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A bit of advise really just had my pension forecast come through and its absolutely awful , been paying in for 30 years obviously not enough. Question- would you stop paying?
Shirley the question should be, should I be paying in more?
Not enough as in the investments have performed poorly, or you've not been putting enough in, or both? In any case, I'd keep paying, probably more, and look to rejig my investments to hopefully do better than they have been doing.
And I'd be assessing it all more often than once every thirty years.
As a limited company pension contributions are very good in respect to tax relief, it's 20 to 40%?
I decided to do my own thing. I don't think a 'normal' pension is a great fit for the self employed. By that I mean properly self employed not borderline IR35.
I put any spare cash into a mix of (small scale) property and stocks and shares ISAs. To me this has the benefit that it is making money now so helps top up my income during leaner times and smooths out the troughs and is also fairly readily available so there as an insurance policy should I not be able to work. That means I can justify putting extra money into it.
I must admit I'm winging it a bit, might be doing it completely wrong. Seems to be working ok so far though.
Do you not get an annual statement - mine has a prediction of final amount when I retire on it.
(And I'm opposite having seen near 20% growth this year, plus my contributions...)
Matt gets a quid everytime someone posts on the brexit thread...
Growth seems good on mine, but the forecast is still crap. It's the estimates of what an annuity will buy from the estimated pot will be, adjusted for inflation in todays money. When you think about what you will get and what it will buy in todays money, it's terrible.
My problem has been how much to chuck at it though. My company makes all the contributions, but it probably works out to be 10% which I guess is low, but some I know do less, some much more (but 10% of a decent salary, though that's an estimate of what my equivalent salary would be if I was permanent employed). I could crank up the contributions a lot but I don't think it will make much of a difference.
I've asked my pension adviser but one thing they won't advise is what to actually do. They'll just give you the information. Ask how much to contribute and they just say that's up to you. Also asked about the forecast being crap and they agreed and said basically don't rely on a pension alone.
Though I'd be better off if the adviser wasn't taking a nice cut from the thing also for having set it up in the first place.
More info on the Limited Company and pensions please.
We are a partnership and I have my own private pension which is nothing to do with the company.
I’m assuming the government chips in the 20% on that. What benefits does going limited have over that?
I too saw a pensions advisor and all he said was pay more.
Zippy - you can make payments from your LtdCo directly into your private pension. These are classed as Employer contributions. They do not get the 20% uplift that personal payments do, but you do not pay tax on them personally and they act to reduce the profits of your LtdCo, so reducing your Corporation Tax bill.
Much simpler and tax-efficient to do that than pay into the pension yourself from money paid to you by the LtdCo (i.e. divs/salary) and the associated claiming back of tax allowances.
That's not to say however that the contributions into your pension don't need to rise, wherever they're being paid from. They probably do, everyone's probably does.
[i]My problem has been how much to chuck at it though. My company makes all the contributions, but it probably works out to be 10% which I guess is low, but some I know do less, some much more (but 10% of a decent salary, though that’s an estimate of what my equivalent salary would be if I was permanent employed). I could crank up the contributions a lot but I don’t think it will make much of a difference.[/i]
Very general rule of thumb - halve your age, that's the %age of your income that you should be saving towards your retirement.
When I was contracting I was putting (from the LtdCo into a private pension) the equivalent of three days billings a month.
Now I'm a permie (sad face) the company puts in 10% and I put in about 15%
Thanks for the replies
Matt gets a quid everytime someone posts on the brexit thread
I would rather be skint from here on than read some of those arguments now...