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BoldAsBrass

Pension Gamble

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I have got close to retirement age and, despite working long and hard all my life (mostly self-employed), with a few business start-ups on the way, I have only ever earned 'a living' and have not had the funds to provide a pension. My assets are my house and I need that to live in. So, I have a SIPP with about 25k worth of Tesco shares (recent ouch) in there. Been there for 10 years - worth about the same as when I bought them.

 

So, hoping to retire one day - let's say in 6 years time when I become eligible for the state pension.

 

My thinking is that the 25k in the pension pot is basically worthless - so I might as well gamble with it.

 

I'm thinking of selling the Tesco shares and plumping the lot into NatWest shares (ducks behind parapet).

 

What do you think? If they ever go back up above £2 my 25k would be worth, say, £250k and would buy an annuity that would make a sensible contribution to my retirement.

 

If I lose the lot - so what? Currently I'll be working until I drop anyway.

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I have got close to retirement age and, despite working long and hard all my life (mostly self-employed), with a few business start-ups on the way, I have only ever earned 'a living' and have not had the funds to provide a pension. My assets are my house and I need that to live in. So, I have a SIPP with about 25k worth of Tesco shares (recent ouch) in there. Been there for 10 years - worth about the same as when I bought them.

 

So, hoping to retire one day - let's say in 6 years time when I become eligible for the state pension.

 

My thinking is that the 25k in the pension pot is basically worthless - so I might as well gamble with it.

 

I'm thinking of selling the Tesco shares and plumping the lot into NatWest shares (ducks behind parapet).

 

What do you think? If they ever go back up above £2 my 25k would be worth, say, £250k and would buy an annuity that would make a sensible contribution to my retirement.

 

If I lose the lot - so what? Currently I'll be working until I drop anyway.

 

 

I agree. I have a similar amount in a ‘locked in’ pension from a previous life...

 

NatWest? Nah. Why not stick it in something with real fire, like silver wheaton (SLW) or royal gold (RGL) ?

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I agree. I have a similar amount in a ‘locked in’ pension from a previous life...

 

NatWest? Nah. Why not stick it in something with real fire, like silver wheaton (SLW) or royal gold (RGL) ?

 

 

 

I think this would be my route ! :D

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I'm also considering going down the SIPP-full-of-high-risk-stuff avenue.

 

I'm approaching 40 (so probably another 50 years before i'm entitled to the state pension) and pension pot has jsut about kept it's nominal value in the last 5 years (despite thousands being thrown into it).

 

The way things are going i expect them to remove the higher rate tax relief in the next year or so (at which point i'll stop paying into it) so i'll be just playing with what i have

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I have got close to retirement age and, despite working long and hard all my life (mostly self-employed), with a few business start-ups on the way, I have only ever earned 'a living' and have not had the funds to provide a pension. My assets are my house and I need that to live in. So, I have a SIPP with about 25k worth of Tesco shares (recent ouch) in there. Been there for 10 years - worth about the same as when I bought them.

 

So, hoping to retire one day - let's say in 6 years time when I become eligible for the state pension.

 

My thinking is that the 25k in the pension pot is basically worthless - so I might as well gamble with it.

 

I'm thinking of selling the Tesco shares and plumping the lot into NatWest shares (ducks behind parapet).

 

What do you think? If they ever go back up above £2 my 25k would be worth, say, £250k and would buy an annuity that would make a sensible contribution to my retirement.

 

If I lose the lot - so what? Currently I'll be working until I drop anyway.

 

A brave and honest post......

 

Remember very few on here are actually (cough) qualified / permitted to give investment advice (as such). ;)

 

 

I like Doug Casey's mantra of taking big risks with 10% of your liquid wealth, although 20% may make more sense here.

 

I am ultra clear in my own head when I either trade OR invest - quite different.

 

Bank junk was worth a punt in 2009, does your thinking now reflect a top rather than a bottom here?

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A brave and honest post......

 

Remember very few on here are actually (cough) qualified / permitted to give investment advice (as such). ;)

 

 

I like Doug Casey's mantra of taking big risks with 10% of your liquid wealth, although 20% may make more sense here.

 

I am ultra clear in my own head when I either trade OR invest - quite different.

 

Bank junk was worth a punt in 2009, does your thinking now reflect a top rather than a bottom here?

 

I have no expertise or knowledge - here's my (no doubt daft) thinking.

 

We're in a mess, NatWest shares have been down to less than a tenth of what they used to be (can't seem to find a chart that goes back beyond 5 years, but they were over £2 - maybe they were much more in the past? don't know) ... and I know their investment arm just lost money but, apparently, retail banking has just turned in a £2 billion profit. All other things being equal (i.e. no forthcoming major crisis) I guess that, one day, we will move forwards a bit and things will slowly return to normal. The goverment will sell its shares - probably in tranches - and institutional feckwits who know as much about things as I do - will buy the share for its dividend and perceived safety and, drip, drip, drip - over 5 years (10, 20? who knows) the share price will recover ...

 

As I say, no doubt a load of nonsense from me. I'll be pretty pissed off if in 6 years time NatWest shares are up to £5 and Tesco's haven't moved.

 

Or I could leave them in Tesco shares and they'll be worth the same in 10 years as they are now and as they were 10 years ago. I really NEED to take a risk - 25k in my pension pot in x years time will buy me half of feck all. So, no point sitting and waiting for Tesco shares to go up.

 

I'm not looking for investment advice - well I am - but really - people on here know a lot about finance and such - mine is just a 'what would you do?' enquiry really.

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I agree. I have a similar amount in a ‘locked in’ pension from a previous life...

 

NatWest? Nah. Why not stick it in something with real fire, like silver wheaton (SLW) or royal gold (RGL) ?

 

And if you had to pick one? My SIPP provider increases charges - a lot - if you hold more than one share.

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£25k is £25k and is a lot of money to anyone - it is certainly not "worthless".

 

Obviously there is great risk in chasing the proverbial 10-bagger...

 

If you already own your home why not look to release some equity and start your own little BTL (maybe in the US?) with rates so low you could fix for 5 years and they would be 50% paid off in that time.

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£25k is £25k and is a lot of money to anyone - it is certainly not "worthless".

 

Obviously there is great risk in chasing the proverbial 10-bagger...

 

If you already own your home why not look to release some equity and start your own little BTL (maybe in the US?) with rates so low you could fix for 5 years and they would be 50% paid off in that time.

 

Thanks (and to others) for your response.

 

25k in pension terms is, far as I can see, pretty much worthless. What would you get - 4% annuity - £1k a year? Not nothing, but not much.

 

Say I take a huge risk and lose half of it - so what? £500 a year instead of a grand.

 

No, a risk has got to be taken.

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No, a risk has got to be taken.

How about doing something more fun / imaginative with it? About a quarter of my funds are lent to friends for their business ventures etc, to avoid their having to take out bank loans. There's a friend who runs a drinks business: I lend him a few thousand to buy sloes (from Bulgaria), and he repays me with interest when the sloe gin is sold; I helped fund solar panels on his warehouse roof, and now enjoy a steady income (think pension) from the government grant; another friend has set up an auction house, and I'm a share-holder in that -- no income yet, but the possibility of real wealth (or alternatively losing all the money) later; another friend went bankrupt and now finds loans ridiculously expensive: I bought him a car on informal h-p (at an agreed rate of half what the bank would charge) and again have a steady little income off that.

 

It's such fun having money (now all the children are through university), and £25k sounds like just the right amount to play with: it's enough to be interesting, and to make a difference with, but very little in annuity-buying terms. With your "I can afford to lose it" attitude, which I have too, there's real pleasure to be had in helping people, in speculating ... and in combining the two.

 

[You can even buy nice gold coins, watch their value go up and then sell them: I've spent about £20k doing that, and have got all my money back, and still have about £50k worth of bullion left. The gold price may well yet double again before you retire! On the other hand I avoid speculating in buy-to-let on ethical grounds, but I've arranged some equity-release with two different elderly relations, and given them twice what the equity-release company was offering, and look forward to a nice capital appreciation when I retire ... as long as they die first!]

 

Have fun!

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How about doing something more fun / imaginative with it? About a quarter of my funds are lent to friends for their business ventures etc, to avoid their having to take out bank loans. There's a friend who runs a drinks business: I lend him a few thousand to buy sloes (from Bulgaria), and he repays me with interest when the sloe gin is sold; I helped fund solar panels on his warehouse roof, and now enjoy a steady income (think pension) from the government grant; another friend has set up an auction house, and I'm a share-holder in that -- no income yet, but the possibility of real wealth (or alternatively losing all the money) later; another friend went bankrupt and now finds loans ridiculously expensive: I bought him a car on informal h-p (at an agreed rate of half what the bank would charge) and again have a steady little income off that.

 

It's such fun having money (now all the children are through university), and £25k sounds like just the right amount to play with: it's enough to be interesting, and to make a difference with, but very little in annuity-buying terms. With your "I can afford to lose it" attitude, which I have too, there's real pleasure to be had in helping people, in speculating ... and in combining the two.

 

[You can even buy nice gold coins, watch their value go up and then sell them: I've spent about £20k doing that, and have got all my money back, and still have about £50k worth of bullion left. The gold price may well yet double again before you retire! On the other hand I avoid speculating in buy-to-let on ethical grounds, but I've arranged some equity-release with two different elderly relations, and given them twice what the equity-release company was offering, and look forward to a nice capital appreciation when I retire ... as long as they die first!]

 

Have fun!

 

Sounds great - but I'm pretty sure I can't do most of those things with the money in a SIPP?

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Just this weekend a sister with a similiar situation asked me what she should do with her 30,000 pension. She intuitively knows it won't go far in the future, and that it might be best if she 'threw the dice' so to speak. For what it's worth, I told her to put a fair chunk onto AGQ [leveraged silver ETF]. Sit on it for 2 or 3 years then sell it on a silver spike [the exit plan]. She worked out that if bullion did what many think it will this would pay off her mortgage... and maybe enable her to quit work a little earlier.

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Am I correct to be reading this thread as a cautionary tale about wasting money on a pension?

 

Perhaps would be sensible to ask how much has actually been paid into it before trashing the whole concept, don't you think?

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FWIW - Van has been, for many years - "the thinking man's bull" - and worth considering

 

Indeed. I remember listening to stories on the radio back in the early/mid-90s about houses "changing hands for a few thousand dollars negotiated in the pub."

Basically people just wanted to get rid of them as fast as possible. I would wager that some US housing markets have just about reached that sort of capitulation stage now.

 

 

Otherwise, another option - if you were really seriously about trying to get a 10-bagger - would be to find something that is guaranteed to go bust when the bond bubble bursts (eg akin to Fanny, Freddie in 2008), pick the top, and then short the hell out of it and double down every time the price halves. Shorters can make a killing this way, but it's also easy to lose your shirt... needless to say this is not to be attempted for the widows and orphans fund.

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Just this weekend a sister with a similiar situation asked me what she should do with her 30,000 pension. She intuitively knows it won't go far in the future, and that it might be best if she 'threw the dice' so to speak. For what it's worth, I told her to put a fair chunk onto AGQ [leveraged silver ETF]. Sit on it for 2 or 3 years then sell it on a silver spike [the exit plan]. She worked out that if bullion did what many think it will this would pay off her mortgage... and maybe enable her to quit work a little earlier.

 

Thanks for your reply ... do you mean ARIAN SILVER (AGQ.L) ?

 

Sorry to be so ignorant - ETF ? Exchange Traded Fund - don't understand - a fund with just the one share in it? Can I buy EFTs within a SIPP?

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Perhaps would be sensible to ask how much has actually been paid into it before trashing the whole concept, don't you think?

 

About 25k has been paid in - mainly between 1999 and 2002. It's worth about the same now.

 

My take on it is that any pension these days which is managed by people who just buy the usual blue chip shares on your behalf is not very likely to make any money. The only feckers who will make any money is the pension fund manager and the brokers.

 

And if, like me, you have a SIPP, you need to take a chance. There was a time (in the late 90s) when I thought - Tesco are a sure bet, they just keep getting bigger, they're expanding in the USA and China, their shares will go up by a factor of 4 (with a bit of luck) over the next 15 years - my fund will be worth 100k - I'll get an annuity at 6% and at least have an extra 6k pension. As I say, that was the thinking - 13 years on and the shares are the same price as they were 13 years ago.

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Perhaps would be sensible to ask how much has actually been paid into it before trashing the whole concept, don't you think?

 

Jesus, I only wrote one line. Didn't exactly trash it. That's why I asked, "am I correct?" And OP noted that it was worth the same now as it was when he paid in.

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About 25k has been paid in - mainly between 1999 and 2002. It's worth about the same now.

 

 

Hmm.. yea, unfortunately that is what happens when you do your buying at the peak of a bubble.

Hate to say it but if there was a "how not to invest for retirement" guide you would probably tick every box:

 

- Not starting until 16 years away from retirement

- Buying at the top of the greatest equity bull market in history

- No diversification

- No cost-averaging when the market is cheap

- Sinking everything into a well-loved blue-chip

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Hmm.. yea, unfortunately that is what happens when you do your buying at the peak of a bubble.

Hate to say it but if there was a "how not to invest for retirement" guide you would probably tick every box:

 

- Not starting until 16 years away from retirement

- Buying at the top of the greatest equity bull market in history

- No diversification

- No cost-averaging when the market is cheap

- Sinking everything into a well-loved blue-chip

 

Admonishment taken.

 

To be fair, I did start pensions with Equitable Life (one for me, one for my wife) in the early 90s when I was about 40.

 

Paid in what I could afford - £75 a month at first, moving up to £150 a month in due course. Then, of course, Equitable decided to let us know the whole thing had been a sick joke.

 

And, younger than 40, I spent my money on buying a house, bringing up two kids and just living life. Never had the luxury of me paying 4% into a pension and an employer putting in 8% - and ending up on a guaranteed 66% of my final salary. If only ... mind you, on the other hand, the idea of working for the same company for 40 years would have had me on suicide watch.

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A few questions....

 

1. You say you own your house, is it a possibility that you can trade-down to release some money, reduce your council tax, insurance, etc?

2. You say you worked mostly self-employed? Have you went to HMRC and inquired if you have enough National Insurance contributions to qualify for the old-age pension?

3. Have you any other assets at all that can help you in retirement, would your wife have a pension, or any assets herself?

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