Pondrew wrote: ↑Sat Dec 30, 2023 12:41 am
No offence Tim, but you public sector workers and your (mostly) final salary pensions are living in a different world to rest of us.
There is no comparison of a public sector pension scheme and a private one. They are chalk and cheese. Council pensions are managed 'in house' by dedicated teams of Council employees.
Only the very very wealthy private sector workers could afford to retire in their fifties. As said, no offence meant, but you have no idea about the 'real world' when it comes to pensions.
Public sector pensions are funded by the taxpayer, the rest of us have to fund ourselves (and rely on global markets).
I agree the Pensions are very different, Defined Benefit schemes put the risk on the employer (Rolls Royce was once regarded as a Pension Deficit Company with an Engineering arm), Defined Contribution (DC) relies on market returns and the investment choices of the individual. And Historically these have been poor, partly constrained by choice of Funds, but also personal choice. People tend to ignore their pensions. When I was a Pension Trustee we offerred members the option of carrying on with the default 'With Profits' fund (which were in the press as poor performers) or moving into a range of market options. less than 2% of people changed. The dotcom bust was recent news, and the 2008 Financial Crash was in full swing, so caution and inertia prevailed. As it turns out over the last 15 years the Global fund increased several fold more than the With Proifits one.
But you are only partly right, there is much more to the different schemes.
Local Govt pensions are not taxpayer funded, although they are pretty much the only Public Sector ones that aren't.
Secondly they aren't managed 'in house' by Council employees. Sure they have an administration section, same as any pension provider, but the Assets are managed by large investment houses who historically have made a lot of money for mediocre performance, pretty much like the Private sector
Lastly, anyone going at 58 would get a 35% or so reduction in their pension according to the reduction tables. Annoyingly I took mine 9.5 years early in Jan last year when the reductions for early retirement were higher, although I did get a 10% inflation linked increase
And it is the last part that is the biggie, once in payment a DB scheme is risk free, and buying an index linked Annuity from a DC pot is expensive. The flipside is with a DC scheme these days you get the choice of Drawdown and keeping your pot.
However another thing to note is the salaries, In 2002/3 my wife was offerd double her Council salary to move to a Private firm doing PFI bids, although this was unusual. I took a 30%+ paycut to move to Local Govt, but at 37 hours rather than 40, more holidays, and their pension cotribution on top of my 6% being worth circa 20% (that was the pension contribution required from the employing company of TUPEd out employees to keep them in the LGPS), it made the hourly rate about the same. And there's the difference, if everyone in the Private Sector chucked 26% of their salary into Pensions every year, then early retirement would be much more common. But that doesn't happen very often.
I only joined the Council in about 2008 at 42, did 10 years but very sensibly transferred in my previous 5 year pot of DC Pension (which I'd been putting 20% into anyway) which I think turned out to be a good idea. However the bulk of my income still comes from 'Global Markets', PEPs and ISAs maxed for decades before Pension Freedom was an option (ISAs are taxed on the way in, Pensions on the way out, and I was damned if my hard earned savings were going to go on an annuity). I was also lucky to have a father who invested himself, and I too took an interest.
But to drag think back to your original question.....
Pondrew wrote: ↑Thu Dec 14, 2023 11:43 am
I have a 100% private pension, as I have worked for myself forever.
Suddenly in the last couple of months it has started to rise quite sharply again; I am talking 1% in a week!
Does anyone know why this would be? I have no idea how this financial wizardry works. I don't see the world economy suddenly getting stronger and certainly not the UK.
Sounds about right. Vanguard to a Global Tracker fund (actually an ETF) which much of my money is invested in. The ticker is VWRL, and there is an accumulation version VWRP. This fund effectively replicates every share in every market, it holds shares in 3700 different companies. The UK is a small part of the Global economy and has performed very badly over the last 20 years, hence a lot of UK centric Pension pots have not fared well. You can look at this chart and see how it fluctuates, set the chart style to 'percentage', it often changes by 1% or more in a day.
https://www.hl.co.uk/shares/shares-sear ... are-charts
One of the advantages of managing your own money is it is easy to see what it is worth, the disadvantage is seeing your wealth drop by a year or so of takehome pay the day after the Brexit vote or by 3 years in a fortnight during the Pandemic, but if you can watch a year's money come and go in a week and not get too bothered, then self management is a lot better than paying some Fund Manager or IFA to do it for you
Paul
depending how much total interest I've accrued on savings. Simply put there out to get you no matter how hard you've worked 
No I don't really have a clue on Pensions, think all I was trying to say is if you have any kind of pension lump sum you're thinking of cashing in do look at the tax implications carefully and get financial advice if you can which I didn't on the private pension I had. It was still a shock how much you pay out.
