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Why are people obsessed with getting a pension

Midlife crisis man

What's the point having one.

About myself: I don't have a pension. I came from a poor background and was never thought about the importance of financial awareness.

I struggled throughout the recession eventually going back to college. I'm in my mid 30s now recently started working in the public sector. I'm only on 25k per year. I'm not entitled to the public sector pension because I'm on a fixed term "trainee" contract in my field.

Also if I happen to stay in the public sector for the rest of my career I won't be long enough to get the cushty 40 year pension anyway.

So, in the next 30 years the retirement age will probably be closer to 70. Why save the bollox off myself just so I have a bit of cash when I'm an auld fella with (best case scenario) 10 years of life left. Who needs that much money at that age. Am I missing something here? You can't take it with you when you die.

I'm sure I'll have a good bit of regular savings by then but what's with the obsession of pumping as much money as you can into a pension (that'll end up getting raided by the government in subsequent recessions anyway)

I'm going to enjoy my money while I have health and vigour and the government can look after me when I'm an auld boy.

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ytpe2r5bxkn0c1

Metroid diorteM wrote: »

Don’t ask people in this thread. Ask old people. They know. You’ll be shafted by some wise ass. Guaranteed.

I'm almost 76. Is that old enough? A pension was the best decision I ever made. My pension enabled a retirement with more than sufficient to enjoy life and never have to worry about money. I can buy a new car every couple of years, holiday, socialise etc to my heart's content. Things I couldn't do on the state pension.
So, ask away. What exactly do you want to know?

KyussB

Emmie Sparse Starlight wrote: »

Part of the argument for the tax relief is that without it the income would be in effect taxed twice. Pension tax relief is just deferred taxation. It's a universal principle, employed in most countries.
It's not like any other investment, as the salary from the pension fund is taxable under PAYE rules.
And it's not just for the wealthy, we all benefit from it.

Not really, the taxed income would go into the pension fund, and then the gains can just be subject to Capital Gains tax - as they should be. The income would be getting taxed only once, and the investment gains would be getting taxed separately.

No reason to treat it any differently to any other kind of investment.

KyussB

Emmie Sparse Starlight wrote: »

It's a benefit the employer can provide at a cost less than adding it to the wage, because it gains tax relief as an expense in the P&L account.

Sounds like another tax subsidy that we should do away with.

ytpe2r5bxkn0c1

KyussB wrote: »

Not really, the taxed income would go into the pension fund, and then the gains can just be subject to Capital Gains tax - as they should be. The income would be getting taxed only once, and the investment gains would be getting taxed separately.

No reason to treat it any differently to any other kind of investment.

You're missing the essence of a pension fund. At what point do you calculate the CGT? Annually, monthly, at first pension drawdown? Am I drawing down the initial tax paid investment or the gains - as the investment is ongoing even after retirement, It's a form of income quite distinct from investment gains.
But, you'll not be convinced I'm sure. As it stands the system benefits all tax payers. I wasn't a high earner but benefitted from being able to invest tax free in a pension fund that make me considerably well off in my old age. Without the tax benefits I could not have afforded the level of payments I did and would be suffering for it right through my retirement.

ytpe2r5bxkn0c1

KyussB wrote: »

Sounds like another tax subsidy that we should do away with.

Ah Goodnight.

This is obviously just a bugbear and not open to discussion.

KyussB

McGaggs wrote: »

I'm not rich and powerful, and i have a pension.

Most people get much more back than they out in, it is rare that anyone gets less out. All these notions that loads of people have lost everything seem to come from DB schemes being underfunded when an employer goes under.

It'd be difficult to find a pension 8nveatmwnt that managed to exclusively fund wars and climate change.

A market crash won't wipe everyone out. There's never been a stock market crash with 100% losses...

Excusively? That's some fairly extreme goalpost narrowing there.

KyussB

McGaggs wrote: »

The justification for the tax relief, which is mainly just a tax deferral, is that without it pensions would be taxed twice.

No, income and investment gains would just be independently taxed - as they should be - not double taxed.

KyussB

GreeBo wrote: »

Why did he still have it in volatile funds so close to retirement?
Pensions 101 tbh

and its far, far, FAR more likely "to be fine" than a complete waste of time.

See everyone with a pension is expected to be a finance expert now as well. Then when *shock* obviously they're not - they're to blame individually for the pension funds mismanagement - not the people in charge of the pension fund, often raking in a nice percentage-based fee (compound interest certainly works great for the fund managers, eh...).

KyussB

Metroid diorteM wrote: »

What’ll “Pensions 101” be in the year 2050? I’ve seen the government tax rules seriously change even during my decade or so of work.

It’s like insurance. Gambling basically.

Don’t ask people in this thread. Ask old people. They know. You’ll be shafted by some wise ass. Guaranteed.

Don't worry, you can be assured your money will be protected and managed safely, by those who consider ethics to be a 'childish' concern.

KyussB

Emmie Sparse Starlight wrote: »

You're missing the essence of a pension fund. At what point do you calculate the CGT? Annually, monthly, at first pension drawdown? Am I drawing down the initial tax paid investment or the gains - as the investment is ongoing even after retirement, It's a form of income quite distinct from investment gains.
But, you'll not be convinced I'm sure. As it stands the system benefits all tax payers. I wasn't a high earner but benefitted from being able to invest tax free in a pension fund that make me considerably well off in my old age. Without the tax benefits I could not have afforded the level of payments I did and would be suffering for it right through my retirement.

When you liquidate the investment, same as CGT normally works.

Doesn't matter if it's all at once, or just a little bit at a time - it's the same.

So you're saying without the tax benefit, you'd be suffering in your retirement due to not having an adequate pension?

That just says to me that such a private pension isn't such a great deal after all, unless the government is subsidizing it by giving you a tax break...

I don't actually feel that way - it's pretty good that you've done that well on a pension, definitely glad for you - it's just all the posters earlier (not yourself of course) who were dead set against a proper state funded public pension, are simultaneously loving this state funded tax relief on the private pensions they're touting.

I wonder how big the tax subsidies are overall, to private pensions...perhaps even enough on its own, to make the faux 'pension crisis' disappear overnight...

Metroid diorteM

Emmie Sparse Starlight wrote: »

I'm almost 76. Is that old enough? A pension was the best decision I ever made. My pension enabled a retirement with more than sufficient to enjoy life and never have to worry about money. I can buy a new car every couple of years, holiday, socialise etc to my heart's content. Things I couldn't do on the state pension.
So, ask away. What exactly do you want to know?

Happy for you man. Thanks for posting. I don’t like to be negative about this stuff either so it’s nice to hear about an alternative outcome.

[Deleted User]

Varta wrote: »

There are people on non-contributory pension who worked and there are also people who couldn't work that receive it. But your attitude just shines through. You have no problem yourself taking a handout from the state towards your private pension.

none of the words you use seem to mean what you think they do.

[Deleted User]

KyussB wrote: »

Don't worry, you can be assured your money will be protected and managed safely, by those who consider ethics to be a 'childish' concern.

every single post youve made in this thread has been childish. youre on some sort of strop across the site and its really not worth engaging with you in good faith because you couldnt engage any less nor with any less good faith. i have to ask what you get out of it, because you know little about pensions and care less about finding out, so why does your word count on this revive dwarf everyone elses?

KyussB

Before this pension thread I'd been posting mainly on the monolithic climate change thread.

Well it's good to know that you admit to engaging with me in bad faith! Perhaps you should consider if that is why discussions balloon into repetitive garbage - where something as basic as accepting ethics as a valid concern, turns into a shitshow, because posters can't engage in good faith, because they know full well that if they acknowledge ethics as a concern, that it buzz-saws through the vast majority of pension funds...

I'm the real deal, here - you see my arguments here or in any other thread - then, apart from the (what should be obvious) times I'm engaging in mild piss taking of others viwes - my arguments are my genuine views, and put in good faith.

[Deleted User]

everyone here engaged with you im good faith- yet another example of you playing "gotcha!" at every opportunity.

listen, if thats all you want to do, will you work on the brevity? its a huge pain to see you wreck any thread you get your claws into with the typing practice zero-content raving.

KyussB

It takes people responding to me - to e.g. say that nobody should be concerned about pension funds investing in unethical companies/industries etc., when I point out these issues - to keep that discussion going.

It's a perfeectly valid point and discussion, too.

I would be very happy for you to put me on ignore and not respond to me, if you're tired of my posts.

[Deleted User]

noted, i dont have ignore function on the phone alas but I'll put manual solution in place

Squozen

BailMeOut wrote: »

governments could also setup pensions so they are taxed going in but not out! USA have something callled a 'Roth IRA' that works that way.

Australia taxes 15% on the way in, 0% on the way out. And then the state pension is means-tested.

GreeBo

KyussB wrote: »

See everyone with a pension is expected to be a finance expert now as well. Then when *shock* obviously they're not - they're to blame individually for the pension funds mismanagement - not the people in charge of the pension fund, often raking in a nice percentage-based fee (compound interest certainly works great for the fund managers, eh...).

a) I'll again refer you to my earlier point about the issue largely being lack of financial awareness amongst the poor
b) Oh come on. What expertise is required to know that you dont keep a pension in risky funds as you get close to retirement? Seriously? Are you telling us that you didnt know that? Because if you didnt know that there is really no point in replying to you since you dont know the most basic thing about having a pension.

S.M.B.

A lot of the default funds you get added to here in the UK via auto enrollment would auto adjust as you approach retirement age anyway. Some feel they are a little too risk adverse from the offset but you can see why they prefer this cautious approach. Not sure what type funds will be available in Ireland.

Robert_Beach

Metroid diorteM wrote: »

My dad invested in his pension pretty much his entire working life. It just so happened that when came time to collect a few years back “oops” “didn’t you know there’s been a recession?”. Come back in 10 years or if you really want it now we’ll give you 30% the value.

I have a pension but my parents think I’m nuts after what happened to them.

I’ve little faith in governments in the decades to come sadly.

It could be fine but it could just as well be a complete waste of time. There’s no predicting with the human race.

Boom, and what you've been subject to is exactly what will be the case in a few years.

"Oh you didn't invest in the right index? Haha! What a moron, foodbank is over there"

Are we really heading towards a dog eat dog society, where the old are thrown to the wolves for making the wrong investment, sorry I meant gamble, that the government forced them into making?

As said earlier, I know old people who have been in the same boat. At least they have the state to back them up... for now.

Pensions are a scam for the ordinary worker, keep well away from them. They're only for rich and high earners to avoid the tax man.

Robert_Beach

Listen lads if private pensions are so good, and so much better than a state safety net, then how come we don't similary have a private betting, sorry investment, led safety net for our dole? Why shouldn't I get a tax break on investments to be made for monies that could only be accessed when I'm out of work? Surprised the financial snakes haven't jumped on that

Squall Leonhart

There's an element of talking to the wall here. It is pointless engaging with some people when they don't want to learn and flat out refuse to appraise a situation objectively.

The J Stands for Jay

KyussB wrote: »

Sounds like another tax subsidy that we should do away with.

Do you think that all costs of employing staff should not be an allowable expense for corporation taxm

The J Stands for Jay

Robert_Beach wrote: »

Listen lads if private pensions are so good, and so much better than a state safety net, then how come we don't similary have a private betting, sorry investment, led safety net for our dole? Why shouldn't I get a tax break on investments to be made for monies that could only be accessed when I'm out of work? Surprised the financial snakes haven't jumped on that

We do, it's called having a job and the tax breaks are called tax credits. Also, you can buy 8ncome protection to pay you if you lose your job.

The J Stands for Jay

KyussB wrote: »

Excusively? That's some fairly extreme goalpost narrowing there.

Well, we had to fit them into the stadium somehow.

GreeBo

Robert_Beach wrote: »

Listen lads if private pensions are so good, and so much better than a state safety net, then how come we don't similary have a private betting, sorry investment, led safety net for our dole? Why shouldn't I get a tax break on investments to be made for monies that could only be accessed when I'm out of work? Surprised the financial snakes haven't jumped on that

What "investments" are you making while out of work?
Call me crazy, but if you can afford to be making investments then perhaps you should not be receiving the dole?
You have pretty blatantly just proven that all you are after is free money that someone else provides...which is kinda ironic since a pension is free money:cool:

Robert_Beach

GreeBo wrote: »

What "investments" are you making while out of work?
Call me crazy, but if you can afford to be making investments then perhaps you should not be receiving the dole?
You have pretty blatantly just proven that all you are after is free money that someone else provides...which is kinda ironic since a pension is free money:cool:

You've misunderstood. If private provision is all well and good, and leaving it to the markets is great, as ye are all saying, then the following stands to reason:

As a worker, instead of giving the government money to fund the dole, we should get a reduced tax and instead be directed to put that money into investments (gambling) and that money would only be accessible in the event of a person losing their job. A private dole if you will.

How come we can all agree on a safety net for workers in the that case, provided by the state, but when it comes to old people it's Thaterchism at its finest?

KyussB

GreeBo wrote: »

a) I'll again refer you to my earlier point about the issue largely being lack of financial awareness amongst the poor
b) Oh come on. What expertise is required to know that you dont keep a pension in risky funds as you get close to retirement? Seriously? Are you telling us that you didnt know that? Because if you didnt know that there is really no point in replying to you since you dont know the most basic thing about having a pension.

You know full well I was referring to the average person - and most people are just going to let their earnings accumulate into a pension fund, and never think about it much again until retirement.

Most people are not financial experts - and if they need to be to avoid being screwed - then they should be putting their money somewhere else.

KyussB

McGaggs wrote: »

Do you think that all costs of employing staff should not be an allowable expense for corporation taxm

That line of discussion started, from it being pointed out that employer contributions to a pension provide more of a tax break to the company than paying wages - if that is true, I'm saying it should be treated the same as salaries.