Let’s get creative about pensions..

Yeah, pension provision, thinking about an income post retirement when the immediacy of life means thinking about current income takes precedence, relying on an oscillating stockmarket which is hard to predict and measure, sick of charges from insurance companies eroding the value of your money, unhappy with commission levels that insurers used to pay brokers like me, fed up with contracts that dont do as they say on the tin, well who can blame you! Even I, with 38 years experience, increasingly find the appeal of conventional pensions less alluring than I once did. True, you get tax relief on the premiums you pay, and true, if you only ever got this relief with a growth rate that outstripped inflation, you would always create a fund worth more than you contributed. You could NEVER guarantee a growth rate that the tax relief equivalent gives you month after month. And yet this still doesnt do it for me; you have to rely on so, so many variables. You have to hope that annuity rates will be high when you retire if u elect the annuity path, you have to hope that growth rates are sustainable if you elect drawdown and many more similar issues. And of course, you dont broadly speaking, have total control of the accumulated fund to do with as you want.Now I’m not saying there isn’t a place for traditional pension saving, I mean, you cant ignore the possibility you may and will hopefully survive until you retire and when you do, you wont want to be immersed in a sea of penury. No fun being retired if you cant afford a pint or a cruise or whatever your aspiration may be. All I am saying it is worth considering alternative approaches.For example, this country has an anal obsession with property as the world and his wife knows; and yes, I am sure you have seen the cliched and platitudinal view that property can be a great pension. Well, I am not trying to re-write basic economic tenets, property can be but not if it is approached on an amatuer footing. Investment properties, aka buy to lets, rarely makes the average Joe a fortune overnight. Indeed, this is why many fail since they fail to remember why they bought the property in the first place. They suffer an affliction that pervades many echelons of society, not least politicians, that is, short termism. If it were that easy to make money off the back of a property purchase, then everyone who could would be doing it. Amateurs look at the rate on the mortgage if there is a mortgage and then look at the rent, and if they are making a modest profit on the rent, they oftimes view it as current income. This is a spurious approach especially if it is combined with an interest only facility since there will be undeniable problems throughout the course of the ownership which will render the benefits secondary and seemingly not worth it. The answer is not to give up but to modify the perception. It is long term. It is a future conduit of income….If you would like me to continue with this article, let me know. i promise i will not contact you on the back of your contact details. Frankly, I am seeking feedback on whether this article is of any interest to anyone. No nefarious intent!

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