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Retirement


I know there some basic tips like taking 4% pa out of your private pension. Are there any tips or recommendations on savings split between ISA's and pension, maybe 20% ISA, 80% pension? Or are circumstances too varied.
 
Tuono said:
I know there some basic tips like taking 4% pa out of your private pension. Are there any tips or recommendations on savings split between ISA's and pension, maybe 20% ISA, 80% pension? Or are circumstances too varied.
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I tried to look around for some kind of 'golden' ration but couldn't find it. I think purely for minimising tax 40% in an isa would work out well but as with most stuff like this it's very personal and often generic figures are more a hindrance than a help.
 
Tuono said:
I know there some basic tips like taking 4% pa out of your private pension. Are there any tips or recommendations on savings split between ISA's and pension, maybe 20% ISA, 80% pension? Or are circumstances too varied.
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I haven't got any precise figures in mind but my plan would be to have enough in ISAs to fund the first few years of retirement (and maybe a bit of part-time work) so that I wouldn't need to touch the private pensions. Phase 2 would be mainly private pensions and then finally the state pension will kick in. There would also be the option to downsize the house to free up some equity.
 
Darlo1973 said:
I haven't got any precise figures in mind but my plan would be to have enough in ISAs to fund the first few years of retirement (and maybe a bit of part-time work) so that I wouldn't need to touch the private pensions. Phase 2 would be mainly private pensions and then finally the state pension will kick in. There would also be the option to downsize the house to free up some equity.
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We plan to use them both together. Between us we can get 1k a week long term and pay zero tax. Can't see the point in taking them seperately as well end up paying tax on just pension drawdown.
 
Tuono said:
I know there some basic tips like taking 4% pa out of your private pension. Are there any tips or recommendations on savings split between ISA's and pension, maybe 20% ISA, 80% pension? Or are circumstances too varied.
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I,m looking into a tax efficient bucket strategy with glidepath. Might be worth you googling and seeing if this strategy might be a fit for you.
 
Tuono said:
I know there some basic tips like taking 4% pa out of your private pension. Are there any tips or recommendations on savings split between ISA's and pension, maybe 20% ISA, 80% pension? Or are circumstances too varied.
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Circumstances are too varied.

But a big factor that isn't discussed imo is career trajectory. A low paid graduate with longer term prospects of much higher salary is better stocking up on ISA while on basic rate tax then flip to higher pension contributions when they reach higher rate tax band/child support limits/£100k tax cliff etc.

The conventional wisdom of 'put as much in your pension as young as possible' is flawed imo.

As a rule though - always do whatever you need to in order to maximise employer contributions.
 
TAD said:
Was about to say this. I'd be planning on taking what I could from pension tax free then supplementing with tax free ISAs. I'm no expert mind 😃.
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I am taking £12570 pa from SIPP and also have taken some of my 25% tax free lump sum, and am living off that. I haven’t needed to touch the ISAs yet, but they are there when needed.
Can’t see the benefit of taking from ISA before taking from pension, unless pension not yet an option because under 55 (soon to be raised to 57).
 
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Barista said:
I am taking £12570 pa from SIPP and also have taken some of my 25% tax free lump sum, and am living off that. I haven’t needed to touch the ISAs yet, but they are there when needed.
Can’t see the benefit of taking from ISA before taking from pension, unless pension not yet an option because under 55 (soon to be raised to 57).
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Use your ISA to avoid paying tax in the early years. That's what I'll be doing. I don't intend on paying any tax for a few years in early retirement using ISA and UFPLS drawdown strategy.
 
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I was hoping there would be a sweet spot between isa's and pensions but as I suspected every case is different. I'm at about 75% pension, 25% isa's at the moment.
 
Tuono said:
I was hoping there would be a sweet spot between isa's and pensions but as I suspected every case is different. I'm at about 75% pension, 25% isa's at the moment.
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Just checked and I'm 73% pensions 27% ISAs (Cash & S&S) plus a bit of instant access cash savings for splurging/emergencies but I keep it below the savings interest threshold.
 
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