand outs and top ups from Nanny, and my mother being taxed in to oblivion, the friend has almost as much disposable income.[/quote]

Cue Wynne here but a true story

I asked a lady 10 years ago who worked for the Department of Social Security about the State Pension as they were encouraging folks to have a look and make sure they had enough yearly contributions. (You need 30 years NI contributions to accrue a full one)

Me 'So if you're on unemployment benefit, do you accrue a full state pension?'

Lady 'Oh yes'

Me 'So who's the mug'

Lady ' You are'

I'm not making that up. One reason the Conservatives don't want means testing as it discredits people making proper financial decisions.

Neil

RE: Income protection & pensions

bob lehner — Tue, 13 Sep 2016 15:16:50 GMT

[quote user="grumpyoldman"]My calculations told me for a retirement income of 50k you needed a fund of 667k , because annuity returns were so abysmal. With an IFA your probably going to get that kind of return from 400k , similar to the returns from buy to let.[/quote]

12.5% p.a. return on capital, whilst conserving the value of the fund??

I fear you are living in a fantasy world.

[quote user="robloxley"]]Can anyone give a figure please for the size of pension you need to retire on, Ignore annuities as you can draw the lot down down. [/quote]

Yes - draw the lot down and lose 40% of it in tax! A rather quick way to turn £100k into £60K!

RE: Income protection & pensions

Clive Ansell — Tue, 13 Sep 2016 14:44:05 GMT

[quote user="robloxley"]Until you need residential nursing care?[/quote]

The problem or issue there is that once you need that sort of care it will just eat away at any assets or savings you may have (can be up to £2000 per week!) until they are depleted, at which point nanny (state) will pick up the tab; which of course raises the question why bother to save at all ? I guess those financially savvy will lose/transfer/dispose of assets before reaching that stage.

My mother in her late 70's is financial comfortable with mortgage paid and no debts, and in receipt of 4 pensions including the state pension. She has a friend of a similar age who does not own a home and receives only the state pension. By the time the friend receives various hand outs and top ups from Nanny, and my mother being taxed in to oblivion, the friend has almost as much disposable income.

RE: Income protection & pensions

Rob Loxley — Tue, 13 Sep 2016 13:51:09 GMT

[quote user="Martin Atkinson"]The amount of pension you need is surprisingly low, the kids have left home and the mortgage is paid off so you can't compare it to your current level of income.[/quote]

Until you need residential nursing care?

RE: Income protection & pensions

Martin Atkinson — Tue, 13 Sep 2016 10:03:00 GMT

I have little to add to this other than that I would use your employers workplace pension scheme as he has to add a contribution although whether this is in real terms or in lieu of a pay rise is a moot point. My staff have been advised that I cannot afford to give them a pay rise if I also have to contribute to their pensions, I've contributed the first 1% of my pocket but when it escalates that is different. However, I would also have a number of personal pension plans (baskets and eggs come to mind) but would seek the advice of an IFA, I use Dickinsons albeit their support over the last 12 months has been minimal.

My pension funds may not have grown much in the past 10 years but they did very well to start with and you should look at the long term not current poor growth figures and any other form of investment is no better. But the greatest incentive was tax relief at my top rate, OK I may have to pay tax on my pension when I withdraw it but it will be at a lower rate.

The amount of pension you need is surprisingly low, the kids have left home and the mortgage is paid off so you can't compare it to your current level of income.

As for income protection insurance I've had it for all of time since I became self-employed but I've never come close to needing it and I cancelled it all last year but hindsight is a wonderful thing. My thinking is now that if I'm off work for long enough to trigger the insurance I would probably retire anyway. Given my time again I might opt for critical illness insurance which is cheaper and not so dependent on nit picking conditions.

RE: Income protection & pensions

Rob Loxley — Mon, 12 Sep 2016 20:38:17 GMT

[quote user="Anthony Todd"]but also annually the advisor gets what is called, I think, a rolling continuous commission from your pension pot[/quote]

Known as Trail Commission; post-RDR (review of commission payments etc), shouldn't be a worry https://www.fca.org.uk/consumers/trail-commission

RE: Income protection & pensions

Julian Earl — Mon, 12 Sep 2016 19:30:52 GMT

[quote user="Evelyn Barbour-Hill"]

[quote user="Robin Grimmer"]

I don't bother with either. Well not strictly true, I have got a small pension but income protection is a waste of money.

[/quote]

If you are self-employed with a family, unless you have other "private means", I assure you income protection is absolutely vital.

And you want to start early paying into a pension, however you actually arrange it. Take the word of one who didn't.

[/quote]

Sorry Robin but that is dangerous nonsense. I speak as someone who received a final year lecture telling us to get income protection when we get aour first job, because"some of you might break your legin the first eek and be unable to work at all. I took the advice but Your sentiment is correct in that until 2012 I thought I had wasted my money for the previous thirty years until my accident proved that belief to be wrong. I had two policies in fact, both of which paid out after I had to stop work ,one with Liverpool Victoria, one with ReAssurance UK, both of whom have been open/helpful and not messed me around at all subject to appropriate medical reports. I could not hav survived without the insurance, so again, sorry Robin but I beg to differ Income Protection cold be crucial? Younever know what's waiting around the corner. John Lennon[I think was correct!]Lifeis what happens while you are busy making other plans! Look at my strap-line below; I could not have got through without insurance! Thank you KLV and RUK!

So again , sorry Robin but my experience is a salutary one I'm afraid.

RE: Income protection & pensions

Anthony Todd — Mon, 12 Sep 2016 19:29:22 GMT

[quote user="Gillian Mostyn"]

[quote user="Anthony Todd"]in some pension plans they can be over £1000pa, out of your ultimate pot!! [mine were][/quote]

I would politely suggest that if your pension gains justify this amount, then it is money well spent. If not, you got lousy advise. Either way, the simple solution is get a better adviser.

[/quote]

No, as I said there is a commission taken at the time of the advice but also annually the advisor gets what is called, I think, a rolling continuous commission from your pension pot, as far as I could find out was for the term of the pension.

I'm not sure if you can ever get a full statement, not from your advisor, but from the pension provider itself ie Scottish Life etc., NOT your advisor, who just gets the annual rolling commission, which is usually not ever mentioned.

Gains would be better if they didn't pass back the rolling commission though.....

RE: Income protection & pensions

Gillian Mostyn — Mon, 12 Sep 2016 15:24:42 GMT

[quote user="grumpyoldman"]The problem lots of people have is that they are often, "too busy working to make any money".[/quote]

Couldn't agree more. Generally, you need various types of savings to make the most of your money, covering requirements now, in the future and in retirement. (We have ISAs, rental properties, pensions and a business - not just one pot of money.) It takes effort, time and financial expertise to know how best to invest your money. It can make/save you thousands putting the effort in though!

[quote user="grumpyoldman"] the managed funds on H&L show performance over the last 5 years, which is often a mix of +25% per year to -5%, giving overall growth of 60-80% over 5 years . Pension funds take your money and put them here ,give you a low% when they do well but in the past made you take the hit when it was-5%. Looking after themselves first as always[/quote]

Pensions are only a reliable way to save if you are looking for a long term investment. I dont think any adviser would recommend a pension as a good way to invest for less than 10 years or so!