Planning for Retirement

Yours truly has just passed 60 and supposedly lucky to have a defined pension for the last 39 years. Just about to get to 50% of take home pay plus we have other savings. Plan to retire as soon as possible.
 
Currently maxing yearly pension contributions and hope to continue to do so for as long as I can. Have 2 rentals which will be mortgage free by age 60. Own home will be mortgage free by 60. Reasonable amount of savings. Have a business which might be worth something when I come to retire.

This is the 17 year plan anyway. Much can happen in that time - and it usually does!
 
Theophany said:
There are rules against it, HMRC classify it as recycling. Unsurprisingly, they take a dim view of people doing it and give them several inches of the fiscal marital aid to discourage it.

https://adviser.royallondon.com/tec...ns-and-tax-relief/recycling-of-tax-free-cash/
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Cheers, i had assumed there'd be something against it but hadn't looked into it properly with still being some way off.

I have a friend who's close to 55, he plans to take the 25% tax free lump sum and then use that to live off and stick his entire salary into his pension for a few years which is then matched at around 18%. Not sure if that still counts following that flow chart.
 
Martynt74 said:
I have a friend who's close to 55, he plans to take the 25% tax free lump sum and then use that to live off and stick his entire salary into his pension for a few years which is then matched at around 18%. Not sure if that still counts following that flow chart.
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I assume he's on £40k or lower?
 
Martynt74 said:
Cheers, i had assumed there'd be something against it but hadn't looked into it properly with still being some way off.

I have a friend who's close to 55, he plans to take the 25% tax free lump sum and then use that to live off and stick his entire salary into his pension for a few years which is then matched at around 18%. Not sure if that still counts following that flow chart.
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It might do. It's impossible to say without any concrete figures. There is a part further down the page about a significant increase in contribution levels following taking the tax free cash triggering recycling rules.

As @booyaka points out, if it's broadly tax neutral you're probably fine, in which case I'd question the logic of touching the one pot of money you have that is inheritance tax exempt. Again, hard to say without concrete figures on everything.
 
Irish_Tom said:
That's a helpful calculator.

I've looked into it again, and based on 3% employer contributions, I'm still not sure it's worthwhile.

It would equate to just over £1,000/year employer contributions, which sounds great. But comparing The People's Pension 100% Equities investment to Vanguard Target Retirement 2050 (which is what I'm currently using), the management and transaction fees are higher and the performance is lower.

I feel like I'd be better off just bunging in an extra £100/month to my SIPP, rather than changing to the workplace scheme.

The only downside I can see to my current setup is that, because I'm using salary sacrifice, I don't get the Government 20% top-up on my contributions…

It's not simple, is it!
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Right, I've done some sums. Switching to The People's Pension would work out at about £230 extra a month by the time I'm ready to take out an annuity.

If I stuck with my SIPP and upped my contributions by £100, the difference would still be £95/month in TPP's favour.

Even though the fees are higher and the return is lower, it does seem to work out better.

Interestingly, it's only because of the Government top-up that this works. If it was just my contributions plus the 3% employer contributions with The People's Pension, it would work out worse than if I kept my SIPP and just increased my contributions.

I believe I'll have to pay an extra £60/month National Insurance if I come of salary sacrifice. But, as I said, I've just paid off my student loan so even with the additional NI and a slight increase to my own pension contributions, I should still be about £60/month better off.

Time to talk to my employer I guess.
 
Coming up to 34. Currently pay 8% and employer plays 10%.

I throw a small sum at my S&S isa a month and just let that build. Not enough to miss but enough to accumulate nicely over time.

I'd like to retire at 60, but that might not work if we have kids haha!
 
I have an employer pension and an actively managed SIPP where all my previous employer pensions go. It has a mixture of stocks, shares, ETF's and funds. My wife doesn't have a current pension so I actively manage mine to make as much as possible for both of us when we retire. However when she goes back to work she will contribute as much as possible to her workplace pension.
Based on my family history I will be lucky to live past 70 anyway!!!
 
Apols, can’t see how to put on a new post! Briefly:
47 yrs old, scattered pensions, mostly NHS (current). Considering local gov job. Is this daft re pension? Similar salary. Any advice appreciated!!
 
Jenny Suttie said:
Apols, can’t see how to put on a new post! Briefly:
47 yrs old, scattered pensions, mostly NHS (current). Considering local gov job. Is this daft re pension? Similar salary. Any advice appreciated!!
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I'm not clued up on public sector pensions, but if it was for a personal, company backed pension I'd recommend consolidating all your old pensions into a SIPP. You will pay less charges and potentially make a bigger return. If you grouped them all, put them in a Hargreaves Lansdown SIPP and then invested into a couple of large, well performing funds you would probably earn more than just leaving them alone.
 
I can’t afford to pay into mine at the moment, I’m covering expensive for me and my mothers living costs and covid the last year and a half has just been really bad. She can’t work unfortunately, fairly high risk, it simply isn’t worth it. She has now had her first jab so that is a one step in the right direction.


Her business was doing well just prior to covid unfortunately it’s beauty related and she was unable to continue it. Due to this and the limited benefits she does receive I pretty much cover all our costs myself, but she’s my mom and I need little reason to help her.


I can’t afford to pay into my pension, I literally need any penny I have to get by. It’s so depressing. My company has a great scheme, hopefully things improve. It’s so difficult to plan for my future right now.
 
Allnamestaken said:
I can’t afford to pay into mine at the moment, I’m covering expensive for me and my mothers living costs and covid the last year and a half has just been really bad. She can’t work unfortunately, fairly high risk, it simply isn’t worth it. She has now had her first jab so that is a one step in the right direction.


Her business was doing well just prior to covid unfortunately it’s beauty related and she was unable to continue it. Due to this and the limited benefits she does receive I pretty much cover all our costs myself, but she’s my mom and I need little reason to help her.


I can’t afford to pay into my pension, I literally need any penny I have to get by. It’s so depressing. My company has a great scheme, hopefully things improve. It’s so difficult to plan for my future right now.
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How old are you? Good job on doing the honorable thing. Don't be overtly generous where it isn't required, though.
 
dLockers said:
How old are you? Good job on doing the honorable thing. Don't be overtly generous where it isn't required, though.
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30, I’m not overly generous it isn’t much, she lives with me it’s just our bills food, things her benefits can’t fully cover. While it isn’t a lot of money, it’s enough that I can’t save anything right now. I don’t earn a huge amount right now so that’s really what makes things harder than otherwise would be.

She is my mom, brought me up herself, sacrificed everything to do so, worked all her life. This is the least I can do, her business wasn’t running quite long enough to qualify for assistance so she received bare ones benefits right now. Once I feel it’s safe for her to return to work then things will improve. Unfortunately you just can’t trust people to contain themselves these days and it’s always others you have to worry about with covid.
 
Allnamestaken said:
30, I’m not overly generous it isn’t much, she lives with me it’s just our bills food, things her benefits can’t fully cover. While it isn’t a lot of money, it’s enough that I can’t save anything right now. I don’t earn a huge amount right now so that’s really what makes things harder than otherwise would be.

She is my mom, brought me up herself, sacrificed everything to do so, worked all her life. This is the least I can do, her business wasn’t running quite long enough to qualify for assistance so she received bare ones benefits right now. Once I feel it’s safe for her to return to work then things will improve. Unfortunately you just can’t trust people to contain themselves these days and it’s always others you have to worry about with covid.
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You're still 'young' and it won't take long to catch up providing you stick to your plan. I was in a similar position up until not so long ago and earnings have fixed the majority of my problems.
 
dLockers said:
You're still 'young' and it won't take long to catch up providing you stick to your plan. I was in a similar position up until not so long ago and earnings have fixed the majority of my problems.
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I hope so :/ sorry I dunno why I was jabbering on my personal issues. My main point really was I can’t even contribute to it at the moment. That might sound silly to some, I’m sure I’m not the only one in this position though. I really need to push for higher earning power.
 
Allnamestaken said:
I hope so :/ sorry I dunno why I was jabbering on my personal issues. My main point really was I can’t even contribute to it at the moment. That might sound silly to some, I’m sure I’m not the only one in this position though. I really need to push for higher earning power.
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For sure. Finding a partner who can help strengthen your position may be a slightly higher priority for you than others (traversing a tricky line here so don't take it out of context! I don't mean go and find yourself a rich chicka [although it may help :)]!).
 
Basher said:
Gosh that's a depressing way of looking at life!
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Good of you to take out my qualifier to the comment! What I meant was don't go and bag yourself a wife who is equally reliant on your financially if you at all can keep it in the pants.
 
dLockers said:
Good of you to take out my qualifier to the comment! What I meant was don't go and bag yourself a wife who is equally reliant on your financially if you at all can keep it in the pants.
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Or just find someone you love, why focus so much on their financial position!?
 
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