Pensions Pensions
Page 1 of 3 123 LastLast
Posts 1 to 10 of 29

Thread: Pensions

  1. #1

    Godlike like

    SallyAnne is too good to be a permie

    SallyAnne's Avatar
    Join Date
    Oct 2006
    Location
    Sunderland
    Posts
    8,836

    Default Pensions

    Hi All,

    I know this is a really boring thread....

    I got a pensions advisor in a while back to talk to me about what to do about getting a pension.

    He advised paying £1k per month from my company over 15 or 20 years (this would give me a retirement age of 50ish and about £600 per month in todays money, which is nice enough).

    Have you lot got a simailar thing? Is this to much to be paying? Any advice?

    Cheers,
    Sal
    xxx
    The pope is a tard.

  2. #2

    Contractor Among Contractors

    scooby has no reputation

    scooby's Avatar
    Join Date
    Jun 2007
    Location
    Up North
    Posts
    1,492

    Default

    you sure on that figure? looking at this http://www.pensioncalculator.org.uk/, a retirement age of 55, current age 31, lump sum and no spouse pension. entering £1000 for company contributions sees a lumpsum of £107k and a weekly pension of £192 (or drop the lump sum and get a weekly income £256)

    that is probably so far out though...
    I didn't say it was your ******* fault, I said I was blaming you!

  3. #3

    Super poster

    rootsnall has no reputation


    Join Date
    Jul 2005
    Posts
    2,966

    Default

    It's a good idea tax and NI wise as you'll pay it gross from your Ltd. Only problem is you can't get your hands on it again until you are 55. You will pay tax on it when you take it out at 55+ but he theory is it won't be at the higher rate and you won't pay NI on it. If you can afford it I reckon 12K taken out of your higher rate band is a good idea. Look around for a pension scheme with low charges, you'll get one for maybe 0.7% per annum of funds under management and they shouldn't charge you anything for paying the money in the first place.

    ps. I just make an annual lump sum payment when I've weighed up how much I have to spare
    Last edited by rootsnall; 8th July 2008 at 08:12.

  4. #4

    Contractor Among Contractors

    Spartacus is too good to be a permie

    Spartacus's Avatar
    Join Date
    Sep 2005
    Location
    London
    Posts
    1,391

    Default

    Quote Originally Posted by scooby View Post
    you sure on that figure? looking at this http://www.pensioncalculator.org.uk/, a retirement age of 55, current age 31, lump sum and no spouse pension. entering £1000 for company contributions sees a lumpsum of £107k and a weekly pension of £192 (or drop the lump sum and get a weekly income £256)

    that is probably so far out though...
    £1000/month for 24 years = £288,000 in contributions. If you stick that in a high interest savings account (assume 4% net), even if the interest only compounds once a year that will return nearly £500,000 after 24 years.

    Just a thought.
    I'm Spartacus.

  5. #5

    Richer than sasguru

    DimPrawn is a fount of knowledge

    DimPrawn's Avatar
    Join Date
    Jul 2005
    Location
    Brexit Britain
    Posts
    34,551

    Talking

    Quote Originally Posted by Spartacus View Post
    £1000/month for 24 years = £288,000 in contributions. If you stick that in a high interest savings account (assume 4% net), even if the interest only compounds once a year that will return nearly £500,000 after 24 years.

    Just a thought.
    Take off inflation and that equates to about £100K.

    So saving money and paying tax on the interest is actually a good way of losing money.

    Instead spend £1000/month on subsidising a BTL, and in 24 years it will be worth squillions. YOU CAN'T LOSE!
    I was miserable and depressed, but CUK turned it all around. Now I'm depressed and miserable.

  6. #6

    Banned

    Cyberman has no reputation


    Join Date
    Apr 2007
    Location
    Berkshire
    Posts
    4,892

    Default

    As far as I am concerned, since Brown's raid in 1997 pensions simply are not worth it, unless you are a 40% taxpayer perhaps, unable to avoid paying that level of tax except through a pension. My strategy is not to pay 40% tax by drawing no more from my company than I need, to remain within the lower band.

    Salary linked pensions whereby an employee and his company both put in separate contributions were worthwhile as the return was 'guaranteed' but since then we are purely reliant on growth within a 'money purchase' type of pension scheme. This has been decimated because 20% has been lost through removing tax credits, year on year.

    Bear in mind also that you cannot get to most of that money (75%) and it remains with the insurance company when you die. Charges also eat into your growth to a major extent. Consider a low cost SIPP (Self invested private pension) if you really are committed to having a pension.

    Personally, I would go for property every time, as rents and capital appreciate in the long term and that capital can be accessed and also passed on in your will eventually.


    Good luck, whatever you decide.

  7. #7

    Richer than sasguru

    DimPrawn is a fount of knowledge

    DimPrawn's Avatar
    Join Date
    Jul 2005
    Location
    Brexit Britain
    Posts
    34,551

    Default

    Quote Originally Posted by Cyberman View Post
    As far as I am concerned, since Brown's raid in 1997 pensions simply are not worth it, unless you are a 40% taxpayer perhaps, unable to avoid paying that level of tax except through a pension. My strategy is not to pay 40% tax by drawing no more from my company than I need, to remain within the lower band.

    Salary linked pensions whereby an employee and his company both put in separate contributions were worthwhile as the return was 'guaranteed' but since then we are purely reliant on growth within a 'money purchase' type of pension scheme. This has been decimated because 20% has been lost through removing tax credits, year on year.

    Bear in mind also that you cannot get to most of that money (75%) and it remains with the insurance company when you die. Charges also eat into your growth to a major extent. Consider a low cost SIPP (Self invested private pension) if you really are committed to having a pension.

    Personally, I would go for property every time, as rents and capital appreciate in the long term and that capital can be accessed and also passed on in your will eventually.


    Good luck, whatever you decide.
    WHS. But not at the moment.

    The worst aspect of pension is the inflexibility, and the fact that your hard earned pot of money has to be traded for an annuity, and hence you cannot pass on this wealth to your children or grand-children and that after paying £500K for an annuity, you will probably cark it 3 months later and make some actuary in the City very rich.
    I was miserable and depressed, but CUK turned it all around. Now I'm depressed and miserable.

  8. #8

    Contractor Among Contractors

    Shimano105 has no reputation

    Shimano105's Avatar
    Join Date
    Jul 2005
    Posts
    1,064

    Default

    So, despite having given away money into a personal pension fund over the last 12 years, would I be as well just cancelling contributions to it now?

    I realise that the pittance in there will be frozen till such a time as it is worthless, however I just do not want to throw away another penny to the carnts. I'd rather invest it in a savings account when all's said and done.

    I certainly don't want to pay an IFA for some 'impartial' advice (I bet if you asked 20 different IFAs you'd get 20 different recommendations)

  9. #9

    Banned

    Cyberman has no reputation


    Join Date
    Apr 2007
    Location
    Berkshire
    Posts
    4,892

    Default

    Quote Originally Posted by Shimano105 View Post
    So, despite having given away money into a personal pension fund over the last 12 years, would I be as well just cancelling contributions to it now?

    I realise that the pittance in there will be frozen till such a time as it is worthless, however I just do not want to throw away another penny to the carnts. I'd rather invest it in a savings account when all's said and done.

    I certainly don't want to pay an IFA for some 'impartial' advice (I bet if you asked 20 different IFAs you'd get 20 different recommendations)


    I stopped contributions in 1997 but also suffered under the Equitable Life debacle, where 20,000 pounds turned into 14,800 pounds after 10 years 'growth' !!! I transferred into a SIPP last year and I am convinced that I can do better by my own means.

    Excuse me for being cynical, but experience has made me realise that property is best, despite the current blip. Insurance companies want you to invest in pensions so that THEY can make money. Nobody will 'nick' your bricks and mortar.

  10. #10

    Double Godlike!

    Moscow Mule is too good to be a permie

    Moscow Mule's Avatar
    Join Date
    Mar 2007
    Location
    London
    Posts
    10,579

    Default

    Quote Originally Posted by Cyberman View Post
    I stopped contributions in 1997 but also suffered under the Equitable Life debacle, where 20,000 pounds turned into 14,800 pounds after 10 years 'growth' !!! I transferred into a SIPP last year and I am convinced that I can do better by my own means.

    Excuse me for being cynical, but experience has made me realise that property is best, despite the current blip. Insurance companies want you to invest in pensions so that THEY can make money. Nobody will 'nick' your bricks and mortar.
    Property appreciates at 2% a year over 40 years, but you've got a point about actually having something for your money. If you're happy with that, go for it.

    I'm planning on using my ISA allowance for the next 30 years to provide my pension.
    ‎"See, you think I give a tulip. Wrong. In fact, while you talk, I'm thinking; How can I give less of a tulip? That's why I look interested."

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •