As an Independent bookkeeper, do you have a pension in place? - The Book-keepers Forum (UK)

Dalbir · Senior Member

As an Independent bookkeeper, do you have a pension in place?

Amanda · Expert

Hi Dalbir,

In my opinion the pensions in industry especially aren't worth the paper they are written on, my hubby's is rubbish and we still pay into each month! I personally have some frozen ones but they are worthless and aren't worth switching to a new one. Invest your money elsewhere, talk to a Financial advisor, they will tell you not to bother with the pension and do something else, like buy a 2nd property to rent out. Nows a good time to do it as the market is flat and rentals are going through the roof!

This is just my opinion of course and others out there who have really good pensions (if there are any now) will probably disagree with me.
If you look at what you may have paid into a pension from a young age and get a forcast now, you will see that its been a waste of money, I know someone who has worked out what they have paid in since their early 20's and their forcast is so bad they will get back less than they have paid in!

HTH

PS I'm waiting for people to disagree with me!

Shamus · Forum Moderator & Expert

For once I'm not going to be disagreeing! I think that's a sound arguement Amanda.

I've got two current pensions that I pay into (never one for having all of my eggs in one basket), A SIPP, three occupation pensions that I can't pay into cos I don't work for those employers anymore (one of those pensions is index linked). And with all that I still think that I'll have virtually nothing when I retire (as with you freind Amanda probably going to get back much less than I paid in).

Amanda · Expert

Blimey Shaun,
Is that a first your are NOT disagreeing!

I just don't rate pensions at all and I think other investments are the way to go, but check carefully before parting with your money. We know quite a few people who have 2nd or 3rd properties that they do well out of.
I'm the same as you a couple of pensions that I can't pay into because left the employment long ago.

The only pensions that are really any good and I am going to get slated for this one is the public sector, but after yesterdays strike and the dear kiddies being off school and I couldn't start work till they went out with friends, I'm sure there will be lots of opinions on this one!!!!

Maybe another thread coming on!
The thing is what type of pensions or investments are our children going to be advised to get to secure their future, thats a frightning thought.
Lets face it 20/30 years ago when we were advised you must have a pension did any of us know how bad the economy was going to be and the pensions so bad?

Sorry getting carried away on this one, its always a topic of conversation in our house! Although I hasen to add I am not near pensions age, still along way to go!

Dalbir · Senior Member

I admit I havn't taken a pension plan out as I am too afraid of getting less in than I would put in, like in your friend's case Amanda.

Only worth going into pension if there is certainty (like defined benefit pension scheme- employer takes the risk) or if the employer matches your contribution. However (I am assuming here), most folks on this forum are either self employed or shareholders of ltd liability bookkeeping companies.

I think maybe will have to accept that in 20 years time (unless you become rich, not everyone will-if they do; It's called inflation), we will not really retire and finding some form of part-time work will be part of our pension planning. As the great Peter Green once said, Oh Well.

This is scary, Shamus is agreeing. I suppose I can throw the cat amongst the pegeons and state this is normal (we are just going through bust phase of boom-bust cycle and those who retire in 20 years time will have more than they put in as there will be bubble in market then and their pension schemes paid cheap now for their shares)

Dalbir

kjmcculloch83 · Expert

I have a small amount in a pension from the local authority where I worked for 4 years, but it'll be next to nothing when these cuts hit. Regards private schemes I've never really looked at it, but now I don't think I will. My mum, although working for a local authority for a long time never joined the pension scheme. I always thought she was crazy, but now she'll be better provided for than her co-workers. She and my step dad bought properties and rent them, when they retire they can either continue with the rental income or sell. I think thats what I will do now too.

Kris

Dalbir · Senior Member

I can see the news now, Property price boom in rental areas of Glasgow traced to Kris's post in the bookkeeping forum.

Problem with rental, everyone will jump on it and when interest rates go upto normal levels. interest coudl become higher than rental income.

Then again in long term you can't lose in bricks and mortar (I think).

Dalbir

kjmcculloch83 · Expert

There is a rental boom right now because no one is getting mortgages. My folks did it when interest rates were high, but now they are mortgage free on most of the properties. The biggest plus for this is if you play it right, someone else is paying your pension. As long as the rent meets your costs you don't need to make a profit until you retire.

Kris

Amanda · Expert

Nows the best time to get on the rental/property market, I've done alot of research and the average person doesn't get a mortgage till late 30's, its a far cry from when I got my first one at 21, then got my fingers burnt by the neg equity, but at least I learnt the hard way and it turned out alright on the end.

We know a few people who have properties and they are winning all the way to the bank. Regarding the interest rate, its unlikely to go up too much as te economy needs it to stay low to encourage people to get on the ladder, if it suddenly started rising and if god forbid it reached 16% like it did once before, (Kris you are to young to remember those days), then there would be alot of repossesions and no one would buy and the market would be dreadful. I personally can't see it happening lets face it its hasn't really moved in 2 years, and theres alot of property out there are a t good price at the mo. So grab it and start your pension fund that way.

We know someone who has about 60-70 properties that he rents out, hes had some of them for a long time and invested when he was young, thats his part-time business!

kjmcculloch83 · Expert

I've got my fingers crossed that it doesn't move much in the next few years either. All the savers will be moaning though. You're right Amanda, I don't think it's been as high as that since I was born (1983).

Kris

-- Edited by kjmcculloch83 on Thursday 1st of December 2011 11:37:13 AM

Amanda · Expert

I think from memory it was around 1989-91 that it was that high, I'm sure Shaun will correct me if I am wrong!

Spamkebab · Expert

It was reported last week that the average age of first time buyers has risen to 43. I don't know if thats a national average or just a northern one lol but i bet theres some fed up mums and dads.

Amanda · Expert

The problem with buying your first property when you are 43 is it doesn't give you alot of time to move around and increase you equity before you are due to retire, unless you are in the habit of buying doing up and selling and thats providing you don't have kids, once the kids come along it makes it more difficult to do DIY!!!

God hope my kids aren't still here in their 40's!!!

-- Edited by Amanda on Thursday 1st of December 2011 01:04:47 PM

Spamkebab · Expert

I recently ventured into my sons room and to tell the truth i thought why on earth would he leave home? He has the biggest room in the house, double bed, big telly, pc, xbox, virgin media box thingy and thats only what i spied through all the used towels and dirty socks.

Edited: i just realised as i read my words, i'm the dad and he's moving out of that room, i want it!

-- Edited by Spamkebab on Thursday 1st of December 2011 12:35:47 PM

Dalbir · Senior Member

"God hope my kids aren't still here in their 40's!!!" Amanada

Yiks that means not only kids but also future children in law and grand children will be living with parents until the kids are in their mid 40s, is there enough room in an average home?

Maybe there is a market for Japanese style capsules (enclosed bunk beds in Japanese Hotels. ps: never been to Japan, would luv too) for British homes to handle home population explosion.

Dalbir

Spamkebab · Expert

My grandparents used to live with 3 generations in their homes when they were kids, maybe it's gonna be comin full circle lol.

kjmcculloch83 · Expert

Thats high, in Scotland the average first time buyer is 28. What a big difference both sides of the border.

Kris

Amanda · Expert

Kris,
Do the wages reflect the house prices as well?

In the south east the housing is mega expensive and young couples can't afford the deposit unless there parents are the bank. People will be building Granny Annexes but not for the Grannys it will be for their kids and grandkids, how scary is that!

kjmcculloch83 · Expert

The average Scottish house price is about £160,000. Having a look on rightmove and it seems that a 3 bed semi in Ayr would be about a third of the price of a similar house in a similar neighbourhood in Canterbury. With regards average salary, I'm not even sure what that is here any more.

Kris

Spamkebab · Expert

Average salary is normally worked out by finding how much i earn and then adding 18 to 23k, just a rough calculation but never far off lol

YLB-HO · Guru

I have a small pension which is worth about 25% of what was paid in over 15 years. I stopped contributing about 5 years ago and set up a "property company" which I put all the spare money I had in at the time. Friends, Family and a few clients have also put some money in and the company was able to purchase a property in Turkey which we all use for wonderful cheap holidays! We have no mortgage or debts on the property. We are still putting money into the company with the intention of purchasing a second property one day for cash. Possibly in the UK or the US.