Pension fund performance - do you monitor yours, how is it doing, do you actively change it?
- Thread starter danlightbulb
- Start date
Soldato
If you're a couple without kids and don't have excessively high housing costs (e.g. bought 5+ years ago and haven't been punished by rate increases too much), you have to be wasting money on all sorts of tat you don't need or going on constant holidays to not manage to save a decent amount every month. People waste money in all sorts of ridiculous ways when you dig into their spending.
Soldato
I'm moving £70k from L&G to Vanguard but L&G have contacted me saying that I have a 'protected retirement date' of 55 that will be lost if I move. I'm starting to have second thoughts as it could be quite useful to keep my options open. I guess I could just move my L&G funds into a higher return (risky) fund and transfer all my new investments to vanguard going forwards instead
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Soldato
I wouldn't give up a protected retirement date of 55 tbh. Pick a fund you're happy with and leave it there.
Can you continue using it, so your entire pension is 55?
Can you continue using it, so your entire pension is 55?
I had this exact same situation but it didn't bother me as my ISA is there to bridge the gap and that particular pension wasn't huge. For me the tradeoff with consolidation, lower fees and better flexibility is worth it. I think some providers will allow you to keep the protected pensionable age (could be wrong!) but Vanguard certainly don't.
It'll depend on what your projected vs desired retirement age is - not so much of an issue if it looks like 57 but if you're younger and the government push retirement age up while retaining the 10-year link with SIPPs it could be a real problem.
If you currently manage the L&G fund yourself then I'd just pick a low cost global index tracker or something else you're happy with and leave it.
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Soldato
Yeah there’s all sorts of world and market trackers on there and some very interesting mutual funds.
Currently I’m 45% into development, 5% in emerging and 50% in a mutual fund.
Oh yeah if you're a couple on 70k-100k (2 tax free allowances) with modest costs (no kids, am average house) you could easily save 20pc each..
But many do have kids, a mortgage, a life.
But I would say most people would need to be at that 70k+ point to be able to do it at all.
I mean 20pc is a hell of a lot at that salary when life is generally expensive. There will be some edge cases sure. But I still expect most saving 20pc are earning 100k+ as a couple.
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Soldato
The main principal of fire is to not spend money that does not meaningfully improve your life
As such after basic expenses are covered, there is nothing for me to spend on.
You earn more than me, and i am well past 20%.
Yeah I certainly could put in 20pc and that's a life choice for me. But I don't. As I wouldn't want to live just covering basic expenses.
I put my 40pc tax bracket into my pension and some into my isa (for emergencies, for the next house move etc).
But I do have a low cost base. Low electric bill (for now), don't really eat out, don't drink, don't have kids, good mortgage rate, no car finance.
Probably wouldn't be able to put in 20pc if I had the typical lifestyle creep that comes with a bigger salary.
Soldato
What are you receiving UC for and how much a month does that come to? Are you working?
I don't really know much about UC TBH
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It's the wife getting it because she's a carer.
We're in a rubbish situation I work but get all these limits put on me purely because we have a disabled son that my wife needs to take care of.
Every payrise I get they reduce her income (every £1 I earn they take 60p off her) so we're now held back, can't save. The limits shouldn't count for careers if you ask me.
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Soldato
Ouch that does suck, and makes it kind of pointless earning more.
If I was you I would consider ways you can take advantage of the situation though, for example working less (i.e. doing 4 days instead of 5) especially if the loss of earnings comes back at the same rate. So every £1 less you earn, your wife gets paid 60p extra.
Balancing act of course, I don't know the figures.
If you can't really use an ISA you should still be able to pay into SIPP/Pension, which could be worth maximising instead if you're not planning on buying a house.
If I was you I would consider ways you can take advantage of the situation though, for example working less (i.e. doing 4 days instead of 5) especially if the loss of earnings comes back at the same rate. So every £1 less you earn, your wife gets paid 60p extra.
Balancing act of course, I don't know the figures.
If you can't really use an ISA you should still be able to pay into SIPP/Pension, which could be worth maximising instead if you're not planning on buying a house.
Already own a house.
Capped at £6k savings, which for me isn't even savings that's just what we have lying around day to day to be honest.
I will be putting more in my pension for sure, at least I can retire at 57, well it's 57 now who knows what it'll be by the time I get there.
I couldn't even take the 25% tax free up front it would mean the wife got got £0 income from UC until we get back below the £6k.
Comparing VWRP ALL-CAP EX-UK and VHVG as common World Index Funds from Vanguard that gets mentioned in this thread a lot and VUAG (S&P 500) thrown in for good measure.
Labour drops plan to reintroduce pension saving cap
I expect it's probably not by choice for Labour to do this, but just reflective of the complexity of reintroducing it in a way which a) doesn't cause even more senior NHS consultants to decide to fully retire and b) doesn't have other unintended consequences to the way in which people decide to save for their own retirement.
£1M sounds like a crazy large amount to have in a pension pot but over time (and inflation) many will need to have this sort of amount saved in order to have a comfortable retirement - especially if they have any aspiration to retire a bit early.
I expect it's probably not by choice for Labour to do this, but just reflective of the complexity of reintroducing it in a way which a) doesn't cause even more senior NHS consultants to decide to fully retire and b) doesn't have other unintended consequences to the way in which people decide to save for their own retirement.
£1M sounds like a crazy large amount to have in a pension pot but over time (and inflation) many will need to have this sort of amount saved in order to have a comfortable retirement - especially if they have any aspiration to retire a bit early.
It's really not a crazy large amount, it means roughly 40k a year income in todays money. If you have a decent job now it's on the tight side, particularly if you do not want to gamble and rely on the state pension system.
Caporegime
For the sake of VERY high level maths, lets assume someone earns the current national median (£35k) for their entire working life from 18 to 68.
That is an annual take home of £28,720, or £1,436,000 for the 50 years.
Obvs earnings will 'genereally' grow as you age, but you'd also not start at the national average when 18, and this isn't accounting for going to uni (hence the VERY high level qualifier at the start).
Being conservative, you could say that the average person will take home £1million over their entire working life.
That is an annual take home of £28,720, or £1,436,000 for the 50 years.
Obvs earnings will 'genereally' grow as you age, but you'd also not start at the national average when 18, and this isn't accounting for going to uni (hence the VERY high level qualifier at the start).
Being conservative, you could say that the average person will take home £1million over their entire working life.
Very high level maths.
Say they saved 10% of that per year into a pension + government top up of 20% that is £3446 per year into a pension and they increased that yearly figure by 3% every year. If they start at 25 and compounded at 6.5% over 40 years they'd have 1 million in their pot. If they hit the magic of a 10% return i.e S&P 500 long term average they'd have £2.5million. I say its possible but you need to start early. Ideally your parents will save into a JSIPP for you.