40 y/o no pension, work place 1% pension, or ISA, or?
- Thread starter toprock
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In 30 years time there will be a massive unclaimed fund. These pension companies will then eat away at it with their fees. I cannot see the people in their late teens and early 20s doing part time or casual work bothering to remember pots that are at most £100s.
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You can't open a LISA at 40 afaik.
He's still 39 so he'll need to be quick to open a LISA.
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Whatever kind of ISA you open, make sure you choose stocks and shares over cash.
Then look at a low cost tracker fund, e.g. Vanguard LifeStrategy
Then look at a low cost tracker fund, e.g. Vanguard LifeStrategy
It does show how much money has to be put aside for DB schemes!
Explains why they were all massively underfunded in the past, underestimated their costs.
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Think of the 1% your employer will contribute as a pay rise.
Cash ISAs yes but a stocks and shares ISA is a different kettle of fish. If if you invest in a few good funds then the dividend returns can be a good few percent plus you’ll hopefully gain from increases in share prices.
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I've been paying into mine at about 200 a month since I was 26(?) and I'm not 31. Before that I'm sure I did with companies I was with, but no idea where they were. I know I have a pension pot with the Police (civ IT work) which gets me on retirement like 1200 a year 
My wife is just changing jobs and the pension is fantastic, which is something I've only really recently started trying to ensure we maximise. I've been rubbish with money and now need to look to the future. You may think of 5% as noticeable, but it's 5% before tax, and you'd notice that amount so much more when you come to have your pension, than you would miss it now.
I'd definitely opt in, and even think about how you can do something else as well. Even without mortgage, state pension will give you very little and without something to top you up, you just won't be able to survive!
Semi hijack, too: My wife worked like 8yrs in the NHS, couple of different trusts. Anyone know how she could track down her pension details?
My wife is just changing jobs and the pension is fantastic, which is something I've only really recently started trying to ensure we maximise. I've been rubbish with money and now need to look to the future. You may think of 5% as noticeable, but it's 5% before tax, and you'd notice that amount so much more when you come to have your pension, than you would miss it now.
I'd definitely opt in, and even think about how you can do something else as well. Even without mortgage, state pension will give you very little and without something to top you up, you just won't be able to survive!
Semi hijack, too: My wife worked like 8yrs in the NHS, couple of different trusts. Anyone know how she could track down her pension details?
So you're going to be 52 when you're mortgage is paid off and then it's 16 years until you're at current state pension age.
There's lot of questions that need to be considered but they all depend on your personal circumstances really. How much you get paid, dependants that you support etc.
- How much £ do you need to carry on your current standard of living? Or improve it?
- Will you be at the same employer?
- What will you do with that old mortgage money during those 16 years?
- Could you live just off the state pension?
- Are you going to have to downsize / move house and use money from the sale to live?
- Or just going to work until you drop?
Open Lisa or Sipp with Hargreaves lansdown
Buy FTSE 100 quarterly dividend payers monthly until you retire via there monthly savings? Profit? Buying them monthly is cheap as they aggregate everyone’s demand to offer cheaper dealing costs
Pick either BP or Shell
Glaxco or Astra
HSBC
Unilever
(british land and imperial tobacco are also quarterly dividend payers as far as I know but the above offers a good spread of sectors)
£50 each or more (watch out for high unit share prices like Unilever and Astra..)
When you have £500 worth of dividends and / or government contributions then buy a chunk of whichever one has performed the worse.
I think this would be good at a starting point of say 30? What do you guys think? I have other holdings but am basically doing the above in my Lisa and will continue to do so until I am 40 probably...
I know I could buy funds to spread my risk but the management fees compound nastily over time..
I also know that your employer might offer some contributions but generally speaking the schemes they are using are that poor mostly that you would probably outperform them...
Buy FTSE 100 quarterly dividend payers monthly until you retire via there monthly savings? Profit? Buying them monthly is cheap as they aggregate everyone’s demand to offer cheaper dealing costs
Pick either BP or Shell
Glaxco or Astra
HSBC
Unilever
(british land and imperial tobacco are also quarterly dividend payers as far as I know but the above offers a good spread of sectors)
£50 each or more (watch out for high unit share prices like Unilever and Astra..)
When you have £500 worth of dividends and / or government contributions then buy a chunk of whichever one has performed the worse.
I think this would be good at a starting point of say 30? What do you guys think? I have other holdings but am basically doing the above in my Lisa and will continue to do so until I am 40 probably...
I know I could buy funds to spread my risk but the management fees compound nastily over time..
I also know that your employer might offer some contributions but generally speaking the schemes they are using are that poor mostly that you would probably outperform them...
How is being concentrated in half a dozen companies and only 4 sectors suitable for a pension provision?
Just look at the 5 year share prices of all those companies. Difference between the peak and low is massive.
Why does having a quarterly dividend make a difference?
Unfortunately I am currently the employer, after Jan though when I take a new job it will be matched by a 15-20% employer contribution.
When you get decent holdings in each company it allows you to compound the income quicker buying quarterly dividend payers?
Over a long time frame (say 20 years) you need to be buying them at big peaks and lows to cost average the shares..
I know what you are saying about being too concentrated but too many shares and you end up tracking the market but with higher dealing costs than buying say a FTSE 100 tracker. Having a few holdings gives your portfolio some conviction?
But how do you know that low won't occur when you actually need to divest? How do you know one of those companies won't have a massive crash in it's share price (yes conversely they may also have a massive rally)?
I'm not sure how having smaller quarterly dividends is better than having one big annual dividend. They are of equal value. As you are aware a dividend is simply a way of divesting from a company (share price goes down by the dividend value).
I'm not sure how having smaller quarterly dividends is better than having one big annual dividend. They are of equal value. As you are aware a dividend is simply a way of divesting from a company (share price goes down by the dividend value).
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Conviction is worth less than zero.
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I know nothing about SAS ISAs, is there an element of management involved or is just pay in and forget about it after initial set up? I'm interested but it looks like a right ball ache.
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It can be as much of a ballache as you want to make it.
Generally people over complicate it, and end up not doing as well as they could have if it was simple.
It can be as simple as:
- open an account on a trading platform, say at Hargeaves Lansdown
- open a Stocks and Shares ISA (there's a transfer process if you need that)
- buy a fund with low fees, which is diverse. say Vanguard LifeStrategy 80%
- add more to the fund whenever suits you, within your ISA allowance obvs.