Pensions. Are they really worth it?

[moylan1]

excuse my ignorance but... are pensions really worth it?

i have 3 pensions. 2 are RAC type (one is a quinnlife) and the other is a company pension. Apart from the quinnlife, none of the others have made any money over the seven years and my total premiums exceed the value of the funds. Given the fact that the best i can expect a fund to grow by is 6 or 7% a year, all of this seems to be taken by fees charges and commissions. Also, eventhough i get a 42% tax relief on my contributions that has to be repaid once i retire, surely any benifit of the relief will be sucked away by fees and charges.

Am i completely disillusioned or do i have to look elsewhere to look after my retirement.

 

[ClubMan]

i have 3 pensions. 2 are RAC type (one is a quinnlife) and the other is a company pension. Apart from the quinnlife, none of the others have made any money over the seven years and my total premiums exceed the value of the funds.

...

all of this seems to be taken by fees charges and commissions.

...

surely any benifit of the relief will be sucked away by fees and charges.

What charges are you paying on each pension?
What funds are they invested in?
Maybe you are invested in inappropriate funds?
Maybe you have simply bought into expensive pension plans and need to shop around for better value?

Given the fact that the best i can expect a fund to grow by is 6 or 7% a year

Where do these figures come from? If from the illustrative projections included with the initial documentation and/or annual statements not that these are simply illustrations and have nothing to do with what might happen or what has happened.

Also, eventhough i get a 42% tax relief on my contributions that has to be repaid once i retire

No - you can choose to take a tax free lump sum of 25% of your pension fund at retirement. You might not pay high rate tax (whatever that will be in the future) on pension income from the remainder.

Am i completely disillusioned or do i have to look elsewhere to look after my retirement.

Everybody should be aiming to build a diversified portfolio of savings/investments that match their short, medium and long term needs. As such pension funds (usually invested largely or solely in equities but possibly also in other assets) are one part of such a solution. Dismissing them because of recent poor performance (which could possibly be partially explained by high charges and/or inappropriate fund choices) would be rash. A bit like all those people who said never again to equities because of eircom.