Advice for Pensions!!

dem maser

Moderator
Messages
34,221
I need some advice.

I dont earn a lot and obviously i realise that once i retire im up ***** creek as ill be earning only a state pension.

Never dawned on me before until i met with an old friend and they were telling me they could retire at 55 (they are 37 now) and earn a healthy 30k.


Have no idea about how it works etc and would like to know if theres any advice you can give me besides seeing a financial advisor.

Very depressing stuff online, if i pay £200 per month my pension will be £170 pm at 60 years old!! **** that

Any advice??
 

conaero

Forum Owner
Messages
34,593
As of a few months back, both you and your employer have to put into a private pension, there is no getting round it.

I think the minimum is 1% employer and 2% employee and this is set to rise to 3% employer and 5% employee.

For me, will have some sort of state pension but I have nothing else, instead I purchased a commercial property that will return £24k per annum its 20% flat rate tax after my allowance.

I wont be rich but it should see me ok once added to a state pension which I believe is something in the region of about a grand per couple per month.

For me, I didn't want to rely on someone else to let me down in my old age so I sorted this out myself but you are doing the right thing starting to look at it.

Oh, theres the free bus pass too, yippeeeee!
 

Contigo

Sponsor
Messages
18,376
I need some advice.

I dont earn a lot and obviously i realise that once i retire im up ***** creek as ill be earning only a state pension.

Never dawned on me before until i met with an old friend and they were telling me they could retire at 55 (they are 37 now) and earn a healthy 30k.


Have no idea about how it works etc and would like to know if theres any advice you can give me besides seeing a financial advisor.

Very depressing stuff online, if i pay £200 per month my pension will be £170 pm at 60 years old!! **** that

Any advice??

Mate do the LISA, pay into it as much as you can and draw it on your 60th birthday. I am paying into it the max £4k a year for the government to pay me £1000 so it is effectively a 25% bonus on savings every year.

"The Lifetime ISA is designed for two specific purposes. The first is for first-time buyers to use towards a residential property, and that can be done at any time, provided the Lifetime ISA's been held for 12 months or more. The second is to take out and use in retirement once you hit age 60. With both, there is no tax to pay on it when you take the money out."

http://www.moneysavingexpert.com/savings/lifetime-ISAs
 

conaero

Forum Owner
Messages
34,593
Mate do the LISA, pay into it as much as you can and draw it on your 60th birthday. I am paying into it the max £4k a year for the government to pay me £1000 so it is effectively a 25% bonus on savings every year.

"The Lifetime ISA is designed for two specific purposes. The first is for first-time buyers to use towards a residential property, and that can be done at any time, provided the Lifetime ISA's been held for 12 months or more. The second is to take out and use in retirement once you hit age 60. With both, there is no tax to pay on it when you take the money out."

http://www.moneysavingexpert.com/savings/lifetime-ISAs

Problem with that is if the interest rate remains low your fund wont increase. So say 25 years at £5k per year, thats a fund of £125k plus interest. I don't know what that will work out to but if would not support you for very long.

You could also take the route many do, save feck all, own nothing and expect the government to look after you when your old, many have been doing that for years as they know you wont be left to starve on the streets.
 

Contigo

Sponsor
Messages
18,376
Problem with that is if the interest rate remains low your fund wont increase. So say 25 years at £5k per year, thats a fund of £125k plus interest. I don't know what that will work out to but if would not support you for very long.

You could also take the route many do, save feck all, own nothing and expect the government to look after you when your old, many have been doing that for years as they know you wont be left to starve on the streets.

I already have 3 pensions mate, one from my first employer (ten years), one in a SIPP account (self investment stocks) and current employer (10% contribution) so I am opening this as an extra top up fund. I'll never get on the ladder now so I'm looking into alternative investments.
 

conaero

Forum Owner
Messages
34,593
I already have 3 pensions mate, one from my first employer (ten years), one in a SIPP account (self investment stocks) and current employer (10% contribution) so I am opening this as an extra top up fund. I'll never get on the ladder now so I'm looking into alternative investments.

Well thats fair enough then you should be well covered.
 

GeoffCapes

Member
Messages
14,000
I already have 3 pensions mate, one from my first employer (ten years), one in a SIPP account (self investment stocks) and current employer (10% contribution) so I am opening this as an extra top up fund. I'll never get on the ladder now so I'm looking into alternative investments.

I've got 5! However, not paid a penny into them. And had no employer contributions for 6 years.
Am in the process of amalgamating them into one.

Current worth is about 85k, so that won't last long.
I think there are better ways of saving for a 'pension' than paying into a pension plan though.
 

D Walker

Member
Messages
9,827
Ive got a military one which I get now and is index linked when 55, and about £30k in another company one, however at the moment they are losing £1k a year for me so unless I can get it out at 55 it's nowt.

I have cash in 3 banks and no idea what to do with it, May look into the LISA thing, but thought there was an age limit on it.

Also keep looking at flats etc to buy and rent but I have no idea!!!

Think I should do something, on the flip side I dont owe anybody a single penny!!!
 

Needamaser

Member
Messages
1,491
Dem, can understand you are reluctant to spend money but a couple of hundred quid with an independent adviser is a small price to pay to get advice specific to your situation rather than relying on well intentioned advice from folk on here.
Pension rules are changing all the time and the industry are struggling to keep up with all the changes. Whether you are employed or self employed and if that is possibly going to change in the future are just some of the things that will maybe dictate best advice for you.
Being cynical the need for employers to set up a scheme for employees (who don't have to join) strikes me as a government looking at reducing the state pension in the future once most folk have their own pension.
I have been self employed for a long time but at the time when I should have been paying into a pension in my 20's and 30's I didn't have spare cash to put away. I was struggling to put food on the table for the family. By time I was in a position to pay in a substantial sum it was way too late. Having said that my accountant tells me depending what my plans are for the future it might make sense with the tax relief to put money in. Sure as fate as soon as I do that the government will change the rules again!
 

hoyin

Member
Messages
1,842
**** it. I am going out in a blaze of glory. When I near my old age I am going to debt myself out to the max live off it on the high life ensuring I don't have any dependents who have to pay it back.

So when I die my debts die with me.


Sent from my iPhone using Tapatalk
 

D Walker

Member
Messages
9,827
**** it. I am going out in a blaze of glory. When I near my old age I am going to debt myself out to the max live off it on the high life ensuring I don't have any dependents who have to pay it back.

So when I die my debts die with me.


Sent from my iPhone using Tapatalk

Have considered this........however I cant imagine you going on a bender!!!
 

safrane

Member
Messages
16,747
Dem, pensions cost a huge amount when you do not earn much, but simple advice is to start as soon as possible that way you get more out.

If you can look at alternative funding streams or topping up with AVCs when/if you earn a bonus or are left anything.

I will have a small pension despite paying in since 18, and have had the bitter pill recently of having to pay in more, for an extra 8 years, and now retire at 67!...so much for Civil Service gold plate pensions!

Re the state pension...it will stop growing soon as the triple lock is unsustainable...if I get anything from the state in 22 years I will be shocked.
 

rockits

Member
Messages
9,167
Holy cow...pensions...I have much more important things to worry about in the immediate term. I've put far too much super hot chilli oil on my pasta. So much my vision has actually started to blur! Gotta play football at 9pm!!