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I thought this sort of total b0ll0cks had been outlawed years ago.
If I can generate an average of 10% return over the long run, this would see my £15,000 transformed into £261,741 after 30 years.
Of course, my return might end up lower or higher than 10% and dividends aren’t guaranteed. But it still shows what’s possible given enough time.
If I decided to invest a further £200 a month (which the government tops up to £250), my SIPP would grow to £777,841, assuming the same 10% return.
The article is awful. The headline is even more misleading, he's not projecting to turn £12,000 into £777,841, if you read the article he's projecting to turn £12,000 AND £200 PER MONTH FOR 30 YEARS, into £777K at an assumed growth rate of 10% per annum.
Just for information the MAXIMUM growth rates for an FCA regulated SIPP quote are 2%, 5% and 8%, before charges and the SIPP providers will often use growth rates of below these maximum rates depending on the underlying investments selected. SO he hasn't actually got a quote showing any of this, he's just done it on the back of a cigarette packet, all very 1980's.
Motley Fool are a private American Financial Advisory service. They operate in the UK. Advertising for new members. In the UK
https://en.wikipedia.org/wiki/The_Motley_Fool
Using dog plop articles exactly like this one.
They started out railing against excesses in the industry. Presumably not their own ones...
A friend of mine used to whinge about it a lot.
He felt that it was unfair as every company had to quote the same growth rates, irrespective of past performance.
Or even if they didnt have much of a past.
If young people were inspired into investing in a SIPP, as a result, that would be a good thing.
There are probably many people that dont do any planning for their retirement.
My colleagues used to laugh at me, if I even mentioned pension contributions.
If the actual result came up a bit short, you would still be far better off than most.
Sewing the seeds can surely only be a good thing.
Telling bare-faced lies is not the way forward.
And if you cannot see that, then that only reinforces why we have a regulatory framework that is supposed to stop this.
You get tax relief on the contributions.
I am saying that, since 1988, there have been clear rules in place to protect people from shysters exactly like this.
And an industry that has spent 35 years trying to improve its appalling reputation gets tarnished by this sort of snake oil salesman.
Having said that I wouldnt have done so, without seeking financial advice.
I do have a SIPP, and during the last 12 months, it has grown by 10.77%.
Although sadly not from the beginning.
I was a higher rate tax payer, so I gained more tax relief than stated in the article.
So less growth would have been required to reach the stated goal.
I am not sure what effect increased regulations have had.
As I said earlier, every company quoting the same growth rates surely favours the worst performing companies.
I took out a life insurance policy in 2010.
I received a projection that I wasnt expecting 10 years in.
Cutting a long story short, the projection informed me that if I wished to maintain my cover, I would have to increase my premiums annually.
Failure to do so, meant that my cover would be reduced on an annual basis.
If I live into my late eighties, which I admit is doubtful, my premiums would rise to around £1500 per month.
At the start they were £150 per month.
I did complain, but got nowhere.
So they wont talk to me.
I thought it was my policy, and my wife was the beneficiary.
I have always paid the premiums.
I have thought about dying quicker just to f..k them up, but decided against.
This article is (IMHO) financial advice. Dressed up pretending it is not. In general terms (without giving financial advice) I think it would be fair to say
1. SIPPs are not suitable for everyone; and
2. There are people who do not have 1 who perhaps should
But there are a whole set of professional qualifications to determine who fits what category. And a whole set of rules relating to what people can and cannot promise.
The "same quotes" bit? It is a drawback. But the disadvantages are considered to be outweighed by the advantages. I am reminded of the old quote about Democracy. That it is a flawed system, with multiple obvious and hidden flaws. And that its only saving grace is that it is less awful than all its alternatives.
The 2010 life insurance policy? That sounds like what tended to be called a "whole of life" policy. Lots of advantages-but also a considerable problem in relation to people of advancing years. I really wish they had clearer warnings about that. Because they work a lot better for the aspirations of the young and middle-aged than as a life insurance (as opposed to investment) vehicle for older people
There were a few 'guaranteed premium' WOL policies back in th day, these are now excellent value for the older clients who still have them but would have been much more expensive at the start.
Had I been aware it wasnt my policy, I wouldnt have done it.
I took it out with a view to making sure my wife was ok, if something happened to me.
I just wanted a policy that left my wife a reasonable sum on my death.
It just seems a ridiculously stupid policy to me.
Starting off at £150 per month, and increasing to £1500 per month.
I think the final figure I looked at was when I reached 89.
It is a catch 22, you either pay the increased premiums, or the cover is reduced.
If I remember correctly, if I live until my late eighties, then the cover will be less than the premiums, assuming I dont increase them.