Exposed: The 7 Savage Attacks On Your Pension!

Exposed: The 7 Savage Attacks On Your Pension!
Galapagos by Julian Cohen. Why?

As the clock ticked past midnight into January 2000, and we looked forward to a prosperous new millennium, little did we know how awful it would turn out to be for our pensions!

If you've ever had a sense your pensions haven't been growing as quickly as you'd like, chances are you were right!

In the last 13 years, pensions have come under sustained attack from seven major perils that have resulted in nothing short of total disaster!


ATTACK 1: The
Broken Stockmarket

15% of your money
gone up in smoke

At the end of 1999, the FTSE 100 Index, representing the top 100 UK companies, stood at 6,930.  By the end of 2012, it had plummeted to 5,886.  13 years and nothing to show for it.  In fact, less than nothing!

If you’re not concerned about this, think again.  If you have a pension of any sort, chances are some or all of your money is invested in the top 100 UK companies.  In reality, most of us have been affected.


ATTACK 2: The Shocking
Contribution Theft

Up to 80% of your
savings have vanished

The BBC’s Panorama exposé on pension charges found companies ‘stealing’ the majority of your contributions in fees and commissions.  Thought your savings were going towards your retirement? You couldn’t be more wrong.

In a statement to the BBC, HSBC told Panorama its personal pension offered "good value for money" and was "certainly not one of the most expensive pension schemes in the market."  HSBC supplied the figures and it’s standing its ground.  Outrageous!


ATTACK 3: The Constant
Threat Of Extinction

The loss of 100%
of your money

No matter how large, how well-established and how rich they might be, no business is immune to the ultimate disappearing act.  Going bust.  And if it does, the money you hold in its shares goes with it.

Being big is no protection.  Consider these spectacular failures.  Barings Bank, Enron, Woolworth, Pan Am, Compaq, RCA Records, Comet, Rangers FC, JJB Sports, Habitat, Borders, Pontin’s, Readers Digest, Allied Carpets, Lehman Brothers. And thousands more!


ATTACK 4: The Double-
Whammy Calamity

Your income could
be slashed to £0

In tricky financial times, when profits fall, business owners take the hit. Shareholder dividends are often the first thing cut.  But who actually owns the top 100 UK companies? It's probably you, through your pension.

To add insult to injury, when your dividend falls, the business is a less attractive place in which to invest.  So the share price falls too.  It's a colossal blow to the prospect of pension growth.


ATTACK 5: The Great
Retirement Swindle

Annuity rates have
fallen by almost 70%

When you hang up your boots, you’ll want a great return when you buy your annuity.  But with us living longer, and interest rates at an all time low, it’s had a catastrophic effect on the amount you could receive.

Your pension fund needs to be almost four times larger now to give you the same income you'd have received in 2000.  And if that’s not bad enough, when you buy an annuity, you give up your whole fund. Die early, and your annuity provider will profit massively.


ATTACK 6: You’re At
Odds With The Regulator

You're not getting lower
risk investment advice

The Financial Conduct Authority has a list of regulated and unregulated investments.  Advisers stick to regulated products, essentially limiting them to stockmarket investments.  And you know where that’s got us.

Property is unregulated, so it's rarely discussed as part of your pension planning.  Yet property is lower risk than the stockmarket and it can’t vanish into thin air, as many shares have done. There’s always a residual value in the bricks and mortar, and ultimately, in the land.


ATTACK 7: The Hidden
Destructive ‘Tax’

Inflation has devalued
your money by 46%

Inflation. The secret method of taxing you without your knowledge.  Governments love it as it devalues the national debt. It happens so slowly, you don't notice.  No forms to complete.  No taxes to add up. 

You may feel better off.  Increased earnings.  Rising property values.  But unless your money grows faster than inflation, you become poorer in real terms.  And that’s incredibly damaging to your future prospects.


Individually, any one of these perils can significantly damage your pension. But in combination, the effect can be catastrophic.

There are two things you can do about this

1. Do nothing

But don’t complain if you don’t have enough money to live on when you're retired. It’ll be far too late to do anything about it and you’ll only have yourself to blame.

2. Do something

Most of the problems occur because other people control your pension. The solution is simple. You need to take control. Thankfully, there’s a pension for this.

A ‘Self-Invested Personal Pension’
or SIPP for short

With a SIPP, you're the banker.  Subject to a few restrictions, you have the right to invest your money in almost anything that will deliver a profit.  And you can grant loans for almost any purpose too, earning great rates of interest in the process.  Choose property and you'll expose your money to less risk than the stockmarket. Remember this...

WARNING: If you invest in the shares of the top 100 companies, or you invest in massive stockmarket funds offered by major insurance companies and investment groups, it's unlikely you'll ever make a decent, real return on your money, for all the reasons given above.

You need to select opportunities where you can make real money. They could be property businesses, where something is being created from nothing, like a multi-room-let house from a single dwelling, or a hotel, or student accommodation. They could be businesses during their growth phase, where real value is being generated as the business expands. They could be environmental businesses, creating sustainable, profitable solutions to protect our future.

All these opportunities have one thing in common.  They all need money to help them get to their finished state. And if you supply the money from your SIPP or your cash, you'll share in the profit, which in most cases is substantial. Here are three examples which illustrate how to achieve a high return on your money, whilst fighting off those savage attacks indicated above.


Lend your money to a property professional

As the ‘bank’, it’s likely you’ll charge interest of between 7% and 10% on the money you lend.  That’s way ahead of inflation.  It’s massively up on recent stockmarket performance.  Your money is effectively invested in ‘bricks and mortar’, which has a residual value.  And if property prices crash and homes are repossessed, the rental sector will get stronger, protecting the loan interest payments for your pension.


Invest your money in a commercial property

If it’s the property in which your business trades, it could be a fabulous deal.  Instead of paying rent to a landlord, you’ll pay rent to your SIPP, which is received free of tax.  Your SIPP enjoys any property growth too, tax free.  If you don’t have enough money in your SIPP, you can either borrow a bit more, or combine resources with your colleagues, so you all share in the benefits.


Invest your pension in your own business

This goes way beyond taking control. Your pension can provide your business with money in one of three ways. It could buy the shares of your business. It could lend money to your business. And it could organise a 'sale and leaseback' of business assets. You're no longer dependent on external bankers and your other borrowing facilities are unaffected. It's fast to organise, and you don't have to pledge other security or guarantees. If you have a good business that needs money to expand, the potential for profit is incredible.


You won’t lose out at retirement

You don’t have to buy an annuity. You won’t suffer a ridiculously low income.  And you won’t lose total control of your fund. Instead, you can leave your money invested and draw income from the fund.  Invest wisely, and you’ll have the prospect of a rising retirement income.  When you die, your pension fund will be available to your nearest and dearest, although the taxman will want a share.  But it's much better than leaving them nothing if you buy an annuity.

It’s time to take control

You should ‘Do Something’. And you should do it now. Because today and every day that follows, your pension is exposed to those seven savage attacks. If you’ve ever had a sense your pensions haven’t been growing as quickly as you’d like, now's the time to find out. Ask your pension provider to give you a summary of how much you've made, year-by-year, since 2000. Factor in inflation and see if you're up on the deal.  If you're not, take control with a SIPP and select opportunities from SIPPclub where there's profit is waiting for you, in return for your money.

Time is running out so get started NOW!

Hit the 'I Want To Invest' button below to check out our featured opportunities. Let us know those that interest you the most and we'll answer your questions and help you sort out the paperwork so you can start making money as soon as possible. If you'd like help finding opportunities to match your needs, take advantage of our 'Find Me Opportunities' service, which is free to use for SIPPclub members.

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Over time, charges can wipe out a huge part of your fund.  We like AJ Bell because there are no set-up costs.  If you hold passive funds, which is our preference, or shares, investment trusts, EFTs, gilts or bonds, you pay one small fixed fee no matter how large your fund.  And when you come to draw your benefits either as occasional drawdown or UFPLS payments, there's a small charge for the whole year no matter how many times you access your money (many SIPP and SSAS providers charge more than this for each payment).

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