Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie

2008 financial crisis cut pensions in half

«1

Comments

  • Closed Accounts Posts: 1,148 ✭✭✭Salary Negotiator


    Anyone nearing retirement should be well diversified into low risk assets.


  • Moderators, Business & Finance Moderators Posts: 10,360 Mod ✭✭✭✭Jim2007


    https://www.thisismoney.co.uk/money/news/article-4877618/Financial-crisis-robbed-pensioners-half-income.html

    Thoughts on what potential coronavirus economic impact could mean (as to retirement funds)?

    People who did the same dump thing twice can only expect the same outcome.

    Since you refer to a UK article, British investors and their advisors consistent ignore all the research showing that property is one of the highest risk asset classes available to investors and pile in. Consensus advice is that portfolios holding more than about 6%/7% in property are very high risk and yet British investors go 50% or in some cases even 100% into property.

    The typical Brit/Irish investor that lost heavily:
    - Concentrated their investment in a single high risk asset class
    - Failed to diversify within that class
    - Borrowed to do so
    In other words ignored all the conventional rules of thumb, when it comes to investing.

    The bottom line is that if you construct a high risk portfolio, you should not at all be surprised if you pay the price when a recession hits.


  • Banned (with Prison Access) Posts: 1,355 ✭✭✭bo0li5eumx12kp


    So an typical pension that you pay into and get back after retirement etc - just so we're clear, those were or were not affected in any way during/after the 2008 crisis?

    And large savings accounts, affected or no?


  • Registered Users, Registered Users 2 Posts: 33,795 ✭✭✭✭NIMAN


    So an typical pension that you pay into and get back after retirement etc - just so we're clear, those were or were not affected in any way during/after the 2008 crisis?

    And large savings accounts, affected or no?

    Of course pension funds were affected after the 2008 crisis. By their very nature, your money is invested by your pension company into various things such as property, stocks, shares, equities, bonds, gilts etc etc. And the financial crisis of that time meant these investments took a hit.

    Same thing is happening now. My own pension fund took a 13% drop over the space of several weeks due to the coronavirus. May drop more.

    As for savings accounts during 2008, I think you are trying to hint that people had money taken out of them by the government. Afaik I don't think that happened.


  • Banned (with Prison Access) Posts: 1,355 ✭✭✭bo0li5eumx12kp


    NIMAN wrote: »
    Of course pension funds were affected after the 2008 crisis. By their very nature, your money is invested by your pension company into various things such as property, stocks, shares, equities, bonds, gilts etc etc. And the financial crisis of that time meant these investments took a hit.

    Same thing is happening now. My own pension fund took a 13% drop over the space of several weeks due to the coronavirus. May drop more.

    As for savings accounts during 2008, I think you are trying to hint that people had money taken out of them by the government. Afaik I don't think that happened.

    So, this is predicted to be the worst economic disaster since the great depression.

    Thousands of peoples pension could take a hit to the point that what, they won't have enough money to cover the grocery shopping?

    Yeah where did I hear that, saving accounts with more than 20 k in them, anything above the 20 k was implicated somehow.

    I heard that, and then forgot about it and thought no more of it but, seems as a economic disaster looms on the horizon, it's probably prudent to consider the possibilities.


  • Advertisement
  • Registered Users, Registered Users 2 Posts: 33,795 ✭✭✭✭NIMAN


    By pension do you mean a pension people far from retirement are paying into with the hope of a decent income in their later days, or the old age pension old people get now (weekly?).

    Cos people don't do the weekly shopping out of the first.

    If it's the latter, Irish governments since 2008 have always looked after old folk. And benefit recipients in general. Not too many cuts worth talking about. If I remember correctly they did make a 0.5% charge on the values of private pensions sometime after 2008.

    And again, your last comment suggests people literally had money taken out of their bank accounts. They didn't. Unless someone wants to correct me.


  • Registered Users, Registered Users 2 Posts: 5,786 ✭✭✭The J Stands for Jay


    So, this is predicted to be the worst economic disaster since the great depression.

    Thousands of peoples pension could take a hit to the point that what, they won't have enough money to cover the grocery shopping?

    Yeah where did I hear that, saving accounts with more than 20 k in them, anything above the 20 k was implicated somehow.

    I heard that, and then forgot about it and thought no more of it but, seems as a economic disaster looms on the horizon, it's probably prudent to consider the possibilities.
    I wouldn't be getting too worried about a three year old Daily Mail article about the effect of events 10 years earlier on the incomes of pensioners in a foreign country.


  • Closed Accounts Posts: 2,738 ✭✭✭Heres Johnny


    The way I look at I'm putting 400 a month into a workplace pension, 200 from employer and 200 from me. My 200 costs me 120 euro after tax relief. So I'm getting 400 a month into a pension fund for 120 a month. I'm more than 30 years to retirement. The market can do what the hell it likes, I very much doubt the 400 going in will ever be less than the 120 it costs me. It would be nice if it didn't drop but that's life....

    If it matches the 2008 drop I'm likely to lose the gains of tax relief but that's it, and that tax relief only exists because I'm paying into pension in first place.

    However, many of my colleagues still on full pay and likely to remain on full pay have stopped their contributions, losing the tax relief and losing the employers contribution. Some of them have also lied to their banks and got mortgage moratorium.

    Keep your head while those around you are losing theirs and you'll be OK.


  • Banned (with Prison Access) Posts: 1,355 ✭✭✭bo0li5eumx12kp


    NIMAN wrote: »
    By pension do you mean a pension people far from retirement are paying into with the hope of a decent income in their later days, or the old age pension old people get now (weekly?).

    Cos people don't do the weekly shopping out of the first.

    If it's the latter, Irish governments since 2008 have always looked after old folk. And benefit recipients in general. Not too many cuts worth talking about. If I remember correctly they did make a 0.5% charge on the values of private pensions sometime after 2008.

    And again, your last comment suggests people literally had money taken out of their bank accounts. They didn't. Unless someone wants to correct me.

    As in, they've paid into a pension all their working lives, now they're receiving that pension - but due to the recession, a percentage gets cut.

    That's what I mean - and the dude above said he's already got a 13% cut on his?


  • Registered Users, Registered Users 2 Posts: 5,786 ✭✭✭The J Stands for Jay


    As in, they've paid into a pension all their working lives, now they're receiving that pension - but due to the recession, a percentage gets cut.

    That's what I mean - and the dude above said he's already got a 13% cut on his?

    Nobody took a decision to cut someone's pension. The value was less than it would have been had they crystallised its value on a different date


  • Advertisement
  • Closed Accounts Posts: 1,148 ✭✭✭Salary Negotiator


    As in, they've paid into a pension all their working lives, now they're receiving that pension - but due to the recession, a percentage gets cut.

    That's what I mean - and the dude above said he's already got a 13% cut on his?

    Nothing was cut.

    His fund has reduced in value but that’s what happens to investments, their value fluctuates.


  • Banned (with Prison Access) Posts: 1,355 ✭✭✭bo0li5eumx12kp


    Nothing was cut.

    His fund has reduced in value but that’s what happens to investments, their value fluctuates.

    Which means he gets less money which means perhaps for certain people in certain situations, their financial security/well-being is thrown into question....?

    A retired neighbour of mine back in 2008 had to return to work (from retirement) after the 2008 crash.

    That's what I mean by uncertainty.


  • Registered Users, Registered Users 2 Posts: 5,786 ✭✭✭The J Stands for Jay


    Which means he gets less money which means perhaps for certain people in certain situations, their financial security/well-being is thrown into question....?

    A retired neighbour of mine back in 2008 had to return to work (from retirement) after the 2008 crash.

    That's what I mean by uncertainty.

    What's your question?


  • Registered Users, Registered Users 2 Posts: 2,587 ✭✭✭circular flexing


    Which means he gets less money which means perhaps for certain people in certain situations, their financial security/well-being is thrown into question....?

    A retired neighbour of mine back in 2008 had to return to work (from retirement) after the 2008 crash.

    That's what I mean by uncertainty.


    What kind of pension fund did your neighbour have?


    My pension fund went down 15% recently but it doesn't have any impact because I'm still 25-30 years from retirement. Over time, the fund will hold assets that don't go down or up as much. The idea being that as I get closer to retirement, the money is more secure.


  • Banned (with Prison Access) Posts: 1,355 ✭✭✭bo0li5eumx12kp


    Well, he thought he was retired but had to go back to work to put food on the table.

    I'm certain I heard it mentioned that, "more than 20 k in your account, you got skimmed", effectively.

    People losing their pensions, this isn't common knowledge during/after a financial crash?


  • Registered Users, Registered Users 2 Posts: 2,587 ✭✭✭circular flexing


    Well, he thought he was retired but had to go back to work to put food on the table.


    So you have no idea basically?


    To be clear, nobody was "robbed" of their pension but the value of their fund could go up and down. As mentioned though, the fund should be moved to a more stable asset class the close you are to retirement.


  • Registered Users, Registered Users 2 Posts: 5,786 ✭✭✭The J Stands for Jay


    Well, he thought he was retired but had to go back to work to put food on the table.

    I'm certain I heard it mentioned that, "more than 20 k in your account, you got skimmed", effectively.

    People losing their pensions, this isn't common knowledge during/after a financial crash?

    Sounds like he had a retirement fund rather than a pension.

    No-one was skimmed for having €20k here. You would have noticed the uproar over that one. Unless you're thinking of Cyprus.

    People don't lose their pensions. There's been some cases in the UK years ago, but they were massive frauds.


  • Banned (with Prison Access) Posts: 1,355 ✭✭✭bo0li5eumx12kp


    McGaggs wrote: »
    Sounds like he had a retirement fund rather than a pension.

    No-one was skimmed for having €20k here. You would have noticed the uproar over that one. Unless you're thinking of Cyprus.

    People don't lose their pensions. There's been some cases in the UK years ago, but they were massive frauds.

    When you go into a bank and speak to a pensions person - then start making your monthly contributions - I have no idea what goes on beyond that point.

    A retirement fund sounds like money stockpile in an account somewhere.

    So what - money stockpiles were pinches also?


  • Registered Users, Registered Users 2 Posts: 12,010 ✭✭✭✭anewme



    And large savings accounts, affected or no?

    What are you talking about ?


  • Registered Users, Registered Users 2 Posts: 12,010 ✭✭✭✭anewme


    Yeah where did I hear that, saving accounts with more than 20 k in them, anything above the 20 k was implicated

    Such rubbish.


  • Advertisement
  • Registered Users, Registered Users 2 Posts: 33,795 ✭✭✭✭NIMAN


    As in, they've paid into a pension all their working lives, now they're receiving that pension - but due to the recession, a percentage gets cut.

    That's what I mean - and the dude above said he's already got a 13% cut on his?

    I was the dude above who said they lost 13% of the value of my pension.

    It might even be more now, I just haven't checked it in a couple of weeks.

    But my total pot of wealth decreased by that amount. It's not to say it won't go back up again in the next few years. That's what investments do, they go up and down. Believe me, overall it has gone up. I think between me and my employer contributions for the last 23 years, it's value was several times more than what has been put into it.

    I don't retire for another 16yrs at least. Still plenty of time to get gains again.


  • Registered Users, Registered Users 2 Posts: 5,786 ✭✭✭The J Stands for Jay


    When you go into a bank and speak to a pensions person - then start making your monthly contributions - I have no idea what goes on beyond that point.

    A retirement fund sounds like money stockpile in an account somewhere.

    So what - money stockpiles were pinches also?

    An approved retirement fund is invested in the same range of funds as pension funds invest in before retirement. There is no-one taking money from bank accounts and convincing everyone not to talk about it


  • Registered Users, Registered Users 2 Posts: 4,461 ✭✭✭Bubbaclaus


    OP sounds very confused about pensions and weirdly seems to be making something up about saving accounts. Odd.


  • Registered Users, Registered Users 2 Posts: 12,010 ✭✭✭✭anewme


    Bubbaclaus wrote: »
    OP sounds very confused about pensions and weirdly seems to be making something up about saving accounts. Odd.

    Very odd.

    Like why would he even think anyone would be allowed dip into someones savings account.?


  • Banned (with Prison Access) Posts: 1,355 ✭✭✭bo0li5eumx12kp


    NIMAN wrote: »
    I was the dude above who said they lost 13% of the value of my pension.

    It might even be more now, I just haven't checked it in a couple of weeks.

    But my total pot of wealth decreased by that amount. It's not to say it won't go back up again in the next few years. That's what investments do, they go up and down. Believe me, overall it has gone up. I think between me and my employer contributions for the last 23 years, it's value was several times more than what has been put into it.

    I don't retire for another 16yrs at least. Still plenty of time to get gains again.

    So, your "investment", is that a typical pension when you go into the bank to speak to a pensions person?

    That's your deal, right?

    So for people retired and claiming their pension and a financial crises hits, it's entirely conceivable their pension income decreases to a point where they can basically no longer pay their bills (as happened to my neighbour)?


  • Registered Users Posts: 380 ✭✭Saudades


    Yeah where did I hear that, saving accounts with more than 20 k in them, anything above the 20 k was implicated somehow.

    Are you thinking about the means-tested Non-Contributory state pension, which is - using your word - implicated, by any capital over 20k.

    So capital (that being savings, shares, bonds, funds, cash-on-hands and property) up to the first 20k is assessed at Zero.

    But then capital after the first 20k is means assessed at;
    Next €10,000.00 - €1.00 per €1,000.00,
    Next €10,000.00 - €2.00 per €1,000.00,
    Balance - €4.00 per €1,000.00.


  • Registered Users, Registered Users 2 Posts: 5,786 ✭✭✭The J Stands for Jay


    So, your "investment", is that a typical pension when you go into the bank to speak to a pensions person?

    That's your deal, right?

    So for people retired and claiming their pension and a financial crises hits, it's entirely conceivable their pension income decreases to a point where they can basically no longer pay their bills (as happened to my neighbour)?

    Going to a bank to get a pension isn't the smartest thing to be doing.

    It's entirely inconceivable that someone receiving a pension would have a decrease.


  • Banned (with Prison Access) Posts: 1,355 ✭✭✭bo0li5eumx12kp


    McGaggs wrote: »
    Going to a bank to get a pension isn't the smartest thing to be doing.

    It's entirely inconceivable that someone receiving a pension would have a decrease.

    Umm, I mean, Irish life - they operate through AIB at the moment.

    They're not the banking division but, technically, you still go into the bank to speak with the pensions dude.

    What you're posting makes no sense.
    First off, I'm a pensions blank slate.
    Secondly, your mate above described the process of pension'ing as investments which can lose value during economic down time, thus ones receipt of cash is reduced.

    So, my neighbour that had to go back to work after the 2008 crisis being on a pension full time cause he couldn't make ends meet - what was that, was he spoofing me or what?


  • Registered Users, Registered Users 2 Posts: 2,587 ✭✭✭circular flexing


    Umm, I mean, Irish life - they operate through AIB at the moment.

    They're not the banking division but, technically, you still go into the bank to speak with the pensions dude.

    What you're posting makes no sense.
    First off, I'm a pensions blank slate.
    Secondly, your mate above described the process of pension'ing as investments which can lose value during economic down time, thus ones receipt of cash is reduced.

    So, my neighbour that had to go back to work after the 2008 crisis being on a pension full time cause he couldn't make ends meet - what was that, was he spoofing me or what?


    Investments do go up and down. But your pension should not be invested in anything remotely risky at the time you reach retirement age - at most it should be in guaranteed savings accounts but it should be mostly cash, certainly not still invested in the stock market or property.



    I can't comment on your neighbour because there isn't enough detail but maybe he didn't have enough saved in his pension or maybe he was still invested in riskier investments.


  • Advertisement
  • Registered Users, Registered Users 2 Posts: 4,461 ✭✭✭Bubbaclaus


    Umm, I mean, Irish life - they operate through AIB at the moment.

    They're not the banking division but, technically, you still go into the bank to speak with the pensions dude.

    What you're posting makes no sense.
    First off, I'm a pensions blank slate.
    Secondly, your mate above described the process of pension'ing as investments which can lose value during economic down time, thus ones receipt of cash is reduced.

    So, my neighbour that had to go back to work after the 2008 crisis being on a pension full time cause he couldn't make ends meet - what was that, was he spoofing me or what?

    You seem to be very confused between pension funds going up and down and the pension payments a person actually receives.


Advertisement