I’ve never had time for pensions. In spite of being told by everyone and anyone that pensions were essential, I’m just not convinced that pension schemes will make your retirement golden.
Of course, that’s not how they’re portrayed….
‘ROLL UP, ROLL UP! Start a pension! Put money into it for years! And ALL your troubles will disappear when you reach retirement. You’ll be living off figs and caviar and champagne for the rest of your life!’
Until you read the small print…
*figs, caviar and champagne are in no way guaranteed. Projections suggest you will not enjoy all three at once, and each can be replaced by lard, fish roe and brown ale at any time.
Nowadays I’m not the only cynic. Many people are waking up to smell the coffee…
In February this Moneyfacts published figures showing that the average pension income has dropped by 70% in a decade.
They warned that this was a ‘powerful reminder of the investment risks inherent in saving via a defined contribution pension’.
Investment expert Ros Altman says:
‘The entire UK pension system has been based on a bet that equities would always do well enough over the long term to reliably deliver good pensions’.
It’s a punt that’s not paid off.
And it’s YOU who bears the brunt.
The closest I’ve ever come to a pension happened years ago, when I took out an endowment mortgage on my first ever flat.
The decision was presented as a no-brainer…
I needed a £40K mortgage. I could either go for a replacement mortgage, where I’d pay the capital and the interest over 25 years, with no added perks. At the end of the 25 years the £40K loan would be paid off.
Or I could take out an endowment, where I’d pay the interest only each month, and squirrel an extra bit away into a policy that would mature in 25 years. The idea was I’d still owe the £40K in 25 years time, but I’d pay it off with the money from vast riches my endowment would be worth.
The projection…. I’d pay off the £40K AND have an extra 12K in the bank – to spend on what I pleased. Woo-hoo!
And THAT was a ‘low’ estimate… if things went well, I could be looking forward to an extra £44,000 in my account! WOW! I mean, what sucker would miss out on that?
So I took the endowment route, and guess what happened…
The ‘surefire’ mainstream retirement plan
that lost me £12,000
My endowment will expire in about three years, and guess what it’s expected to pay out…?
The £84,000…?
No way.
The £52,000…?
Not even close.
The £40K…? At least that would pay off my loan…
Er, no, sorry sir… things didn’t quite work out as we’d hoped…
At present, my policy is due to pay out £28K. That’s a £12K SHORTFALL on my loan. Luckily I’ve moved on and paid off the mortgage a long time ago – but if I was relying on my endowment to pay it off, I’d be in trouble.
And that taught me a valuable lesson…
If you hope that following mainstream advice and doing the ‘sensible’ thing is going to see you right in the end, it’s not. Not when it comes to your finances.
AND, if you think getting a pension or an endowment and letting some random, lazy-arsed fund manager put YOUR money in the stock market is going to see you right in the end – it’s not. Because the stock market is volatile. And trusting YOUR wealth to something like that, without really taking charge and working at it, will leave you poorer in the long wrong.
This is just my opinion, of course, but since I pulled away from the mainstream, and stepped into the fringes, I’ve seen things that can make £2,000, £3,000, £4,000 a week.
Or what about £4000 profit in 10 minutes?
I’ve witnessed one man (who went bankrupt many years ago while he was toeing the line a trying to hold down a ‘proper’ job) make £4000 PROFIT in about 10 minutes. I’ve seen another, an ex-City boy turned outcast, chase £8,700 profit in a 24 hour period from a £300 risk (he only made about £3K in the end).
And I’ve seen another – a complete write-off at school – make £5K profit from a type of low-risk move that most people simply don’t know about.
THESE are the types of people I’m interested in. I’d much rather listen to someone who can tell me how to make money this week, this month or this year, so I can try them out and see if work (or not) myself.
If someone starts guesstimating how much I’ll make after 25 years, I tune out. Because they haven’t a clue.
Now, I COULD research and list out the ten best pension providers at this point. I’m sure some are better than others. But you know what…? I think it’s a waste of time.
If you want to get a pension, or you have a pension – fine. I understand why you have one, and it’s better than sticking your money under the mattress,because it really should make you SOMETHING back. Plus, if it’s under the mattress, there’s always the temptation to sneak it out and spend it.
But, if you REALLY want to build a wealth that will make a REAL difference to your life, you have to take a few chances. Step one – you HAVE to find
different people that have made money in different ways, and see if what they do is something you could do.