Basic benefit of a pension is that you get tax relief on contributions, that is especially beneficial if you are a higher-rate taxpayer now but not expecting to be one in retirement. Another huge benefit can be if your employer makes some sort of contribution too and even though that doesn't really apply in your case there may also be a tax saving if the company pays (a bit) into the scheme rather than giving you more dividends?
Also depends on your mortgage rate of course.
Is there a quick way to work out if it's better me starting a pension now
As a general rule, the sooner the better as you need all the compound interest you can get to get a decent pot built up....
*cough* not sure if you experts had seen id posted a question before the rude man hijacked my thread 😉 *cough*
*cough* not sure if you experts had seen id posted a question before the rude man hijacked my thread *cough*
HL don't charge for buying or selling funds, so take your time deciding which ones you want. This will help you decide:
Add Japan to the list, so 16-18% in each sector, split between 2 or 3 funds. (I love Baillie Gifford funds personally, though other inferior products are available :wink:)
Open a new SIPP for your missus. She can add to it as and when.
HL don't charge for buying or selling funds, so take your time deciding which ones you want. This will help you decide:
so is that what im doing, 'buying some funds'? not investing in stocks or shares or somethings? i rang them a short while ago and they mentioned its cheaper to do it online rather than over the phone which implied there would be a charge.
do you think the best option is to tell them i want to use my money to 'buy funds' and then tell them the above spread?
and that spread...... do i need to break it down further then or do i just give them that info and thats all they need?
thanks
I need an IFA to look at my pensions (pension rules) can anyone recommend an IFA in Manchester city centre? recommendation would be better than google alone, thanks
[quote=thecaptain said] Another huge benefit can be if your employer makes some sort of contribution too and even though that doesn't really apply in your case there may also be a tax saving if the company pays (a bit) into the scheme rather than giving you more dividends?
Also depends on your mortgage rate of course.
It very much applies to alexxx as he mentions he has a limited company. As such the limited company can make pension contributions to alexxx's pension fund (a SIPP for example) tax free.
That's what I do, make company contributions from my limited company into my personal SIPP.
Thanks for the advice guys, I'll go find a FA to help me setup a personal SIPP and get the company starting to pay something into it even if it's a menial amount for now.
I just figured it may make sense to stretch myself for 10 years and pay off the mortgage in that time saving me around 120k than it would be beneficial paying into a SIPP
Sadexp- the sooner you get the money into funds the better. Make sure you look at the management charge on each fund - comparable funds don’t always have comparable charges!
Have HL sent you a welcome back with details on admin charges etc?
I would expect any charges to be a % of invested capital, so no need to wait for all the funds to arrive.
Sadexpunk. If you are going through H&L you will need to be a bit more specific about the funds. For self invest you will have to pick the fund managers/investment companies that best suit your chosen spread of investments.H&L do have their own ready made funds but I think the commission rate is quite high.
Its not difficult with H&L as there is loads of info available and can be broken down into the sectors you are looking at.
Keep an eye on the yearly charges for each fund and remember that H&L add,i think 0.45%,onto each funds charge.
Fundsmith have ,so far,done well for me,so might be worth looking at.Less commission direct than through H&L.
I've been slowly transferring pensions and isas away from the large providers/banks as I feel I have more control.
Yeah atp as I indicated there can be a tax saving from that but it’s not quite the same benefit as when the company just bungs in extra money that you wouldn’t have otherwise got.
I love Baillie Gifford funds personally, though other inferior products are available 😉
Sadexpunk. If you are going through H&L you will need to be a bit more specific about the funds. For self invest you will have to pick the fund managers/investment companies that best suit your chosen spread of investments.H&L do have their own ready made funds but I think the commission rate is quite high.
Its not difficult with H&L as there is loads of info available and can be broken down into the sectors you are looking at.
Keep an eye on the yearly charges for each fund and remember that H&L add,i think 0.45%,onto each funds charge.
Fundsmith have ,so far,done well for me,so might be worth looking at.Less commission direct than through H&L.
I've been slowly transferring pensions and isas away from the large providers/banks as I feel I have more control.
hmmmm more complicated than i thought but ive come this far so will continue muddling through 🙂
so..... HL manage the SIPP, and within that SIPP are different fund managers that you chuck your money into? is that about right?
i was thinking that HL just took the money you invest and manage it themselves according to your wishes.
Have HL sent you a welcome back with details on admin charges etc?
just had a look through my bumph and there doesnt seem to be any welcome pack, itll all be online i spose. [url= http://www.hl.co.uk/pensions/sipp/charges-and-interest-rates ]this is their charges page[/url] but i still dont really understand what my investment is classed as.
thanks
[quote=thecaptain said]Yeah atp as I indicated there can be a tax saving from that but it’s not quite the same benefit as when the company just bungs in extra money that you wouldn’t have otherwise got.
Gotcha.
Your investment will be classed as a Self invested Personal Pension.
It is up to you to decide which funds you spread your money through so you need to spend a bit of time looking at the details of some funds.
Past performance,commission charges and details of the fund manager together with the funds aims will all be shown.
H&L charge a commission basically to provide you with information and research and to be able to easily manage your investments on line.
If you feel one of your chosen funds is underperforming but another is doing well its usually very easy to transfer using the H&L platform.
H&L do a wealth 150 list that is split into different fund categories. It may be worth you having a look through this first and seeing if any funds fit your criteria.Its not complicated,just needs a bit of time spending on it.There will be funds available that you would never be offered by a financial adviser.
I told my adviser at the bank the 3 funds i'd self invested in and he said he'd never heard of them !
still slowly trying to get my head round the HL investment options.....
i was (still am) a bit overwhelmed by the choices in the dropdown menus but im narrowing them down slightly now. i assume im not dealing in stocks and shares, bonds et al and have done the right thing by unticking everything available apart from 'funds' yes?
i then seem to have a choice between 'unbundled' and 'inclusive' funds in some of them. any idea?
am i best to choose by 'manager' or 'sector'?
bluddy minefield this.......
Sadx in saturday telegraph theres a fund of the week, last week it was the f&c investment trust, if you look on the f and c website you can see what it invests in, pretty tech heavy but has bp shell etc.
I like funds like the above, you just buy them and forget about them, scottish mortgage from baillie gifford is another.
The historic performance on the above is good but its your hard earned cash so only you can decide.
I dont use hl so cant answer your question on that though
I really worrry that you’ve waved goodbye to a decent pension and have no idea what you’re doing. Not saying that to be rude just worried about you and how you’ll be when you draw benefits.
There will be funds available that you would never be offered by a financial adviser.
Hargreaves have a retail platform and don’t offer access to as many funds as a decent IFA could secure on an alternative platform. More than enough mind you, so you can create something different, but this statement isn’t correct.
H&L do a wealth 150 list that is split into different fund categories
Not sure I’d rush out and look at that list.
https://www.ftadviser.com/platforms/2017/10/11/hargreaves-lansdown-s-buy-list-under-fire/
As I say I am not sure I’d be looking at that list of funds to use as a basis of my retirement but other opinions are available.
I've seen quite a few IFA's over the years and have never been offered funds from smaller providers. It has always been mainstream large investment/insurance companies.I doubt very much an IFA would spend the time to research 100/200/300 funds or more for a client.
I really worry that you’ve waved goodbye to a decent pension and have no idea what you’re doing.
i think youre 50% correct stu 🙂 im not sure it was a decent pension in the first place, the facts and figures i stated in the early days of this thread seemed to suggest it was just doing the bare minimum. youre absolutely right about the 'no idea what you're doing' tho. thats why i started the thread, to see if it was worth me changing it, and common concensus was that yes, it is. for that, im grateful for all the help and advice ive had so far, i just seem to need that extra push across the finishing line, get my money invested in 'something' and let it stay there til i retire. i do still have my other pots that i havent touched, these are just the ones deemed to be underperforming.
im guessing that i could pick any one of you on this thread to give me advice that would outperform these pots, so im not too worried in that respect. its pointless me spending hours and hours poring over different plans and how theyve performed over the years as i just dont understand it. im totally satisfied that the advice to spread my new pot over the above markets is good advice, i just need that bit of help now in how to read the HL site and actually get the investment started.
poolman, thanks for the heads up on that but again, i just wouldnt understand what it was i was reading. i dont even understand the difference between funds and stocks & shares.
thanks
Open a new SIPP for your missus. She can add to it as and when.
Re yr wife make sure shes maxed out her state entitlement and bought back her gap years. Its far better value than any private non employer subsidised pension.
thats done now, her HL SIPP has got her couple of grand in for what its worth. as shes self employed now i just did thst gateway thing to look at her state pension projection. it states much the same as mine that the forecast is the most that she can ever get, so no opportunity for buy-back. its £164 p/w, so £8,500 pa. there were a couple of gap years in 94 and 96 i think but it states that all she has to do is pay NI contributions for another 8 years before 2041 and she'll get that max.
silly question but does that really mean that in 8 years time at age 51 she can stop paying NI altogether and would still get the max possible for her?
thanks
silly question but does that really mean that in 8 years time at age 51 she can stop paying NI altogether and would still get the max possible for her?
only by not working!
We all pay NI until our official retirement date after which they don't currently levy NI, although they are talking about bringing it in to cover social care costs...
Once she's hit the 35 years, there's no state pension benefit to working any more, but obviously if you don't work, you don't get paid either....
so if you work you have to pay it? i thought it was 'a good idea' to pay it if you were self employed, your choice rather than obligatory and if you didnt you wouldnt get full pension. shows what i know eh? 🙂
Not sure about self employed, but if you're PAYE, you have no choice until you hit retirement date.
Once she’s hit the 35 years, there’s no state pension benefit to working any more, but obviously if you don’t work, you don’t get paid either….
The 35 qualifying years thing is too risky to bet on if you are still someway from retirement age. I can see it getting bumped up to 40 just in time to catch a few people out.
Yes i have 2 qualifying years to go till maxed out but am holding back as if I work again i have to pay anyway, for no extra benefit On the flip side, the price is always going up. I think the price of a qualifying year has doubled over the last 10 years.
To be brutally honest the state pension has all the characteristics of a ponzi scheme, but you would be a fool to not contribute.
My latest dc review quoted a price of 50k for 1k of indexed pension, certainly makes the state pension look good value.
To be brutally honest the state pension has all the characteristics of a ponzi scheme, but you would be a fool to not contribute.
Not really, it will cost more in future, due to ageing population, but not massively more based on current forecasts. The bigger issue is probably long term care costs, which are going to rise and no one is talking about funding for it....
[url= https://farm2.staticflickr.com/1796/41213175020_63ae6ccfcb.jp g" target="_blank">https://farm2.staticflickr.com/1796/41213175020_63ae6ccfcb.jp g"/> [/img][/url][url= https://flic.kr/p/25MSi67 ]Pension affordability[/url] by [url= https://www.flickr.com/photos/brf/ ]Ben Freeman[/url], on Flickr
Hey SadexP - hows your HL SIPP doing? My fund has ridden the stock market plunges of early this year to still be up yr on yr so hopefully you are ok.
Hey SadexP – hows your HL SIPP doing? My fund has ridden the stock market plunges of early this year to still be up yr on yr so hopefully you are ok.
well i wont profess to understand the figures at all, but i logged in to see if i could twig anything that may make sense to you 🙂
is it cost vs value reading? it seems to imply that across the 5 things ive invested in, its total cost £82,795 and value now is £87,220. i think it also says that its a £4,425 gain which is 5.34%. that sound about right?
thanks
well this seems to be dragging on, not sure whether its HL or a company called JLT who keep messing up, but ive been trying to get my small DC pension (no4) transferred over and its still not happening.....
3. a DB pension from engineering job no 2, 10 years worth of payments doing nowt special.<em class="bbcode-em">unknown value, says it should pay £5,400 per annum
4. a small friends life/provident pot from some AVCs at the time of pension 3. <em class="bbcode-em">current value £2000
the problem is, JLT seem to manage both of these pots, and they keep sending transfer paperwork over for me to sign for no3 instead of no4. i ring em, they say its HL fault, HL say JLT arent getting back to them when they request the right policy, its annoying not being able to close this all off.
ive just had more paperwork through for the wrong policy today. but...... whilst just checking it is in fact wrong, its got me questioning it again, so id like to ask your thoughts.
i believe no3 is a DB pension, the bumph says itll pay me £5,800 per year now at age 65 (originally said £5400). yet the transfer value is £136,000.
lets round everything up, and call it £6000, at age 65. 20 years worth of that takes me to age 85 and be £120,000.
if i took the (rounded up figure of) £140,000 and invested it (yes investments can go up or down) but is it not a decent shout to invest this also with HL instead? if i took the same £6000 pa thatd take me to age 88 assuming no growth.
have i got my sums right? do you think its worth transferring or would you still say stick with the DB as its a known quantity for life?
thanks
EDIT: also i think im right in saying if i keep the DB annual payment, if i die my wife would just get half annually yep? yet chuck it into the SIPP and its all hers still?
i believe no3 is a DB pension, the bumph says itll pay me £5,800 per year now at age 65 (originally said £5400). yet the transfer value is £136,000.
If it's DB then leave it well alone, you'll struggle to better the guaranteed figure.
Sadx - yes dont sell your db for that its only c 25 x the benefit. I have some db which apparently is offering 40x and I still wouldn't sell. I may have done if I was in poor health but that's the only reason. Keep it and enjoy a stress free retirement.
advice noted and taken. thank you very much.