[Closed] Retirement plans - who's actively working toward one...

We have a place in the sun (actually its in Kerry so it's a place in the rain) and our plan would be to move there and rent out our london home to augment our pensions. The barrier is likely to be our parents and having to care for them until we are quite old too, nobody warns you about that bit when you're young. However our house in Kerry has been the second best thing we've bought (house in London being the best financially).

Its become interesting this. Theres quite a few more “just saving a bit” and hoping for the best and/or accepting a mediocre lifestyle after mandarory retirement age than i expected from STW. I guess im in that camp. I have a current 5% matched work pension and two pitiful private ones that have been going since i was 18. Im sure one of the private ones is contracted out of serps but not sure what that means tbh.

Should finish the mortgage at 60. I save regularly into Premium Bonds and although hope to win enough to pay it one day winnings are represented as reinvestment and it effectively sits as a “retirement” fund to be used in 20 years or so as appropriate. I work in Sales so we live off my/Mrs K flat salary and use the comissions to clear annual essentials like car and house insurances, and for extras like Hols etc a year in arrears so we can pay cash, theres always a chance one day they’ll be enough for a mortgage overpayment to reduce the term.

Finally, for us we’ll hope to use equity in our London home to retire into a detatched house for two either in rural England or the Carribean on a one way trip. Id be happy with a small job, decent Rum on a porch in the evening and a bike ride every day until its time to go.

My biggest hope on reaching retirement age is that by that time ive done enough to set my kids on a good path financially and morally to live decent lives as mine enters its twilight years.

Always worth adding you can check your ni record at :

https://www.gov.uk/check-national-insurance-record

If you have never done it its worthwhile, I found 2 years MIA from about 18 years ago, all sorted now.

mortages are paid off next year when I am 57

I have a partial NHS pension - I am going to retire on my 60th birthday.

We won't have a lot of money - with bits of pensions and income from a rental we will have around £20 000 pa. that will have to do. We will get a bit for letting our flat out as a holiday let while we go walkabout

Plans - loads of them. First year we will walk the Cape Wrath trail as a warm up then off to Bolivia to solo a 20 000' peak, then Patagonia for some trekking. Second year will be road trip around aus and a tour of NZ. Other plans are to cycle down the Rhine and up the Danube with excursions into Transylvania and Bohemia, Follow a cricket tour in India, over winter with a friend in the Yukon. We also want to do a really long walk of a couple of thousand miles

I save regularly into Premium Bonds and although hope to win enough to pay it one day winnings are represented as reinvestment and it effectively sits as a “retirement” fund to be used in 20 years or so as appropriate.

Why premium bonds and not a stocks and shares ISA? I have money in premium bonds but it's only sitting there until I can pay it into a stocks and shares isa in April next year.

Why premium bonds and not a stocks and shares ISA?

I didn't mention it but I do have a stocks and shares ISA albeit low risk. FWIW including the tax efficiency the Premium Bonds have made more money in the last year.

I transferred my army pension pot into the fire service so I could get full pension and leave a little bit earlier. Unfortunately now I have to work an extra ten years anyway, I've requested my army pot back out but been told it's gone, been eaten by the pot as they put it. It counts for something but I can't remove it.
So plans ruined again, they already made changes in 2006
So at the min I pay about 400 a month into a pension that I've to stay in ten years longer and it's worth loads less. But I can't pull out as they've stopped us being able to transfer it out and if I put it on hold I loose any index linked benefits I've got left after the 2006 changes and can't access it til 67. Funking govt asshats

No mortgage now (but also no pension) so save for next 10 years ( although this will mean getting a job again stop being semi-retired)

Pack kids off to Uni (I should be 50 by then)

Then sell house in London and move to Wales / Yorkshire and live like a Lord and retire properly at 50

Do the odd day/week of consulting for pocket money

[s]

Always worth adding you can check your ni record at :

Top tip from @phead, I found a couple of holes in mine. As a story my father made some back payments years ago which totalled less than he subsequently received in benefits (this was due to him retiring early so having stopped paying NI). A Labour MP had raised this in the HoC that Govt should be compelled to write to people to tell them this.

Regrading the pension cap of £1m - certainly something which p.sses me off - when it was introduced it was £1.8m and instead of growing with inflation its been slashed to £1m. As above Civil servants and MPs (eg Corbyn, Abbott etc etc) have pensions worth £1.8m but the rest of us who have to save for our retirement are capped at half that.

The posters (@sandythepig) point is relevant as “large pots of cash” are an easy target for the Government, remember property stamp duty was introduced on “high end” / “luxury” homes originally but now applies to many very normal houses. People should save for their retirement but there are other ways than through a pension plan

Heroin.

In ferms of retirement income as I said above most “retired” people I know do something to earn money and keep the brain and body active. Many rent out some or all of their house or use home exchange to get “free” holiday accommodation. One friend closed down his GRP fabrication business and now does driving / boat moving / maintenance (specialist in certain type of racing boat) and in the last year has had jobs (all expenses inc flights) in Sweden, Italy, Japan, Brazil and the US as well as work in the UK and is paid to sail/race. When I saw him last week I suggested he start partially renting out his house in France as he is there so little. In UK you are allowed £7,500 pa tax free from that source

Regrading the pension cap of £1m - certainly something which p.sses me off - when it was introduced it was £1.8m and instead of growing with inflation its been slashed to £1m. As above Civil servants and MPs (eg Corbyn, Abbott etc etc) have pensions worth £1.8m but the rest of us who have to save for our retirement are capped at half that.

In fairness for your generation that amount that you got for free means you seriously owe the pot so don't get too pissed off. Perhaps a downsizing tax on housing is also needed.

Keep buying Bitcoins and hope I can afford a Lambo at retirement I guess.

In all seriousness, not working towards retirement, but financial independence, yes, most definitely. I love what I do and I don't think I'll retire from it fully.

So increased by labour and cut by the tories?

Labour were responsible for most of the recent policies to encourage people to save more for their retirement. All that ever gets talked about though is the "tax grab" on dividends.

I was paying anything above inflation on my pay rises into the pension

You can only strike a balance between spending what you have to fund a reasonable lifestyle now and 'investing/saving' the rest as wisely as you can. It's as simple as that to me. Retirement has always seemed something that was a long way off, as it gets closer I'm having to think about when that time will be vs reduced income once that step is taken. Assuming I'll just know when that time is right but it's not for a few years yet.

I do think the gap between the haves and have nots continues to widen and those in the South will increasingly look to retire further North to release capital, personally I'd not let them in!

This site seems to suggest you need 1/2 to 2/3 of your full time salary to maintain your lifestyle.

Thing is..........

After pension contributions and the mortgage I (30, living in the SE) was* left with about 50% at best. Once you factor in the cost of turning up to work (suit, dry cleaning, lunch, miles in the car etc) I probably didn't actually have 25% as disposable income.

50-66% would be dreamland. These pension calculators are definitely aimed at those who were old enough to get on the ladder before house price inflation.

*post shit hitting the fan I don't even make my half of the mortgage anymore let alone a pension.

Always worth adding you can check your ni record at :

Oops I appear to have 9 missing years!! 8 of those I was at Uni though...

After pension contributions and the mortgage I (30, living in the SE) was* left with about 50% at best. Once you factor in the cost of turning up to work (suit, dry cleaning, lunch, miles in the car etc) I probably didn't actually have 25% as disposable income.

Bizarrely that's a good thing isn't it? If you're seeking to maintain your current lifestyle which is funded by 25-50% of your salary but without having to budget for pension contributions, mortgage, travel and work expenses then like you say, having a pension that pays 50-66% of your income means you're quids in. However, I wouldn't start paying less into your pension pot though just on that basis though!

This site seems to suggest you need 1/2 to 2/3 of your full time salary to maintain your lifestyle.

The earlier I retire the more money I'd need as being fitter, I'd want to do more activities eg skiing etc

Bizarrely that's a good thing isn't it?

Well, that's kinda like saying I'm poor now, but hey, at least you won't have unrealistic expectations of quality of life when you retire!

Regrading the pension cap of £1m - certainly something which p.sses me off - when it was introduced it was £1.8m and instead of growing with inflation its been slashed to £1m. As above Civil servants and MPs (eg Corbyn, Abbott etc etc) have pensions worth £1.8m but the rest of us who have to save for our retirement are capped at half that.

It makes little odds, you either pay the tax on what's above the lifetime cap or pay income tax on it. Either way acures roughly the same tax bill. The cap system just gets the money back to HMRC sooner rather than waiting to get a little bit of it each year.

And you have a million pounds in the bank, when it comes to retirement planning the only problem you'll have is coke and one hooker or two!

Going to ride off the canyon drop at rampage on my e-bike!!!

But seriously 39 Recently separated 24 years left on a mortgage I’m paying £1035 pcm on solely. Another 15/20k needs to go into house before its done.

Cashed out because of above purchase and frantically putting all I can into fixing property up and now paying off credit cards .. owe mother 7.5k – will have this all done by next year.

Only pension I have is historic and good NEST one running now ..

Hoping for Shares and sale of the business I am in 10 Years

Will – over pay mortgage and downsize once older (3 Bed)

And you have a million pounds in the bank, when it comes to retirement planning the only problem you'll have is coke and one hooker or two!

£1m only gets a joint life annuity of £21k per annum....

£1m only gets a joint life annuity of £21k per annum....

what's the point in that?

you could stick it a savings account that gave you 1% interest, draw down £25K p/a and it would last 51 years!

Well the annuity would be index linked and guaranteed, so no matter what the markets did you'd get paid...

It makes little odds, you either pay the tax on what's above the lifetime cap or pay income tax on it.

The tax rate on anything above the limit is 55% so it makes quite a bit of difference. As pointed out it only gives you a annuity of 21k so assuming you'd be getting full state pension (circa 10k)that means that for a pensioner the 55% tax rate kicks in a 31k. Unless you have a final salary pension where it will kick in at about 60k. As you can see it really does make quite a difference.

My mortgage should be paid off by the time I'm in my early 50s at the current rate, although I'm hoping overpayments will put a dent in that. I'm also hoping for a move out of London at some point which should make that money go further.

As for saving, I'm a reasonably aggressive saver and putting a lot into my pension and ISA while I can. I'm also saving up for other nice to haves such as bikes and the like (I don't really enjoy buying things on credit).

I have no idea when I'll get to retire, and I enjoy my job at the moment but who knows where things will be in 5 years let alone 25. I'm just trying balance enjoying my life at the moment with saving for the medium and long term. Luckily for me I guess, enjoying life is more of a 'get outside on the bike' than 'go out and drop shedloads of money drinking in clubs' kinda thing.

So how do you go about planning this then? Is it best to use a (fee not commission) IFA type person on just read up n things and go DIY?

Mrs and I both have relatively decent public sector pensions but, truth be told, I don't really have any useful knowledge about them, other than we both pay into them and have done forever. We also have a couple of ISA's and LISA. Mortgage wil be paid off by the time I am 60 (at the latest) I don't want to work beyond 60 so I guess being able to retire early requires some planning. Just not sure how to go about planning it.

£1m only gets a joint life annuity of £21k per annum....
what's the point in that?

[i]you could stick it a savings account that gave you 1% interest, draw down £25K p/a and it would last 51 years![/i]

That in a nutshell was why I focused on putting money into the house, so when I traded down and released some capital, it would be capital that I was in control of......and if I popped my clogs early at least my kids would get some of it.

Obviously George Osbourne changed the rules and said you didn't have to buy an annuity, which was a massive bonus to people with pensions and a very surprising move!

Retirement, Hahhahahahhhhaaaaaaa.

Death camps will be in place by the time I retire to ensure I am not a burden on the limited resources of the world.

Think about it, you were one of X kids, you had Y kids, they will have Z kids, by the time you reach your later years you'll just be a burden anyway.

Well the annuity would be index linked and guaranteed, so no matter what the markets did you'd get paid...

sorry but I'm very much a novice here. When you say index linked, do you mean linked to inflation? And how do the markets relate?

£1m only gets a joint life annuity of £21k per annum....
what's the point in that?

you could stick it a savings account that gave you 1% interest, draw down £25K p/a and it would last 51 years!

don't look at me, I don't know about 'savings' 😆

I would have said 3 or 4%, but I thought someone would say "don't be ridiculous, you can't get 4% on a savings account" and I don't actually have a clue what's available so I erred on the side of caution

I would have said 3 or 4%, but I thought someone would say "don't be ridiculous, you can't get 4% on a savings account" and I don't actually have a clue what's available so I erred on the side of caution

4% is the figure usually quoted with SIPPs as the return needed to keep them as a viable option longer term when drawing down.

The Government has just finished taking evidence about the ability to encash your pension at 55 (i.e. take all the money and pay tax on it)

This commenter makes a valid point re MPs and the benefits of the "cash out" scheme but the rant is quite amusing

Why wouldn't you put it into something that pays 4% interest and take £40k a year?

You wouldn't get a savings account paying that, you'd struggle to get 1% on £1m.

To better 1% you'd need to invest in stocks, which has inherent risk.

When you say index linked, do you mean linked to inflation?

Depends what type of annuity you buy, but you normally they are index linked at CPI/RPI with a cap (say 3% per annum). So it grows each year with inflation.

The draw down / annuity argument boils down to risk:
- annuity is guaranteed for life, index linked and would cover your partner as well)
- draw down has the risk that the markets crash and you either take the same % each year (less money) or the same money (higher %) and risk draining the fund earlier.

There is no 'right' answer, just options with different pros and cons.

Does anyone really understand pensions? I'm clueless.

As I said above, I'v got an old RBS staff pension, I left there in 2009 after 9 years, but I get very high quality letters from them couple of times a year saying how great they are etc, anyway, they go to my Mums address, so after 8 years of not living there I've just updated it, added the Wife and kids as beneficiaries in case I die etc, there was a box for "quote" so I filled it in.

Put my retirement date in as my 67th Birthday, (I was supposed to down tools at 60 with a clause to do so at 58 if I want to! - that would have been nice).

Anyway, 2 options - take £40k and £6k a year after till I die, or take £10k a year*.

Now, I once had an IFA look at it for me and they said "don't touch it, don't play with it, leave it the hell alone" it was that good, but on the face of it, that seems very generous, I probably paid about £25k into it over 9 years, admittedly there's inflation to consider and interest and all that, but £10k a year is £833 a month, add that to the state pension of £640 (I know, I know, don't all laugh at once) but that's £1500 a month give or take, which seems an awful lot consider the tales of woe around at the moment - another 25-30 years of pension contributions and I could be sitting very comfortably. No mortgage, no kids to pay for.

I'm almost tempted to opt out of auto enrolment,

*I don't know what effect inflation has on the payments, if any.

What am I missing here? I would expect to have to make a lifetime of payment to get that sort of amount.

My Current life expectancy is 81.5 based on a few factors, if I retire at 67 that means 14.5 years of retirement - £145k of pension payments, for a £25k investment and 50 years compound interest.

As I said above, I'v got an old RBS staff pension,

Q1: Is it a Defined Benefit / Final Salary type pension or a Defined Contribution Pension?

I'm guessing the former...

footflaps - Member
As I said above, I'v got an old RBS staff pension,
Q1: Is it a Defined Benefit / Final Salary type pension or a Defined Contribution Pension?

I'm guessing the former...

Thanks, closet match I can find to those terms are "Persevered Benefits" although I think it might be called that because in 2008 they stopped new entries into our pension scheme (and begged us to switch to the new one, the Union told us in no uncertain terms not to do so).

[quote=P-Jay ]Does anyone really understand pensions? I'm clueless.
As I said above, I'v got an old RBS staff pension, I left there in 2009 after 9 years, but I get very high quality letters from them couple of times a year saying how great they are etc, anyway, they go to my Mums address, so after 8 years of not living there I've just updated it, added the Wife and kids as beneficiaries in case I die etc, there was a box for "quote" so I filled it in.
Put my retirement date in as my 67th Birthday, (I was supposed to down tools at 60 with a clause to do so at 58 if I want to! - that would have been nice).
Anyway, 2 options - take £40k and £6k a year after till I die, or take £10k a year*.
Now, I once had an IFA look at it for me and they said "don't touch it, don't play with it, leave it the hell alone" it was that good, but on the face of it, that seems very generous, I probably paid about £25k into it over 9 years, admittedly there's inflation to consider and interest and all that, but £10k a year is £833 a month, add that to the state pension of £640 (I know, I know, don't all laugh at once) but that's £1500 a month give or take, which seems an awful lot consider the tales of woe around at the moment - another 25-30 years of pension contributions and I could be sitting very comfortably. No mortgage, no kids to pay for.
I'm almost tempted to opt out of auto enrolment,
*I don't know what effect inflation has on the payments, if any.
What am I missing here? I would expect to have to make a lifetime of payment to get that sort of amount.
My Current life expectancy is 81.5 based on a few factors, if I retire at 67 that means 14.5 years of retirement - £145k of pension payments, for a £25k investment and 50 years compound interest.

and that, in a nutshell, is why none of these schemes are open to new entrants.

I have a similar set of figures for an 8yr stint in the civil service. What I paid in bears no relation to what I will get out.

and that, in a nutshell, is why none of these schemes are open to new entrants.

I have a similar set of figures for an 8yr stint in the civil service. What I paid in bears no relation to what I will get out.

Sweet, for once this Gen X'er managed to grab some Boomer benefits.

Annuities seem to be an enormous con.

I’m sure someone in FS must have pissed off Osborne and he removed the obligation to buy one as retribution.

Plan A: Pay off mortgage next 5 years. Pay kids through Uni (youngest is 10), get made redundant or pack in work. Downsize. If all goes to plan I'll be done when I'm 54. Maybe earlier if Jeremy Corbyn pulls his finger out and abolishes tuition fees.

Plan B: (maybe A if something tragic occurs): Wait for Mrs Daz's elderly relatives to die, pack in work if any there's any inheritance left after care costs.

Plan C: Retire at 65 as 'officially' scheduled. Needless to say this isn't going to happen! I'd rather be a poor mid-50 year old than a miserable and rich 50 year old employee.

Got no real plans to move away. I like it where I am.

Hmm. This triggered me to look at my SIPP, originally opened by my employer. But I'm confused about drawdown and annuity on retirement.

a) Drawdown

Assuming I had investments worth £100k when I retired, I can opt to sell some and be paid an immediate £25k (25%), and then have the remaining £75K paid monthly/annually until its gone, albeit it until I take it, its still invested?

b) Annuity - I buy an insurance product for £100k. That insurance product pays me an agreed monthly sum - lets call it £1000 - until I die. In theory the money runs out in 100 months, and the insurance company makes money if I die before then, but if I'm still alive after that time they kept paying, and thats their risk.

Is that right?

One other thing: There's no point having cash in a SIPP, its doing nothing, right? It may as well be invested in a "fund"?

I’m sure someone in FS must have pissed off Osborne and he removed the obligation to buy one as retribution.

George Osborne's greatest legacy IMO.

P-Jay it sounds like you are benefitting from getting a lump some built up early and intrest is doing the leg work for you.

25k over 35 yrs at 10% is 800k!
25k over 35 yrs at 7% is 300k

I too have an old RBS fund and its returned 13% over the last two years.

How the rich get richer IMO, wish I had known when younger!

Annuity - I buy an insurance product for £100k. That insurance product pays me an agreed monthly sum - lets call it £1000 - until I die

I think you’ll get about £300 pm for 100k so will need to live for 25yrs plus to get your money back(30 yrs with interest).

Presuming retirement at 67 are you going to live to 97?

a) Drawdown

Assuming I had investments worth £100k when I retired, I can opt to sell some and be paid an immediate £25k (25%), and then have the remaining £75K paid monthly/annually until its gone, albeit it until I take it, its still invested?

Up to you, you can hold the balance as cash, invest it in shares / guilts. The general thinking is you invest in high yielding shares and take the dividends as yearly salary and keep the capital invested. 4% is about the max you could get away with doing that at the moment. Obviously if we get a big recession we may well have another "bonfire of the dividends" and things would be sticky for a while..

b) Annuity - I buy an insurance product for £100k. That insurance product pays me an agreed monthly sum - lets call it £1000 - until I die. In theory the money runs out in 100 months, and the insurance company makes money if I die before then, but if I'm still alive after that time they kept paying, and thats their risk.

Yes. The yearly rate depends on what type of annuity and your risk profile. Basic options are:
1. Fixed sum / index linked at CPI/RPI (normally with a max % cap)
2. Single or Joint. Single stops when you die, joint covers your spouse with a reduced rate, normally 50%
3. Standard / enhanced - if you have lung cancer when you retire etc, you can normally get an enhanced rate based on the fact you won't live long....

The rates are very low right now... http://www.sharingpensions.co.uk/annuity_rates.htm

A £1m lump sump gets a £21k per annum joint index linked annuity!

If interest rates ever rise back up to a higher norm, things should get better.

P-Jay it sounds like you are benefitting from getting a lump some built up early and intrest is doing the leg work for you.

25k over 35 yrs at 10% is 800k!
25k over 35 yrs at 7% is 300k

I too have an old RBS fund and its returned 13% over the last two years.

How the rich get richer IMO, wish I had known when younger!

Sounds that way, I was lucky I suppose, I was pig shit thick at 23 when I joined the Bank (not much better now) but the Pension scheme wasn't optional, you couldn't opt out but you didn't pay for it either.

Most of my mates are only now getting pensions, kicking and screaming into Auto-Enrolment at 40. 20 years of interest missed and a post-crash scheme at that.

I too have an old RBS fund and its returned 13% over the last two years.

That's not actually very good.

The £ devaluation (brexit) would have got you 15% and markets have been booming over the last few years, so 20% per annum over the last two years is pretty easy to achieve (basic tracker).

Krypton the law allows you to take a max tax free lump sum of 25% - most people do this. They then either buy an annuity with the 75% or try and defer that so they can take another tax free lump sum in (say) 5yrs - that flex depends on what sort of pension you have

As per Dazh (Osbourne's most useful achievement I would agree with) you can these days cash it all in at 55 (and pay tax as if it where income on the 75%). I will be 55 in February and am actively looking at this option playing off tax paid versus flexibility in how I reinvest and most important not having to buy an annuity at today's (and IMO the future's) appalling rates.

Thanks footflaps

The rates are very low right now

I'm only 45, so I've another few years to think about this. FWIW I have 2 funds in my SIPP, one made 20% pa and the other 11%.

My maths are poor but assuming I had that £100k today and invested no more, with an average 15% interest growth from above it'd be worth £1.6m in 20 years time?

Crikey...

Edit:

A £1m lump sump gets a £21k per annum joint index linked annuity!

Ok, so thats cool. In my example above if we retired today me and Mrs K could be looking at a £300k payout and a £21k income on top of the state pension for life. Gives me a useful understanding of where I'm at.

a) Drawdown

Assuming I had investments worth £100k when I retired, I can opt to sell some and be paid an immediate £25k (25%), and then have the remaining £75K paid monthly/annually until its gone, albeit it until I take it, its still invested?

Yes, that's my understanding although I'm not sure if you need a min amount in the pot to be allowed to do that, I know there were caps but I think you can now take the lot at 55, or take 25% and leave the rest invested, That's my plan.

My maths are poor but assuming I had that £100k today and invested no more, with an average 15% interest growth from above it'd be worth £1.6m in 20 years time?

The wonder of compound interest but you're not going to get 15% growth every single year. I'd be basing your plans on 7%. Although my fund has grown 31% this year that does include contributions though.

BTW £100k invested over 20 years at 15% growth year on year would give you £1,423,177.16 at the end of the period.

That's highly unlikely to be the case though.

My maths are poor but assuming I had that £100k today and invested no more, with an average 15% interest growth from above it'd be worth £1.6m in 20 years time?

You won't get anything like 15% per annum over 20 years!

Even 7% long term is pretty optimistic.

Maybe 5% pa over 20 years.

You also have to account for inflation, so say that's 2% per year and your fund grows at 5% per year, you're only making 3% in real growth.

Agreed realistically I look to achieve 4%, but 7% is probably closer to what it'll achieve.

That would get your £100k to £210,684.92 or £361,652.75 respectively, some way off the £1.6m you were hoping for 🙂

I had a private pension with RBKC for 11 years I think. Not sure I can move it out of the UK.

Trying to transfer UK state pension to France. Not easy.

Luckily I have a UK property with lots of equity, the rent is covering the mortgage.

And living mortgage free in France.

I'd best keep saving... 😐

And all I have learned from this thread is that I am properly clueless when it comes to pensions and retirement plans.

I really think I need some professional advice. You lot are all talking in a foreign language.

Trying to transfer UK state pension to France. Not easy.

Why do you need to? Currently you get it paid to you and index linked with the triple lock.

Although, post Brexit, no one has a clue or has even thought about what will happen. Although another 20% devaluation in the £ is pretty much a certainty if Brexit goes ahead...

I will be 55 in February and am actively looking at this option playing off tax paid versus flexibility in how I reinvest and most important not having to buy an annuity at today's (and IMO the future's) appalling rates.

You don't have to buy an annuity at the moment anyway, and if its a significant amount that will be one hell of a tax bill you will be paying, especially if you plan on earning any other income in the year in which you do it.

A bit off topic....but perhaps a heads-up for some people...

A couple of pages back there was a link to the government gateway page to check NI contributions.

Well out of curiosity, I had a look.
It looks like while at uni I am down about £75 over 3 years but have enough years to make that up. I can't pay it now for those years as it was too long ago.

BUT, I also looked at my income tax & for some reason my company has told the tax man that this July my taxable income was £10,300!!
I have asked the payroll dept to check into this, but it was a bit of a heads-up that you shouldn't always assume that the correct numbers have been given to HMRC. I don't remember having a massive tax payment that month though, so I wonder if it's a clerical error....
Worth checking though...

A bit off topic....but perhaps a heads-up for some people...

A couple of pages back there was a link to the government gateway page to check NI contributions.

Well out of curiosity, I had a look.
It looks like while at uni I am down about £75 over 3 years but have enough years to make that up. I can't pay it now for those years as it was too long ago.

BUT, I also looked at my income tax & for some reason my company has told the tax man that this July my taxable income was £10,300!!
I have asked the payroll dept to check into this, but it was a bit of a heads-up that you shouldn't always assume that the correct numbers have been given to HMRC. I don't remember having a massive tax payment that month though, so I wonder if it's a clerical error....
Worth checking though...

Thanks for the PSA.

My income seems about £5k shy of what I actually get paid, which is odd - we get childcare vouchers, so maybe that's it.

Oddly though, It says I made zero contributions in 2013/14 - I started a new job that year and it says they still haven't reported any income.

How many years do you need? I've got 23 years so far.

My income seems about £5k shy of what I actually get paid, which is odd - we get childcare vouchers, so maybe that's it.

Salary sacrifice pension?

That comes off before the HMRC see anything.

Good god I have 34 yrs of full contributions @50 yrs old!

Salary sacrifice pension?

That comes off before the HMRC see anything.

Only for the last month, Childcare Vouchers are Salary Sacrifice.

Childcare Vouchers are Salary Sacrifice.

Don't know anything about them, as we have Cats instead of children.

Have you tried Catcare Vouchers? Tax free, very handy.

Have you tried Catcare Vouchers? Tax free, very handy.

Would have been handy with the last two, we self insured not knowing we had got two very illness prone rescue kittens. We bumped into our Vet's receptionist in M&S the other day, she knows us by name and all our cats details as do all the staff at the vets. Cost us £1000s to get to know them all that well! We've even met our Vet's children and their pets....

P-Jay - Member

My income seems about £5k shy of what I actually get paid, which is odd - we get childcare vouchers, so maybe that's it.

I think that's how salary sacrifice shows up. They introduced it a while back at my workplace & now my 'official salary' is less than my actual. I don't fully understand why, but it is all above board.
I suspect if your childcare vouchers are coming out as well under salary sacrifice, your salary will look less than it is.
Perhaps worth checking though?

I think that's how salary sacrifice shows up. They introduced it a while back at my workplace & now my 'official salary' is less than my actual. I don't fully understand why, but it is all above board.

Yep.

The deduction is made from your gross salary and put into your pension / buys cat care vouchers. As it is from your gross salary, it comes before any tax has been deducted.

They then declare what is left to HMRC as your 'salary' and you get taxed on that.

All legal, just one of many 100s of tax breaks our system has.

So, what sort of income is everyone on-target / hoping / aiming / playing-the-lottery for when they retire?

Must admit I'd love to get £20k "in todays money." (so probably 30k or so of actual money)

we self insured not knowing we had got two very illness prone rescue kittens

A life lesson, I feel 🙁

Between two of us £3k a month, that's £1k from my wifes pension, same from mine and drawing £1k from investments. Then when we both reach state pension age we'll get about another £1200.

mrmonkfinger - Member
So, what sort of income is everyone on-target / hoping / aiming / playing-the-lottery for when they retire?

Must admit I'd love to get £20k "in todays money." (so probably 30k or so of actual money)

About the same I'd guess, I don't think that's going to be a problem (although admittedly before I checked I assumed it would be), this is of course assuming:

1) state pension still exists, that's 50/50 at best
2) The UK isn't in the developing world by then.
3) inflation doesn't 'kill' me.

I'm already at £18k, but I guess I've got to beat inflation.

Of course that's based on being Mortgage free by then - and my all too rosy interpretation of what I've learned today - but if I had £1500 a month (in today's money), with no mortgage/rent, no debt and the kids long left the nest (youngest would be 30) and a bus pass, the world would be my lobster.

I'm still waiting for the rug to be pulled.

One thing we might have not considered, we estimate £20k in 'todays' money being £30k then...

I retire in 27 years, if I look back 27 years to 1990 - £20k in todays money was £9600 in 1990 - for me, £40k is nearer the mark.

One thing we might have not considered, we estimate £20k in 'todays' money being £30k then...

I don't, I retire in less than 5 years 🙂

I don't, I retire in less than 5 years

Ah, £20k = £30k in 56 years, is probably a safer bet ha ha. Let's hope not though eh?

That is the $64,000,000 question.

I think 2/3 of current income is very achievable, without eroding the capital too much from a mix of ISAs, pensions and other investments.

I’ve done and re-done the calculations over and over, but the important variables are, well, variable. Future interest rates, returns and govt policy can’t be predicted.

We have been lucky, and can probably look forward to a more comfortable retirement than most, but just how comfortable and exactly when we are willing to take the plunge is a bit up on the air.

I’d certainly hope it to be in the next 5 years, but the next 5 years have the potential to be one almighty poo storm politically and financially so who knows.

So, what sort of income is everyone on-target / hoping / aiming / playing-the-lottery for when they retire?

Personally, its far enough off that predictions are pointless (I'm 46 IIRC). We could have none / one / two big recessions in the next 20 years. Brexit could affect the economy anywhere between -5% and -25%. I could lose my job and start burning up my savings rather than increasing them, etc, etc...

So, I just save as much as I can whilst I can....

Appreciate, variables gonna vary.

Must admit I'm not banking on the state pension bailing us out and my calculations only feature it as the Brucey Bonus.

Although I assume the government will reduce rather than remove, in similar style to what it has already performed e.g. work more until senility sets in, lower cap to pension for newer entries to workforce... rather than knobbling folk who've already got their max allowance built up.

About £25k pa plus State Pension when it arrives for me.

Plus a tiny wee bit I'm building up in a workplace pension at the moment.

I don’t have a pension, aparrently 1in 3 people don’t according to the radio the other day.

Sure I will be fine.

I pointed that out in previous pages and I suspect many posting in here are the well provisioned exceptions.