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The value of the average gold-plated pension is on course to overtake that of a typical property for the first time next year.
The calculation by Hymans Robertson, a pensions consultancy, has triggered calls for savers to stop withdrawing money from final-salary schemes to buy second homes or buy-to-lets, because it could harm their retirement incomes.Full/source article SEE ALSO - Pensions Vs BTL and TaxationUP NEXT - Pensions don't make money? Think again!DON'T MISS - S24 "creating a pensions crisis" - claimNOW WATCH:
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Says a consultant with a vested interest in the pensions market..............
We had little time for pensions until 12mths ago but have put a lot of effort into reviewing ours a adding to them for tax efficiency & retirement planning, but i still believe that if we cant do deals that out perform pensions we need to jack it in.
Plus the whole pension subject is mind numbingly boring (in my opinion.)
Stewardson Developments Ltd.
Burson Land Ltd. & Jennings & Gilchreaste Ltd.
Follow me on twitter - @philstewardson
What's a gold-plated pension? I have heard the term but don't know anyone with one.
Yes the agent that sell you his product...!
I'd never heard of it either but have found this description -
'Final salary, or defined benefit, pensions are considered 'gold plated' because they promise to pay a secure, index linked income for life, based on final or career averaged salary'
Most workers today are offered 'defined contribution' pensions in which apparently there is less certainty with regards to what income they will receive in retirement.
So based on your findings, unless you're a full-time worker in a company, then you're not going to be getting a gold-plated pension.
I've heard of the term index-linked, which I thought was the more usual version?
As I'm not planning on going back to work for a company, guess my chances of a gold-plated pension are pretty low!
You don't know any teachers or people who work for the NHS, or civil servants?
Not only do they still have defined benefit pensions, guaranteed by the government, but they get full inflation indexation. Private sector DB pensions typically have a cap on indexation. They also tend to get lost of other less obvious advantages, Whne the new pension came in in 2016 the government stopped pating rises related to certain older pensions, except for public sector pensioners. Instead of having a separate critical illness cover paying a lump sum they can get their full pensions paid from before the normal pension age in the event of ill health stopping them working.
Not all final salary pensions are gold plated. I have one but rises once it is in payment are "entirely at the discretion of the trustees". Since the company that took over the one I worked for was itself taken over they have given just two 1% rises in over 15 years. I have another defined benefi one, a hybrid scheme with a final salary underpin. The law was altered to force such private sector pensions to pay inflation linked rises up to a cap of 5%, and the company has agreed to do so for the wole period the acheme applied. However that schem closed ten years before I stopped working for them. The law was changed after the scheme ended to lower the cap, to 2.5% IIRC.
The biggest turn off is the word Pensions
When I was an IFA I never used the word pensions - it's so misleading
I think of my Pension as a separate Company which is just about totally Tax free - a bit like an offshore company
Of course its not offshore, but its treatment is very Tax Friendly
and for passing wealth down to family its second to none and its cost effective too
It's ring fenced from debts
I know some of my old customers are very happy they invested in pensions years ago
With pension freedom there is so much they can do with the cash pot ...
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.