Retirement

[Matt Hopkins]

Bingo
That's the bit I wasn't getting .
I actually used my back allowance just last year and it was of use but I didn't max out anything so I've went astray in my thinking . If say you're on 40k and putting your standard amounts in a pension through work ,deciding one year to put 40k in a pension is a big jump with a nice top up . So it is useful

So if you you used carry forward allowance you must be earning more than £60k and put more than £60k in?
Also the example you've used isn't carry forward it's just a normal years contributions, if you have the cash to do it obviously

 

[Shambo]

does anyone take their work based pension and remove money so they can put it into another pension that they feel will give a better return?

probably a stupid Q but I am trying to learn about pensions - when you start claiming your private pension do you agree at the start point what your pension will be and then thats it forever or does it change year on year? do you get it as a monthly payment like you did a salary?

 

[Edinburgh Black Cat]

does anyone take their work based pension and remove money so they can put it into another pension that they feel will give a better return?

probably a stupid Q but I am trying to learn about pensions - when you start claiming your private pension do you agree at the start point what your pension will be and then thats it forever or does it change year on year? do you get it as a monthly payment like you did a salary?

I have done that. But be careful. I think I may have screwed myself out of an earlier retirement.

If the workplace pension is older, and has a protected pension age of 55, then you may be delaying when you can access the funds if you open a newer private pension and transfer the funds to that.

 

[Shambo]

I have done that. But be careful. I think I may have screwed myself out of an earlier retirement.

If the workplace pension is older, and has a protected pension age of 55, then you may be delaying when you can access the funds if you open a newer private pension and transfer the funds to that.

cheers. I have only started thinking of pensions in the last year or so and am in my mid 40's, so much of this is a new baffling world to me


May I ask what % (including employer contribution) are people putting into theirs? I have always just matched what my employer was putting in, but have now started increasing it

 

[JAZZMANB]

So if you you used carry forward allowance you must be earning more than £60k and put more than £60k in?
Also the example you've used isn't carry forward it's just a normal years contributions, if you have the cash to do it obviously

Yeah,you're right, as I say I thought I was using my back date thing but wasn't really .I'm in switch off mode now

 

[Shambo]

What is this pension allowance thing you are talking about?

 

[moanjam]

So if you you used carry forward allowance you must be earning more than £60k and put more than £60k in?
Also the example you've used isn't carry forward it's just a normal years contributions, if you have the cash to do it obviously

I suppose like @Nookie Bear said if you've maxed your ISA and pension allowances, extra in your SIPP is probably the way forward even without tax relief as long as it's performing well and you don't need access to the money.

 

[Matt Hopkins]

I suppose like @Nookie Bear said if you've maxed your ISA and pension allowances, extra in your SIPP is probably the way forward even without tax relief as long as it's performing well and you don't need access to the money.

Not sure about that. I'm retired now so none of that would affect me anyway I'm on decumulation not accumulation Off out on my bike now, might spot Paddy McAloon on the track again then have a bit decumulation at the Shepherd on the way back

 

[Darlo1973]

does anyone take their work based pension and remove money so they can put it into another pension that they feel will give a better return?

probably a stupid Q but I am trying to learn about pensions - when you start claiming your private pension do you agree at the start point what your pension will be and then thats it forever or does it change year on year? do you get it as a monthly payment like you did a salary?

Several ways of doing it. The old way (pre-2014) is that you took a regular payment ("annuity") which was either flat rate or inflation linked. The Coalition government introduced "pension freedom" which allow you to treat your pension fund as a big savings account and withdraw ("drawdown") money as you wanted, either as monthly payments or lump sums, which was the biggest pension reform in decades. Private pensions also allow a tax free lump sum to be paid when you qualify for it. This is currently capped at 25% but there is talk of the government reducing the percentage or maximum value.

I think now something like 80% of people choose the drawdown method as there were a lot of cases of bad advice given to people taking annuities. My dad was one of them. He was never really savvy about money (always took out extended warranties on everything he bought) so came out with a lot lower pension than he could have got.

 

[Pantomime Mackem]

cheers. I have only started thinking of pensions in the last year or so and am in my mid 40's, so much of this is a new baffling world to me


May I ask what % (including employer contribution) are people putting into theirs? I have always just matched what my employer was putting in, but have now started increasing it

Put in as much as you can. After my partner and I got together and they bought half my house (so it became our house) and the mortgage was paid off I hurled money into mine. I always had the mindset it was dead money I wouldn’t see until long into the future. Now I’m getting a very pleasant surprise. Tax relief and investment growth do wonders.

 

[Shambo]

Put in as much as you can. After my partner and I got together and they bought half my house (so it became our house) and the mortgage was paid off I hurled money into mine. I always had the mindset it was dead money I wouldn’t see until long into the future. Now I’m getting a very pleasant surprise. Tax relief and investment growth do wonders.

yeah I am starting to get this mindset tbh. I have a funny mortgage situation so I am not looking to pay it off, but am looking to just maximise my monthly pension contributions

I was paying in a combined 10% last summer when I started looking into it all, then upped it to 13%, then 16%, and then yesterday made that 18%. Will give it a few months there to see how affordable it is but my main aim is to take that to 20%.

I also feel bad as I am the only full time earner at home so any extra money I put into my pension is money I take away from my family.

 

[moanjam]

Not sure about that. I'm retired now so none of that would affect me anyway I'm on decumulation not accumulation Off out on my bike now, might spot Paddy McAloon on the track again then have a bit decumulation at the Shepherd on the way back

Enjoy

 

[Shambo]

Several ways of doing it. The old way (pre-2014) is that you took a regular payment ("annuity") which was either flat rate or inflation linked. The Coalition government introduced "pension freedom" which allow you to treat your pension fund as a big savings account and withdraw ("drawdown") money as you wanted, either as monthly payments or lump sums, which was the biggest pension reform in decades. Private pensions also allow a tax free lump sum to be paid when you qualify for it. This is currently capped at 25% but there is talk of the government reducing the percentage or maximum value.

so you could ask your pension company to pay you a monthly amount so it continues feeling like a salary? I live a somewhat chaotic life and that definitely appeals to me, though i do appreciate taking an annual lump sum means you can invest the years money into an ISA maybe and then use that as your money for the year, getting a return along the way

I went to see an IFA earlier in the week and was put off by them wanting £500 to give me advice. I then learned yesterday that everyone is entitled to withdraw £500 (amazing coincidence!) from their private pension a max 3 times in their to be used only for paying an IFA for advice

 

[Pantomime Mackem]

yeah I am starting to get this mindset tbh. I have a funny mortgage situation so I am not looking to pay it off, but am looking to just maximise my monthly pension contributions

I was paying in a combined 10% last summer when I started looking into it all, then upped it to 13%, then 16%, and then yesterday made that 18%. Will give it a few months there to see how affordable it is but my main aim is to take that to 20%.

I also feel bad as I am the only full time earner at home so any extra money I put into my pension is money I take away from my family.

I get that but by planning for your security in later life you’re also planning for your family’s.

It’s a balancing act. You absolutely need to live in the moment and enjoy it with your loved ones, accumulating fantastic experiences and memories. I’m currently reading Die with Zero and it’s really thought provoking. It doesn’t say “spend it all now” but it’s really interesting on how to balance things.

Die with Zero: Getting All You Can from Your Money and Your Life: Amazon.co.uk: Perkins, Bill: 9780358567097: Books

 

[Darlo1973]

so you could ask your pension company to pay you a monthly amount so it continues feeling like a salary? I live a somewhat chaotic life and that definitely appeals to me, though i do appreciate taking an annual lump sum means you can invest the years money into an ISA maybe and then use that as your money for the year, getting a return along the way

I went to see an IFA earlier in the week and was put off by them wanting £500 to give me advice. I then learned yesterday that everyone is entitled to withdraw £500 (amazing coincidence!) from their private pension a max 3 times in their to be used only for paying an IFA for advice

Remember if you choose to drawdown, that the money in your pension stays invested and will continue to grow so there really is no need to transfer an annual lump sum to an ISA to get further returns (though will tax implications depending on how much you take out)

I'm still working out the finer details (I still have a few years to go) but I don't see why you can't set up a drawdown as a monthly direct debit to your current account, just like a salary

Some free info:

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You can also get a free advice session from Pension Wise - though I have no idea how useful they are

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[Shambo]

cheers!

 

[Hair Flick]

Food for thought for some in the article from the Telegraph.

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[Copacabana]

I suppose like @Nookie Bear said if you've maxed your ISA and pension allowances, extra in your SIPP is probably the way forward even without tax relief as long as it's performing well and you don't need access to the money.

Unless you want to retire before 55/57 then best to load up your ISAs ?

 

[moanjam]

Unless you want to retire before 55/57 then best to load up your ISAs ?

Yeh like I said as long as you don't need access to the money

 

[Shambo]

Unless you want to retire before 55/57 then best to load up your ISAs ?

isn't just putting the max you can into your work based pension scheme the best thing as you save the tax & NI?

I have 1 ISA S&S with a small number in and I am going to have to spend it soon as my house has no guttering and I would quite like that before autumn!