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

[quote]

Always worth adding you can check your ni record at :[/quote]

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.

May, Borris, DC etc. did no tory make that?
https://en.wikipedia.org/wiki/United_Kingdom_general_elections_overview#1979.E2.80.932010
http://www.telegraph.co.uk/financial-services/investments/investment-pensions-service/lifetime-allowance/
So increased by labour and cut by the tories?

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

made me smile as an ex-civil servant receiving no such pay rises for as long as I can remember.

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?

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

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

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

http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/work-and-pensions-committee/pension-freedom-and-choice/written/70525.pdf

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).

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.