Fees eroding pensions

[MadImmortalMan]

When they say "customers" are they talking about employers trying to set up pensions for their employees? It sounds like they mean individuals in parts.

[Sheilbh]

When they say "customers" are they talking about employers trying to set up pensions for their employees? It sounds like they mean individuals in parts.

I think both.  Many people have a workplace pension - but less than half now given the dreadful returns over the last few years - but a lot of people (6 million) also have a private pension of their own.

[MadImmortalMan]

When they say "customers" are they talking about employers trying to set up pensions for their employees? It sounds like they mean individuals in parts.

I think both.  Many people have a workplace pension - but less than half now given the dreadful returns over the last few years - but a lot of people (6 million) also have a private pension of their own.

Are the private ones actually pensions (defined benefit) or are they just retirement investment accounts? I'm trying to figure out if there is a language difference here.

[Sheilbh]

Almost no pensions here are defined benefit.  There's a couple of big employer schemes (like the BBC) that are but they're almost all closed.  The overwhelming majority of workplace and private pensions are defined contribution.

[Gups]

If I start investing on my own behalf, however, don't I lose the tax break and the company matching of pension contributions?

You can protect it in a ISA if you are saving less than £11k or so a year. If the company is matching your contributions then you should stick with them of course.

But the big tax break is that you don't pay income tax on the money you put into a pension. If you pay 40% on that income, tyou get an immediate, upfront 67% return on you investment. An ISA can't give you that since you are using post-taxed income.