Pension plans/retirement

[grobyfox1990]

41 minutes ago, Rogstanley said:

 

All he needs to do is beat 1.74% with his savings/investments and he’s better off not overpaying. Getting your mortgage paid off is a psychological benefit, but doesn’t make much financial sense at the moment with rates so low.

Easier said than done in a low rate environment. Can't think of many risk-free investments that return 1.74% .Over-paying exisitng debt at 1.74% is.

[Bellend Sebastian]

1 hour ago, Izzy Muzzett said:

A noddy question from me if I may, who doesn't really understand all this stuff...

 

What's the difference between me setting up a long term investment plan that I'd pay into monthly (e.g. stocks & shares ISA?) vs a 'pension' with the benefits you've mentioned above?

 

What exactly is the difference between a personal pension and a long term savings/investment plan?

 

P.S. I'm self employed so this wouldn't have anything to do with a works pension if you catch my drift?

Rodney's right, tax relief is the main thing but the new Lifetime ISA that pays a bonus equivalent to basic rate tax relief has blurred the lines somewhat.

 

If you're ever a higher rate tax payer then pension all the way as you get 20% relief at source on contributions and can claim a further 20% via your tax return

[Countryfox]

1 hour ago, Izzy Muzzett said:

A noddy question from me if I may, who doesn't really understand all this stuff...

 

What's the difference between me setting up a long term investment plan that I'd pay into monthly (e.g. stocks & shares ISA?) vs a 'pension' with the benefits you've mentioned above?

 

What exactly is the difference between a personal pension and a long term savings/investment plan?

 

P.S. I'm self employed so this wouldn't have anything to do with a works pension if you catch my drift?

 

A monthly SIPP Muzzett that’s what you want ...    tell the adviser how risky you want it and let him get on with it ..

[RODNEY FERNIO]

4 minutes ago, Countryfox said:

 

A monthly SIPP Muzzett that’s what you want ...    tell the adviser how risky you want it and let him get on with it ..

I've got a SIPP Mr Fox and it's doing very well and that's a high risk one.

But I've balanced it out with a low risk pension fund as well.

Eggs in one basket is not for me.

Remember periodically the Stock Market can collapse ... as was seen only a few years ago.

[Rogstanley]

30 minutes ago, grobyfox1990 said:

Easier said than done in a low rate environment. Can't think of many risk-free investments that return 1.74% .Over-paying exisitng debt at 1.74% is.

There are a few current accounts and regular savers that beat 1.74%, not by a massive amount but it all adds up.

 

Edited 27 January 2018 by Rogstanley

[The Fox Covert]

I work for myself so I need the flexibility to contribute more in a good year, less or even (spare the thought) nothing in a bad year.

I have three former company pensions which are frozen. Two of them are now in private schemes but the companies concerned didn't even bother to reply when I inquired about setting up a new scheme based on my self-employment.

So I had to start a scheme with a different company. I opted for the NFU as they have always been efficient, straightforward and honest in my previous business with them.

And what I like about them is they never put you under pressure to sign up for more things with them - for example if you have their car insurance (which I do), you won't get any cold calls from them in an effort to encourage you to sign up for their home insurance.

I am approaching the end of my best year yet in self employment and quite a bit of the money I haven't spent will go their way before HMRC get their grubby hands on it.

Don't know, however, whether they will do business with people who live in urban areas. I get a very good deal on my car insurance by driving a decent sized but relatively low-powered diesel hold-all, but things would be very different if I decided to live in Leicester, or another large city, and drive a BMW or a Merc.

 

 

[Izzy]

1 hour ago, RODNEY FERNIO said:

You get tax relief when you pay into a personal pension plan ... you don't with a savings plan. 

 

36 minutes ago, Bellend Sebastian said:

Rodney's right, tax relief is the main thing but the new Lifetime ISA that pays a bonus equivalent to basic rate tax relief has blurred the lines somewhat.

 

If you're ever a higher rate tax payer then pension all the way as you get 20% relief at source on contributions and can claim a further 20% via your tax return

 

23 minutes ago, Countryfox said:

 

A monthly SIPP Muzzett that’s what you want ...    tell the adviser how risky you want it and let him get on with it ..

Cheers fella's 

 

I've done a bit of research and I think a Stakeholder Pension might be the best option for someone like me. I like the idea of being able to change the amount each month and 'top it up' as and when.

 

SIPP looks a bit high risk for me CF! I haven't got a scooby when it comes to all this but a Stakeholder Pension seemed a bit less risky?

 

I obviously need to speak to a proper pensions adviser next I guess..

 

Thanks 

[Bellend Sebastian]

Risk is a very subjective term, and most of the time advisers will now go through  some sort of questionnaire with you to get you thinking about what your tolerances actually are.

 

A very general rule is that the longer you have until you intend to access your capital, the more risk you can afford to take. Any youngsters on here paying regularly into a pension can be as adventurous as they can bear, as if the market crashes a) there's plenty of time for it to recover and b) you'll be buying assets on the cheap while the market is depressed. It's different for those closer to retirement, particularly if buying an annuity (which is becoming less and less popular)

 

[Izzy]

5 minutes ago, The Fox Covert said:

I work for myself so I need the flexibility to contribute more in a good year, less or even (spare the thought) nothing in a bad year.

I have three former company pensions which are frozen. Two of them are now in private schemes but the companies concerned didn't even bother to reply when I inquired about setting up a new scheme based on my self-employment.

So I had to start a scheme with a different company. I opted for the NFU as they have always been efficient, straightforward and honest in my previous business with them.

And what I like about them is they never put you under pressure to sign up for more things with them - for example if you have their car insurance (which I do), you won't get any cold calls from them in an effort to encourage you to sign up for their home insurance.

I am approaching the end of my best year yet in self employment and quite a bit of the money I haven't spent will go their way before HMRC get their grubby hands on it.

Don't know, however, whether they will do business with people who live in urban areas. I get a very good deal on my car insurance by driving a decent sized but relatively low-powered diesel hold-all, but things would be very different if I decided to live in Leicester, or another large city, and drive a BMW or a Merc.

 

 

We're in very similar positions work-wise mate. I too work for myself and desire the flexibility you mention in a pension.

 

A quick Google search and NFU came up as did Aviva and various others. Did you still talk to (and pay for) a financial adviser before deciding on NFU? With the Aviva stakeholder pension I looked at, it seemed that you had to go through a FA first and it wasn't optional?

[Izzy]

2 minutes ago, Bellend Sebastian said:

Risk is a very subjective term, and most of the time advisers will now go through  some sort of questionnaire with you to get you thinking about what your tolerances actually are.

 

A very general rule is that the longer you have until you intend to access your capital, the more risk you can afford to take. Any youngsters on here paying regularly into a pension can be as adventurous as they can bear, as if the market crashes a) there's plenty of time for it to recover and b) you'll be buying assets on the cheap while the market is depressed. It's different for those closer to retirement, particularly if buying an annuity (which is becoming less and less popular)

 

This is all good stuff - cheers BS.

 

I'm 44 and plan to retire at 65 (which ties in with the mortgage finishing). So just over 20 years left for me to start saving like a bastard and hopefully having something half decent to supplement my modest company pension from a while back.

 

Maybe I'm best with 'medium risk' but I'll talk to an adviser and fill out the questionnaire as suggested 

[Bellend Sebastian]

1 minute ago, Izzy Muzzett said:

This is all good stuff - cheers BS.

 

I'm 44 and plan to retire at 65 (which ties in with the mortgage finishing). So just over 20 years left for me to start saving like a bastard and hopefully having something half decent to supplement my modest company pension from a while back.

 

Maybe I'm best with 'medium risk' but I'll talk to an adviser and fill out the questionnaire as suggested 

No worries, chap.

 

Going back to your deliberations on different types of pensions....

 

Stakeholder pensions are cheap charges wise, with investment options usually very limited, but it's not to say there aren't some decent ones, and there will always be a choice of risk options.

 

SIPP doesn't have to be high risk, but they allow investment into all sorts of specialist things (most obvious is commercial property) and are relatively expensive as a result.

 

There are plenty of contracts that fit somewhere in between and these are probably a good bet for most people.

 

You're only a year older than me, Izzy. Plenty of time to do something to make a big difference to your retirement

 

[Izzy]

2 minutes ago, Bellend Sebastian said:

No worries, chap.

 

Going back to your deliberations on different types of pensions....

 

Stakeholder pensions are cheap charges wise, with investment options usually very limited, but it's not to say there aren't some decent ones, and there will always be a choice of risk options.

 

SIPP doesn't have to be high risk, but they allow investment into all sorts of specialist things (most obvious is commercial property) and are relatively expensive as a result.

 

There are plenty of contracts that fit somewhere in between and these are probably a good bet for most people.

 

You're only a year older than me, Izzy. Plenty of time to do something to make a big difference to your retirement

 

That's comforting to know mate.

 

I've been putting this off for years and have a young family to support but it feels like I need to get my stakes on now. I thought I'd left it too late but you've given me hope that I can still do something that will make a difference. Thanks again 

[Bellend Sebastian]

2 minutes ago, Izzy Muzzett said:

That's comforting to know mate.

 

I've been putting this off for years and have a young family to support but it feels like I need to get my stakes on now. I thought I'd left it too late but you've given me hope that I can still do something that will make a difference. Thanks again 

 

Christ knows there's enough other things to spend your money on.

 

I'll shut up now, and leave you all with this, which contains some good info and hopefully written in language that isn't too impenetrable....

 

https://www.unbiased.co.uk/life/pensions-retirement

[The Fox Covert]

8 minutes ago, Izzy Muzzett said:

We're in very similar positions work-wise mate. I too work for myself and desire the flexibility you mention in a pension.

 

A quick Google search and NFU came up as did Aviva and various others. Did you still talk to (and pay for) a financial adviser before deciding on NFU? With the Aviva stakeholder pension I looked at, it seemed that you had to go through a FA first and it wasn't optional?

Nope. I have had a few dealings with financial advisers and never profited from any of them. Endowment mortgage, pah! Pension transfer from a company scheme, lost money on that and my money is now with somebody else. Life policy, also an expensive heap of merde. Private pension and expansive claims that I would be able to retire at 50! Err no, not happened! 

NFU are used to dealing with the self-employed. Oddly enough, a large part of their business is still with farmers who tend to be self-employed, whose business tends to be a constant cycle of good year / bad year. 

[Izzy]

5 minutes ago, The Fox Covert said:

Nope. I have had a few dealings with financial advisers and never profited from any of them. Endowment mortgage, pah! Pension transfer from a company scheme, lost money on that and my money is now with somebody else. Life policy, also an expensive heap of merde. Private pension and expansive claims that I would be able to retire at 50! Err no, not happened! 

NFU are used to dealing with the self-employed. Oddly enough, a large part of their business is still with farmers who tend to be self-employed, whose business tends to be a constant cycle of good year / bad year. 

Interesting - thanks.

 

Must admit I've never had a good experience with any sort of FA either and always feel I've made the wrong decision with them (life insurance, investments, mortgage etc). 

 

Sounds like you really rate NFU so I may even contact them direct based on your recommendation. Cheers 

[Guest]

Nothing. As an NHS worker we've been subject to pay restraint for almost 8 years and it would cost me around £250 a month to pay into the NHS pension. Not impressed.

[Izzy]

4 minutes ago, toddybad said:

Nothing. As an NHS worker we've been subject to pay restraint for almost 8 years and it would cost me around £250 a month to pay into the NHS pension. Not impressed.

I'm assuming the NHS as your employer still take a % of your wage before tax and put that into a pension for you don't they? I thought they had to by law?

[Guest]

4 minutes ago, Izzy Muzzett said:

I'm assuming the NHS as your employer still take a % of your wage before tax and put that into a pension for you don't they? I thought they had to by law?

No, I've opted out of the pension scheme as I can't afford it. If I was in I'd have to pay the contributions.

 

Edit: they have to auto-enrol you by law but you can opt back out. It's so the default position is to be in.

Edited 27 January 2018 by Guest

[Izzy]

10 minutes ago, toddybad said:

No, I've opted out of the pension scheme as I can't afford it. If I was in I'd have to pay the contributions.

 

Edit: they have to auto-enrol you by law but you can opt back out. It's so the default position is to be in.

Ah O.K. I see. I didn't realise you had the option to opt out (it's been a while since I've been an employee)

 

Sorry to hear you can't afford it, that seems a shame. I thought the HNS at least matched your contributions and were quite generous with their % top up which seems unfortunate to miss out on - but needs must I guess...

[Guest]

2 minutes ago, Izzy Muzzett said:

Ah O.K. I see. I didn't realise you had the option to opt out (it's been a while since I've been an employee)

 

Sorry to hear you can't afford it, that seems a shame. I thought the HNS at least matched your contributions and were quite generous with their % top up which seems unfortunate to miss out on - but needs must I guess...

It's a really good scheme - though nowhere near as generous as it was pre-Tories but the contributions are high. 

 

Just have to wait for Jezza to undo the current mess.

[Benguin]

More chance of me becoming rich and not having to worry about it than me making it to the retirement age.

[ozleicester]

Thousands stolen from me during the GFC.... Fvck the future, live for today.

 

[Tommy G]

I’m 29 and have been investing into a company pension for about 5 years but only recently have the contributions been decent. Total me & Ers contributions is about £300 a month before tax relief, I pay 3 and they pay 3 which goes up to 5 and 4 % in oct 18. Not massive contributions compared to public sector but every little helps. 

 

Im an accountant but only realised myself recently that HR tax payers get an extra 20% relief when you complete a tax return, so I’ve only just realised that benefit. Aside from pensions I save some for a rainy day and try to overpay mortgage when poss. 

 

Other than that try and live live your life! 

[Crinklyfox]

My only contribution to this discussion is to say that you will need a pension.  Living on the state pension isn't something I'd relished doing - I'm retired and was fortunate enough to have a final salary pension scheme, even though this was severely reduced by financial manipulations by the company that I didn't believe were legal but were in fact.

 

I found that annuities represented far less value than I expected when I retired, they were quoting in the region of £1000 per annum for my pension for every £30,000 I gave them.  I don't know what the current rates are but if anyone is looking into how much they need to put into a pension then it's worth doing.

 

If you are in a company scheme it's probably either Defined Benefits or Defined Contributions.  The former gives you a salary and the latter usually gives you a pot to spend on an annuity or other investment.  Please be aware that for Defined Benefits if you retire and take your pension before your expected retirement age (e.g. 67) then your benefits can be reduced depending upon how many years prior to your expected age that you actually retire.  My company started with 2% per annum but then quickly raised that to 4%.  As many of us either can't or don't want to work until 67 or whatever your designated retirement age is this can significantly impact your income.

[simFox]

Thanks guys, some great info and insight into what you're all doing. Like Muzzy i feel a bit more confident that i haven't left it too late. BS - that's a really good website, even in my current hung over state it's easy to understand. Wish i knew about the LISA before i turned 40, i would have opened one, but i can get one in the wife's name at least.