Thursday, October 06, 2011
This BBC article explores some of the problems and stresses facing people retiring in the current economic situation, and how their annuities are being affected by the volatility of the traditional share based pension schemes.
The gentleman in the first example is interesting for the comments he made around SIPPs. Although true that to transfer his funds would have cost somewhere in the region of what he said, they have come down drastically of late and in some cases are even waived when set up in conjunction with certain investment products. He also states that his fund has dropped 10-12% which is considerably more than the fees he mentioned even if he changed products regularly, plus the yearly "Management" fees tend to less with a SIPP.
The general message in the media at the moment is that traditional share based, managed pension funds are not delivering on the promises of 20 years ago. This coupled with an apathy towards contributing to them, lack of ability to have input and lets face it that they just ain't sexy means that there are going to be a lot of unhappy older people around in the very near future.
The fact is there are other options out there, more interesting, dare I say more sexy options that you can have input to yourself that may not ultimately do any better than what you already have but at least you can blame yourself. The final fact is the later you leave it the less options you will have.
This blog is opinion and does not constitute advice. We always recommend seeking professional advice before making financial decisions.