Pension stuff, how's it all looking ? HAve you prepared ?

[Nobby]

To compound my plans my guess is that within 15yrs they’ll make the state pension means tested and if you retire with anywhere near a decent pot then you won’t get it anyway even though you will have factored it into your plan and will struggle without it.

Yes, it's just a matter of time, and I wonder how many years notice will be given.
That is what they have in Australia. My neighbour "Bloody Graeme" told me recently that he just had to purchase a few things to take him below the threshold.

[IccyV2]

You could pay the self employed stamp. I paid it from around 1989 to 1993, I think it was £4.50 a week.

It's currently about £15 a month, we both pay it, but the last payment will be June/July 2026, then there seems to be a gap, then starting from 2028 you can buy a voluntary class 3 stamp which is roughly £1000 a year.

The best way around it is to earn enough to pay NI, or earn between £125-250 a week and then you don't pay NI because you're under the threshold, but you do get a full class 1 stamp credit as if you have paid it. If you earn <£125 a week you do not get any NI credit, so a dinner lady doing an hour a day five days a week on minimum wage won't get it, someone could do that for 50yrs and still not be entitled to any pension.

Tbf, if they've done 5 hours a week for 50 years I'm not sure they deserve a pension. Its got to have a certain level of fairness

The system is inherently not fair as it's designed for the balance of givers and receivers to be unequal, but we should aim for reasonable and I'm not seeing reasonable. I'm not going to put forth an argument because the discussion could then become potentially politically charged, but I like to see facts so at least people can make more informed decisions.

Going back to the thread title, have we prepared?

I think we'll end up working now until we're sixty, we'll need part-time jobs and we're happy at minimum wage. That is going to work out only slightly cash positive for us because we'll be earning money but losing our extra £5k each tax-free entitlements on interest that we'd get if we had no other income, but we need the NI contributions to get the full pension - we would have been about there by now but as I said before those years that we were self-employed and only paid 48 weeks don't count, so we're about ten years short now.

I don't think that's fair, we shouldn't have to do that, but it's the best I can do.
We have a cunning plan to hopefully make sure our kids never have to worry about money, using a plan explained to me by my sub-continent friends, I'm happy to explain that one as well but it's a longer post.

[Horse]

Going back to the thread title, have we prepared?

By 'we', do you mean 'us' or 'you'?

If us, ''ours' is:

I have a mix of pensions. A few years of final salary (which I'm taking) and several savings types (which I'm not. At some point I'll consolidate them into draw-down. Thank you, Liz & Kwazi*).

Filly's pension was fixed amount. For my final 15 years I paid the maximum into the company scheme. I'd had an AVC running for years.

We overpaid our mortgage to get it cleared early, at the same time saving fairly hard too, to build a cushion. We're debt free.

We have effectively nothing of any value in terms of investments / shares / property other than the house.

I retired at 65, state pension at 66. Filly retired at 59.

I still do occasional part-time work because I want to. As a for instance, several days in November probably covered our Christmas bills. But we could have managed happily without.

" NB this is reflection, not a political comment. My various pots dropped by 25-30%. And because I was close to retirement, they'd been transferred to 'safe' investments I've just received the annual statement for one, it's increased about 5% over the year.

Edit: both of us had fixed salary jobs, no overtime

[weeksy]

Interestingly it seems that Annuities are making a bit of a comeback at the moment due to their figures being pretty decent at 7% or so.

I'm getting closer and closer to 55 now and retirement. Part of that is going to be enforced by work and part of that will be personal preference. I still plan on doing 'stuff' which is currently still up in the air as to how i'll make my money for a few more years yet. But i need to sort an appointment with IFA in the next few months to work out plans and see what we can take advantage of really.

Using my current figures in my pension, taking a 20 year Annuity which would take me to 75 will return me £45,000 a year for the term and taking £80,000 at the start for paying things off and buying a new van to last me a while. That would realistically mean i don't massively need to work at all but i could certainly top it up with some part-time work to get me out of the house over winter.

[the_priest]

Mine has dipped slightly. Not enough to be concerning, so long as my wife and I can stash away our committed amount each year, we will, jointly, with all our pensions, have a comfortable life. Not luxurious, but comfortable. That is part of the aim. Our tax free pay-out will pay for solar on the property and a new car upfront with a little left over for the children to put into savings. But that is all hypothesis as it is still 13 or so years away!

[Horse]

My various pots dropped by 25-30%. And because I was close to retirement, they'd been transferred to 'safe' investments I've just received the annual statement for one, it's increased about 5% over the year.

Another statement today, 10% rise over the last year

However, today's was the second smallest pot, so not that much in £££ terms

[IccyV2]

Using my current figures in my pension, taking a 20 year Annuity which would take me to 75 will return me £45,000 a year for the term and taking £80,000 at the start for paying things off and buying a new van to last me a while. That would realistically mean i don't massively need to work at all but i could certainly top it up with some part-time work to get me out of the house over winter.

That's a decent pension and you must have the best part of a million in there to make £45k a year for 20yrs.
I'm guessing that was heavily contributed to by your employer because even if you've been there for 20yrs and contributed £10k a year (for example) you'd have a fraction of that in there.

I have a small old pension from the UK but it's only about £100k, so I need to put over a million into something to give me even a fairly modest pension over 25-30yrs. We worked out that if we put a million quid into an income bond and it never drops below 3% interest then we can draw down £40k a year and it'll last us into our 80's and the state pension will kick in as well at 67, but if we want to live "well" then it's looking like £2-3m in the pot.

It's a challenging amount of money for most people to find, so a decent employer contribution over 2-3 decades is a massive boost to pensions.

[weeksy]

Using my current figures in my pension, taking a 20 year Annuity which would take me to 75 will return me £45,000 a year for the term and taking £80,000 at the start for paying things off and buying a new van to last me a while. That would realistically mean i don't massively need to work at all but i could certainly top it up with some part-time work to get me out of the house over winter.

That's a decent pension and you must have the best part of a million in there to make £45k a year for 20yrs.
I'm guessing that was heavily contributed to by your employer because even if you've been there for 20yrs and contributed £10k a year (for example) you'd have a fraction of that in there.

I have a small old pension from the UK but it's only about £100k, so I need to put over a million into something to give me even a fairly modest pension over 25-30yrs. We worked out that if we put a million quid into an income bond and it never drops below 3% interest then we can draw down £40k a year and it'll last us into our 80's and the state pension will kick in as well at 67, but if we want to live "well" then it's looking like £2-3m in the pot.

It's a challenging amount of money for most people to find, so a decent employer contribution over 2-3 decades is a massive boost to pensions.

I've been very fortunate yes,

But you'd be surprised at the annuity rates, for a 20 years at £40k (a bit more actually), you're not looking near a Mill...

As always it depends on how you want to live and need to live. I won't need a great deal more than i have currently, i think

[Yorick]

Best investment is property.
Get regular rent for many years.

But the main gain is property appreciation. Most properties double every 11-15 years. Quids in

[weeksy]

Best investment is property.
Get regular rent for many years.

But the main gain is property appreciation. Most properties double every 11-15 years. Quids in

1. Rental laws have changed a lot. So no, its actually not
2. Maybe, but still involves selling it. However that also comes with massive tax issues too. Plus you need £200,000 that you'll get taxed 40% on to take out of your pension first of all.

But even in the case you have £300k to buy a property that'll bring you £12000 a year and you'll get hit with taxes on that. Its not really the same as a £40k a year pension

[Yorick]

Best investment is property.
Get regular rent for many years.

But the main gain is property appreciation. Most properties double every 11-15 years. Quids in

1. Rental laws have changed a lot. So no, its actually not
2. Maybe, but still involves selling it. However that also comes with massive tax issues too. Plus you need £200,000 that you'll get taxed 40% on to take out of your pension first of all.

But even in the case you have £300k to buy a property that'll bring you £12000 a year and you'll get hit with taxes on that. Its not really the same as a £40k a year pension

Just giving my opinion. It worked massively well for us.
Made enough in 10 years to retire and buy this lovely villa even after mouth-watering CGT.

[weeksy]

Best investment is property.
Get regular rent for many years.

But the main gain is property appreciation. Most properties double every 11-15 years. Quids in

1. Rental laws have changed a lot. So no, its actually not
2. Maybe, but still involves selling it. However that also comes with massive tax issues too. Plus you need £200,000 that you'll get taxed 40% on to take out of your pension first of all.

But even in the case you have £300k to buy a property that'll bring you £12000 a year and you'll get hit with taxes on that. Its not really the same as a £40k a year pension

Just giving my opinion. It worked massively well for us.
Made enough in 10 years to retire and buy this lovely villa even after mouth-watering CGT.

As i say, the rules have changed a lot. Plus you had a pension and multiple properties already.

[Yorick]

1. Rental laws have changed a lot. So no, its actually not
2. Maybe, but still involves selling it. However that also comes with massive tax issues too. Plus you need £200,000 that you'll get taxed 40% on to take out of your pension first of all.

But even in the case you have £300k to buy a property that'll bring you £12000 a year and you'll get hit with taxes on that. Its not really the same as a £40k a year pension

Just giving my opinion. It worked massively well for us.
Made enough in 10 years to retire and buy this lovely villa even after mouth-watering CGT.

As i say, the rules have changed a lot. Plus you had a pension and multiple properties already.

Biggest property was bought in interest only mortgage. Peanuts a month.
We knew we were selling in 7/8 years anyway

[Count Steer]

1. Rental laws have changed a lot. So no, its actually not
2. Maybe, but still involves selling it. However that also comes with massive tax issues too. Plus you need £200,000 that you'll get taxed 40% on to take out of your pension first of all.

But even in the case you have £300k to buy a property that'll bring you £12000 a year and you'll get hit with taxes on that. Its not really the same as a £40k a year pension

Just giving my opinion. It worked massively well for us.
Made enough in 10 years to retire and buy this lovely villa even after mouth-watering CGT.

As i say, the rules have changed a lot. Plus you had a pension and multiple properties already.

Yup. 'The Bottom Line' on R4 recently was discussing property rental. Lots of small scale buy-to-let-ers are jumping ship or making less than if the cash was 'in the bank' and if they borrowed to do it the situation is worse. The big operators are still going and a lot of that is low grade housing used to rinse local authorities for social housing.

The boom has bust! There's no guarantee that house prices are going to stay on the upward gradient either.

£40k+ pa, guaranteed, in retirement? Lubbly jubbly.

(I'd be a bit worried about the 20 year thing personally, but, different strokes for different folks I guess).

[Dodgy69]

Drawdown pensions invested in 'different things' should be doing pretty well these days, stock markets doing well. With a good wedge in there, you can draw a monthly income and not chew on the capital too much.

As said, state pension should kick in when 67 ish, allowing us to reduce the drawdown from the pension so you may only need to pull it hard for a relatively short time. It's anybodies guess if state pension will eventually be means tested and the government that introduces it, will need a winky wanky deal with the other parties.

Think the tax threshold goes up to 45% after about 120k ish, possibly maybe.

[weeksy]

Just giving my opinion. It worked massively well for us.
Made enough in 10 years to retire and buy this lovely villa even after mouth-watering CGT.

As i say, the rules have changed a lot. Plus you had a pension and multiple properties already.

Yup. 'The Bottom Line' on R4 recently was discussing property rental. Lots of small scale buy-to-let-ers are jumping ship or making less than if the cash was 'in the bank' and if they borrowed to do it the situation is worse. The big operators are still going and a lot of that is low grade housing used to rinse local authorities for social housing.

The boom has bust! There's no guarantee that house prices are going to stay on the upward gradient either.

£40k+ pa, guaranteed, in retirement? Lubbly jubbly.

(I'd be a bit worried about the 20 year thing personally, but, different strokes for different folks I guess).

Well you can get 25 years as well or Lifetime with a risk of dropping dead too early of course.

I guess mine is all a bit of a personal quandary as I'll likely be leaving work 5-7 years before I'd planned and can't expect a job of similar income now if I were to get another.
I'm all up in the air with it until the next 12 months plays out as there's a lot going on this year

[Count Steer]

As i say, the rules have changed a lot. Plus you had a pension and multiple properties already.

Yup. 'The Bottom Line' on R4 recently was discussing property rental. Lots of small scale buy-to-let-ers are jumping ship or making less than if the cash was 'in the bank' and if they borrowed to do it the situation is worse. The big operators are still going and a lot of that is low grade housing used to rinse local authorities for social housing.

The boom has bust! There's no guarantee that house prices are going to stay on the upward gradient either.

£40k+ pa, guaranteed, in retirement? Lubbly jubbly.

(I'd be a bit worried about the 20 year thing personally, but, different strokes for different folks I guess).

Well you can get 25 years as well or Lifetime with a risk of dropping dead too early of course.

I guess mine is all a bit of a personal quandary as I'll likely be leaving work 5-7 years before I'd planned and can't expect a job of similar income now if I were to get another.
I'm all up in the air with it until the next 12 months plays out as there's a lot going on this year

One option is to get more than you spend pa out of an annuity (but trying to avoid losing out to higher tax rates) and feeding the excess into eg cash ISAs or the like. That will accumulate - with interest. Be tax free when you do dip into it AND not disappear if you cark it.

Have to avoid the temptation to spend it as it comes in though.

[JackyJoll]

Living on rent from properties isn’t a pension. It’s a job.

[Horse]

... if we want to live "well"

IIRC @Count Steer posted figures a while back that suggested how much would be needed to receive low / comfy / woo-hoo!* pensions.

[* Albeit not those actual terms]

What does "well" mean for you, and how would you be prepared to compromise?

[Count Steer]

... if we want to live "well"

IIRC @Count Steer posted figures a while back that suggested how much would be needed to receive low / comfy / woo-hoo!* pensions.

[* Albeit not those actual terms]

What does "well" mean for you, and how would you be prepared to compromise?

Here y'go. One thing it doesn't factor in is what you have become accustomed to. If you're used to a lifestyle in line with a household income of, say, £300k pa then maybe £61k won't feel quite so comfy? Same thing in the (unlikely) reverse situation.

https://www.which.co.uk/money/pensions- ... mlv7V7sVe9