Each month we publish the best comments, emails and letters from our readers. Here are the best of January 2018.
Is financial advice worth it?
Moneywise says: One in two financial advisers ‘fire’ customers with less than £50,000, according to a recent report. We believe you should always seek advice if you are uncertain, but one reader argues that advice is not always necessary…
I am surprised to read that people with less than £50,000 net assets would even consider paying for financial advice. The service shouldn’t even be available to those with less than £25,000 in my view.
Although research shows that those who receive financial advice are on the whole better off (I read that in a Moneywise article too), It’s far more satisfying to spend the time and effort researching things yourself and making your own decisions; any gains made in this way will be much more pleasing.
If anyone has less than £50,000 net assets, I’d suggest subscribing to the Moneywise email newsletter, which is free, and reading the expert articles. By doing this alone, you can put together your own plan to manage your spare cash and existing debt; you don’t need to pay someone to tell you. Also seek advice from family, friends and colleagues. You’ll see that you’ll quickly become more efficient at managing your own portfolio.
CR/VIA ONLINE COMMENTS
I feel short-changed by my final salary pension scheme
I started working life in 1968, with the Civil Service, which offered a ‘non-contributory’ pension scheme. At 21, I didn’t think about pensions much – though the iconic Pearl Assurance advert of the time, ending with the memorable line: “Without a pension I really don’t know what I shall do!” resonates with me today.
I stayed in the civil service for only three-and-a-half years, moving for family reasons. But I had no reason to think that my employment would count for nothing when it came to retirement.
The Civil Service pension was effectively a deferred salary scheme, but it turns out this money was only to be enjoyed by those who stayed for long enough in their jobs. Inevitably, this will have discriminated against women for obvious reasons. Women already have considerably smaller pension savings than men, so the scheme rules at the time are particularly galling for those of us doing our best to provide for our futures. The rules have since changed. However, this is no help to the many – men and women – who, for whatever reason, accrued insufficient years.
Moneywise says: If you thought you qualified for a defined benefit (final salary) pensions scheme, only to find at 60 that you didn’t work enough years for eligibility, Moneywise wants to hear from you. Please email your story to firstname.lastname@example.org
On the same wavelength as Jeff Prestridge
Sage advice, Jeff [referring to Moneywise columnist Jeff Prestridge (right) and his January 2018 column on three ways to get rich in the new year]. It sounds as if you’re following a similar mantra to that which I have followed: when the mortgage is paid off, that’s when you can really start to save.
The scope wasn’t there for large Isa savings until too late for me, but I had a company pension and saved as much as I could into a Sipp [self-invested personal pension] before retiring aged 53, two-and-a-half years ago.
The Sipp had been ticking along at an average 5%, but since being actively managed in retirement, with gains over 30%, it has spiralled out of control and I fear I will now soon do what I thought was impossible... breach the £1 million lifetime pensions allowance and be hammered for tax.
Had the higher Isa allowances been available to me, I could have avoided this for much longer, even indefinitely. So I mention it as a cautionary tale.
I wish you well in your quest. Retirement comes highly recommended if you’ve put in the preparation. But don’t expect to fully settle into it much before two years is up.
Mount Ngauruhoe sounds a nice idea for Christmas next year. I’ll take your recommendation, thanks! A prosperous 2018 to you and all at Moneywise.
XR/VIA ONLINE COMMENTS
Moneywise says: Shoppers have been warned by HM Revenue & Customs (HMRC) to beware of a phone scam that has conned vulnerable and elderly people out of thousands of pounds.
The scam sees fraudsters coldcalling victims impersonating HMRC. Scammers tell victims that they owe large amounts of tax, which they can only pay off via digital vouchers and gift cards, including Apple’s iTunes. For help creating strong passwords, see How to create a password to give you peace of mind.