If lump sum entitlements were scrapped it would be applied to civil service pensions too so the Government would have absolutely no chance getting that one through.
Well, as a financial product, it’s benefits should be evaluated based on financial metrics.So far it is clear that a lot of the benefit being outlined is based on the perceived tax advantages and that pension won't be heavily taxed on exit.
Thoughts:
Over a lifetime while a pension pot can grow enormously the amount paid out montly appears to be low.
Based on the above I am now thinking of lowering my employee contribution to perhaps only contribute enough to take advantage of employer maximum contribution. My overall thoughts are that pensions are not risk free and based on the above figures the value for money is questionable.
Would love to hear your thoughts on this?
I have said before that the financial advice industry makes me uneasy in many of its doings, providing projections based on less than guesses is one of those things.
The Central Bank tells the life companies what format these projections are to take. The assumptions used will have a massive impact on the figures at the end, especially over the long term.
But to give you a real life example, a client of mine invested €30,000 24.75 years ago. It's worth just over €100,000 when I did the review for him last week. That's a return of 5% per annum over the period which includes 2 pretty bad market crashes.
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