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

[weeksy]

We got rid of the politics section but the politics weren’t the problem,

Yeah it was, this is a sensible debate currently with people disagreeing on things. That's perfectly OK.

If people want it to go purely onto debates about pension options, that's easy enough

[Dodgy69]

Let's be sensible here, no one is resenting anyone for doing well in life. Iccy is obviously a very smart chap, going by his previous posts on many subjects. He has his wealth, toys and lifestyle he wants and fair play to him.

But, I do believe those living the life of great luxury should be a little more thoughtful, regarding forum posts, of those who are struggling, maybe losing their job, relationship breakdowns etc. We don't always know who is watching.

It's no biggy, not worth getting upset over, so let's not shut down the ' Pension stuff' thread, and go down the same road as the politics thread, which in hind sight just needed a 'warning for those in a nervous disposition ' type notice.

[Docca]

If ever you were in any doubt as to the risk of being in your 50s and the cost of living, look at LinkedIn. Plenty of posts over the last couple of years of people desperate to get anything. Successful folk now unemployed because of a restructure here/ AI replacement there.

The way recruitment agencies work now just adds to the misery. Folk seem to barely get an interview. Or hear back from employers.

It’s a tough gig. I don’t mind people telling us about cars/ diamonds etc, but I take umbrage about assumptions on where or what someone should be by a milestone in life.

[Count Steer]

So, back to the pensions conundrum. If you can get the right deal and the rate suits and the situation if the annuity purchaser dies mid-term and the end-date cut off (if that's what's opted for) fit with the purchasers plans then the security, stability and forward visibility will suit some people. After all, they did used to be very popular (alternatives were rather more restricted then though).

The other thing that will suit some is it removes the temptation to dive into your capital that, say, a draw-down might. It becomes, rather more like a company pension - they won't let you dip in if you suddenly fancy a world cruise either.

It's not 'all or nothing' though. You don't have to put the whole pot in an annuity as far as I know, it's just like buying an insurance policy. So a body could buy a longer term, lower monthly income annuity to provide a base level of security and play finance tunes with the rest of it. Feed it into ISAs, play the stock market, buy kruggerands, keep it under the bed or whatever depending on appetite for risk (and other things like health, dependants, mortgage).

It's a personal choice and we're all different. I wouldn't buy one but that's down to my own circumstances/pension/mortgage situation. If I hadn't got a company pension and still had a mortgage I'd be poring over the annuity tables/options to get that base level of security as mentioned above.

[weeksy]

It's not 'all or nothing' though. You don't have to put the whole pot in an annuity as far as I know, it's just like buying an insurance policy. So a body could buy a longer term, lower monthly income annuity to provide a base level of security and play finance tunes with the rest of it.

Indeedy, you can use 10% of your overall or 100% of it, or anything inbetween.

Until i reach 55 and my job stuff is sorted/decided either way, i'm not making any decisions about what i do with it. Once it all becomes clearer and i have to decide, i'll jump in feet first either way.

I'm not worried about whether i need to work once i get past this next stage, i've got nothing against it as such.

[JackyJoll]

. I told everyone on here at least two years before it happened that interest rates would spike and a cost of living crisis was coming, two years before the phrase was even used in the news, but I got told I was wrong.

Interest rates were bound to go up, because they were low. Not so easy to say when, especially when the decision was (and is) in the hands of some strange people. Two years warning is pretty precise!

Some people would decide you were wrong, because they didn’t like you. No point getting upset about that.

[IccyV2]

. I told everyone on here at least two years before it happened that interest rates would spike and a cost of living crisis was coming, two years before the phrase was even used in the news, but I got told I was wrong.

Interest rates were bound to go up, because they were low. Not so easy to say when, especially when the decision was (and is) in the hands of some strange people. Two years warning is pretty precise!

Some people would decide you were wrong, because they didn’t like you. No point getting upset about that.

This ^ is actually why these threads are valuable.

I called the interest rate rise at the correct time and it went exactly as I said it would, two years before it actually happened. I called the cost of living crisis in the exact month that it's now commonly accepted that it started, two years later the phrase "cost of living crisis" was used and it really started to bite soon afterwards.

I called it right, but I might miss the next one and someone else calls it right, that's why I'm here, to see what people think.

[IccyV2]

It's not 'all or nothing' though. You don't have to put the whole pot in an annuity as far as I know, it's just like buying an insurance policy. So a body could buy a longer term, lower monthly income annuity to provide a base level of security and play finance tunes with the rest of it.

Indeedy, you can use 10% of your overall or 100% of it, or anything inbetween.

Until i reach 55 and my job stuff is sorted/decided either way, i'm not making any decisions about what i do with it. Once it all becomes clearer and i have to decide, i'll jump in feet first either way.

I'm not worried about whether i need to work once i get past this next stage, i've got nothing against it as such.

I still can't get over what your pensions are in the UK though, like I said, for me to get anywhere near to £40k a year I have to deposit a million quid.
How are companies managing this with average earners? How are they getting pension payouts that are that level when there is no way the payee has got anywhere near that figure, if an average employee on £36k a year pays 10% then that's only just over £100k after 30yrs, I know you get compounding interest but up to a million quid?

As for me upsetting these mysterious poor people, I think it's the other way around, I've worked my bollocks off in hell holes, climbed my way up the greasy corporate ladder and had to run companies with tens of thousands of people and I'm struggling to get an annuity that it looks like most of you will get for average jobs, I might as well have stayed in an average UK desk job.

[weeksy]

It's not 'all or nothing' though. You don't have to put the whole pot in an annuity as far as I know, it's just like buying an insurance policy. So a body could buy a longer term, lower monthly income annuity to provide a base level of security and play finance tunes with the rest of it.

Indeedy, you can use 10% of your overall or 100% of it, or anything inbetween.

Until i reach 55 and my job stuff is sorted/decided either way, i'm not making any decisions about what i do with it. Once it all becomes clearer and i have to decide, i'll jump in feet first either way.

I'm not worried about whether i need to work once i get past this next stage, i've got nothing against it as such.

I still can't get over what your pensions are in the UK though, like I said, for me to get anywhere near to £40k a year I have to deposit a million quid.
How are companies managing this with average earners? How are they getting pension payouts that are that level when there is no way the payee has got anywhere near that figure, if an average employee on £36k a year pays 10% then that's only just over £100k after 30yrs, I know you get compounding interest but up to a million quid?

As for me upsetting these mysterious poor people, I think it's the other way around, I've worked my bollocks off in hell holes, climbed my way up the greasy corporate ladder and had to run companies with tens of thousands of people and I'm struggling to get an annuity that it looks like most of you will get for average jobs, I might as well have stayed in an average UK desk job.

I can only answer from my own perspective that my company were VERY good with their contributions, i'm a LOT luckier than most in that context. It's not a million currently, it's closer to £700,000 so maybe my figures were slightly out. However it's mostly been down to the company involvement more than anything else.

FWIW i don't think anyone on here begrudges what you or Yorick has or how you've earned it, but at times both of your superiority about it does grate a little.
I honestly don't care what anyone has or earns, or doesn't have or doesn't earn, i treat them with the respect they deserve based upon their actions. You seem like one of the good guys and nothing you say much changes my opinion on that. It's certainly never going to be the fact you have a Porsche or 3 that would change those thoughts. Your posts of pool pics made me laugh more than the irritated me

[Skub]

Font.

It's a low grade medium for conveying emotion and expression. This allows a lot of room for readers to join the dots in their own way. It also allows readers to gain entirely the wrong impression of someone.

It's what we're seeing here,innit.

[Count Steer]

If an average employee on £36k a year pays 10% then that's only just over £100k after 30yrs, I know you get compounding interest but up to a million quid?

Ah, the joys of compound interest. That £3,600pa magically turns into £0.25M at 5% average over 30 years. Chuck in a few years of high inflation/interest rates during that period and Bob's your mother's brother. Not £1M but better than a poke in the eye.

As the chap with the fine head of hair (may have) said -

Albert Einstein is widely credited with calling compound interest the "eighth wonder of the world" and stating, "He who understands it, earns it; he who doesn't, pays it".

[IccyV2]

FWIW i don't think anyone on here begrudges what you or Yorick has or how you've earned it, but at times both of your superiority about it does grate a little.

Some of it is to make a point because what grated on me was I was giving you advice that was very valuable, I can charge several thousand an hour for consultancy based on my results and you were getting that for free and all I got was ridicule, but more to the point you could have used that and made a shitload of money.
The banks got it wrong, businesses got it wrong, a few of us got it right.

I also don't believe that people who aspire to own nice cars, or make loads of money, look at other people who have been successful and end up feeling bad. It doesn't stack up logically, when I was in care I used to look at media that showed rich people with money and it inspired me, it made me ambitious and I never felt even a pang of resent because I was willing to work for it and I wanted to see/hear everything I could so I could glean any information at all that might help me get there. If anyone is actually sitting there genuinely wanting what Yorick has then ask him how he did it, I would if it's what I wanted.

I believe that the only people who would get resentful from seeing me and Yorick post about achieving our financial dreams are the ones that want it for free and think it's not fair that it wasn't dropped into their lap. Anyone who wants it and is willing to work for it would be inspired and probably interested to hear how we did it. I took every opportunity to learn from people around me, I asked for and got some amazing mentors and they gave me advice that was very helpful, in the same way that a joinery apprentice would get invaluable information from the tradesman he's learning from - think about it, if you want to be a joiner would you follow a time-served joiner around telling him he's talking bollocks or would you shut up and watch and learn?

[weeksy]

FWIW i don't think anyone on here begrudges what you or Yorick has or how you've earned it, but at times both of your superiority about it does grate a little.

Some of it is to make a point because what grated on me was I was giving you advice that was very valuable, I can charge several thousand an hour for consultancy based on my results and you were getting that for free and all I got was ridicule, but more to the point you could have used that and made a shitload of money.

No, see that's where you're wrong... assuming up there the 'you' is me.... Because unlikely some on here i didn't have anything at all to invest.. I still don't.. You can tell me anything you want about where to invest my £500 in my savings account, but it isn't going to make me millions or a shitload of money.
The thing you need for investment is of course capital and i have very very little of that. Could i raise £20,000 or £50,000 getting a loan at 5-6% yeah i guess... but i can't go to some random account in my name and find any more than the £500 stated above.
The only thing that fits that criteria is my pension. Which i can't touch.

We all know where my spare money has gone in the last few years, that's perfectly fine with me

[IccyV2]

No, see that's where you're wrong... assuming up there the 'you' is me.... Because unlikely some on here i didn't have anything at all to invest.. I still don't.. You can tell me anything you want about where to invest my £500 in my savings account, but it isn't going to make me millions or a shitload of money.
The thing you need for investment is of course capital and i have very very little of that. Could i raise £20,000 or £50,000 getting a loan at 5-6% yeah i guess... but i can't go to some random account in my name and find any more than the £500 stated above.
The only thing that fits that criteria is my pension. Which i can't touch.

We all know where my spare money has gone in the last few years, that's perfectly fine with me

This is where you need to ask questions, you assume you know enough to make a decision but you don't, it would be like me choosing which MTB for your lad in his next race, I'd take a look, it seems fairly straightforward, two wheels, probably some suspension, some brakes, how wrong could I get it, so I don't ask any questions, assume I know because my options are limited, so I choose one out of the half dozen in front of me and give him totally the wrong bike for the job.

You need to understand how to play a game that you've never played.
There are risks, but with the right person you can start with £250 and retire with millions by the end of the year.

I don't do this because I don't want the money, I have a set amount of money that I want in my bank account and it's less than you probably think it is. I keep it at that amount and the rest gets given away to family every year. That's why I wasn't happy when I realised I'd need to put £1m into an annuity, because I think it's more money than any individual needs, but it looks like I'll have to stop giving money away and start to put it into a retirement plan.

[weeksy]

I'll send you the £250 over, if you could take that up to £500k thatd be great thanks

As you say, people have different levels of knowledge in certain things. Me making a mistake with a £700k pension could cost me £700k. Making a mistake with a bike choice costs me £500. Learning is the hard bit. But sone things can be expensive to learn.

[Yorick]

Indeedy, you can use 10% of your overall or 100% of it, or anything inbetween.

Until i reach 55 and my job stuff is sorted/decided either way, i'm not making any decisions about what i do with it. Once it all becomes clearer and i have to decide, i'll jump in feet first either way.

I'm not worried about whether i need to work once i get past this next stage, i've got nothing against it as such.

I still can't get over what your pensions are in the UK though, like I said, for me to get anywhere near to £40k a year I have to deposit a million quid.
How are companies managing this with average earners? How are they getting pension payouts that are that level when there is no way the payee has got anywhere near that figure, if an average employee on £36k a year pays 10% then that's only just over £100k after 30yrs, I know you get compounding interest but up to a million quid?

As for me upsetting these mysterious poor people, I think it's the other way around, I've worked my bollocks off in hell holes, climbed my way up the greasy corporate ladder and had to run companies with tens of thousands of people and I'm struggling to get an annuity that it looks like most of you will get for average jobs, I might as well have stayed in an average UK desk job.

I can only answer from my own perspective that my company were VERY good with their contributions, i'm a LOT luckier than most in that context. It's not a million currently, it's closer to £700,000 so maybe my figures were slightly out.

That's a life changing amount of money to lock away
While I was gardening earlier my mind was racing.
You can take 25% tax-free free.

I think you mentioned about £40000 income on full investment so this 25% needs to earn similar.

What i would do ?

Buy a house cash, outright. There's a Rightmove link below showing houses in your area for that money.

Then I'd let my lad rent it and get a pal in to split the rent.
Put the house in your name. Rent would be same as board and lodge etc

Rent would be about £800 a month.
That's just shy of the £10,000 we're aiming for.

In 10 years it'll be worth more hopefully, but you could sell it to the lad for what you paid for it. No CGT
He gets cheap house.

You've had £100k income and get your £175k back to invest again.

There are loads of other ideas, but this may hopefully make you think of your own rather than locking it all away

https://www.rightmove.co.uk/property-fo ... Bedrooms=3

[weeksy]

Well for the £10k that's then taxed although I do t know by how much but seems to be whatever your standard tax bands are, so potentially 40%

Taking it down to £6000. Then adding in upkeep costs its down to £5000 a year..

The problem with that is. The interest on £200000 seems to be about £9000

So arguably apart from the potential capital in the house going up, I'm actually £4000 worse off

If the house goes up by more than the inflation rate, it makes a bit more sense. But less appealing than you first think

But if my calculations are wrong, feel free to correct me

Don't forget, personally we still have a hefty mortgage to consider so that needs factoring in

[Yorick]

Well for the £10k that's then taxed although I do t know by how much but seems to be whatever your standard tax bands are, so potentially 40%

Taking it down to £6000. Then adding in upkeep costs its down to £5000 a year..

The problem with that is. The interest on £200000 seems to be about £9000

So arguably apart from the potential capital in the house going up, I'm actually £4000 worse off

If the house goes up by more than the inflation rate, it makes a bit more sense. But less appealing than you firgst think

If the house is in your name the rent could be board and lodge or whatever. Tax man wouldn't need to know

My upkeep bills averages £500 a year.

There are loads of other ideas.

And don't forget that the forecasted £40k a year is taxable.

[gremlin]

Tax evasion as a prudent retirement plan, eh?

What could possibly go wrong?

[Yorick]

Tax evasion as a prudent retirement plan, eh?

What could possibly go wrong?

There are legal ways for everything. I had a great accountant

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