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I'd best keep saving... 😐
And all I have learned from this thread is that I am properly clueless when it comes to pensions and retirement plans.
I really think I need some professional advice. You lot are all talking in a foreign language.
Trying to transfer UK state pension to France. Not easy.
Why do you need to? Currently you get it paid to you and index linked with the triple lock.
Although, post Brexit, no one has a clue or has even thought about what will happen. Although another 20% devaluation in the £ is pretty much a certainty if Brexit goes ahead...
I will be 55 in February and am actively looking at this option playing off tax paid versus flexibility in how I reinvest and most important not having to buy an annuity at today's (and IMO the future's) appalling rates.
You don't have to buy an annuity at the moment anyway, and if its a significant amount that will be one hell of a tax bill you will be paying, especially if you plan on earning any other income in the year in which you do it.
A bit off topic....but perhaps a heads-up for some people...
A couple of pages back there was a link to the government gateway page to check NI contributions.
Well out of curiosity, I had a look.
It looks like while at uni I am down about £75 over 3 years but have enough years to make that up. I can't pay it now for those years as it was too long ago.
BUT, I also looked at my income tax & for some reason my company has told the tax man that this July my taxable income was £10,300!!
I have asked the payroll dept to check into this, but it was a bit of a heads-up that you shouldn't always assume that the correct numbers have been given to HMRC. I don't remember having a massive tax payment that month though, so I wonder if it's a clerical error....
Worth checking though...
A bit off topic....but perhaps a heads-up for some people...A couple of pages back there was a link to the government gateway page to check NI contributions.
Well out of curiosity, I had a look.
It looks like while at uni I am down about £75 over 3 years but have enough years to make that up. I can't pay it now for those years as it was too long ago.BUT, I also looked at my income tax & for some reason my company has told the tax man that this July my taxable income was £10,300!!
I have asked the payroll dept to check into this, but it was a bit of a heads-up that you shouldn't always assume that the correct numbers have been given to HMRC. I don't remember having a massive tax payment that month though, so I wonder if it's a clerical error....
Worth checking though...
Thanks for the PSA.
My income seems about £5k shy of what I actually get paid, which is odd - we get childcare vouchers, so maybe that's it.
Oddly though, It says I made zero contributions in 2013/14 - I started a new job that year and it says they still haven't reported any income.
How many years do you need? I've got 23 years so far.
My income seems about £5k shy of what I actually get paid, which is odd - we get childcare vouchers, so maybe that's it.
Salary sacrifice pension?
That comes off before the HMRC see anything.
Salary sacrifice pension?That comes off before the HMRC see anything.
Only for the last month, Childcare Vouchers are Salary Sacrifice.
Childcare Vouchers are Salary Sacrifice.
Don't know anything about them, as we have Cats instead of children.
Have you tried Catcare Vouchers? Tax free, very handy.
Have you tried Catcare Vouchers? Tax free, very handy.
Would have been handy with the last two, we self insured not knowing we had got two very illness prone rescue kittens. We bumped into our Vet's receptionist in M&S the other day, she knows us by name and all our cats details as do all the staff at the vets. Cost us £1000s to get to know them all that well! We've even met our Vet's children and their pets....
P-Jay - Member
My income seems about £5k shy of what I actually get paid, which is odd - we get childcare vouchers, so maybe that's it.
I think that's how salary sacrifice shows up. They introduced it a while back at my workplace & now my 'official salary' is less than my actual. I don't fully understand why, but it is all above board.
I suspect if your childcare vouchers are coming out as well under salary sacrifice, your salary will look less than it is.
Perhaps worth checking though?
I think that's how salary sacrifice shows up. They introduced it a while back at my workplace & now my 'official salary' is less than my actual. I don't fully understand why, but it is all above board.
Yep.
The deduction is made from your gross salary and put into your pension / buys cat care vouchers. As it is from your gross salary, it comes before any tax has been deducted.
They then declare what is left to HMRC as your 'salary' and you get taxed on that.
All legal, just one of many 100s of tax breaks our system has.
So, what sort of income is everyone on-target / hoping / aiming / playing-the-lottery for when they retire?
Must admit I'd love to get £20k "in todays money." (so probably 30k or so of actual money)
we self insured not knowing we had got two very illness prone rescue kittens
A life lesson, I feel 🙁
Between two of us £3k a month, that's £1k from my wifes pension, same from mine and drawing £1k from investments. Then when we both reach state pension age we'll get about another £1200.
mrmonkfinger - Member
So, what sort of income is everyone on-target / hoping / aiming / playing-the-lottery for when they retire?Must admit I'd love to get £20k "in todays money." (so probably 30k or so of actual money)
About the same I'd guess, I don't think that's going to be a problem (although admittedly before I checked I assumed it would be), this is of course assuming:
1) state pension still exists, that's 50/50 at best
2) The UK isn't in the developing world by then.
3) inflation doesn't 'kill' me.
I'm already at £18k, but I guess I've got to beat inflation.
Of course that's based on being Mortgage free by then - and my all too rosy interpretation of what I've learned today - but if I had £1500 a month (in today's money), with no mortgage/rent, no debt and the kids long left the nest (youngest would be 30) and a bus pass, the world would be my lobster.
I'm still waiting for the rug to be pulled.
One thing we might have not considered, we estimate £20k in 'todays' money being £30k then...
I retire in 27 years, if I look back 27 years to 1990 - £20k in todays money was £9600 in 1990 - for me, £40k is nearer the mark.
One thing we might have not considered, we estimate £20k in 'todays' money being £30k then...
I don't, I retire in less than 5 years 🙂
I don't, I retire in less than 5 years
Ah, £20k = £30k in 56 years, is probably a safer bet ha ha. Let's hope not though eh?
That is the $64,000,000 question.
I think 2/3 of current income is very achievable, without eroding the capital too much from a mix of ISAs, pensions and other investments.
I’ve done and re-done the calculations over and over, but the important variables are, well, variable. Future interest rates, returns and govt policy can’t be predicted.
We have been lucky, and can probably look forward to a more comfortable retirement than most, but just how comfortable and exactly when we are willing to take the plunge is a bit up on the air.
I’d certainly hope it to be in the next 5 years, but the next 5 years have the potential to be one almighty poo storm politically and financially so who knows.
So, what sort of income is everyone on-target / hoping / aiming / playing-the-lottery for when they retire?
Personally, its far enough off that predictions are pointless (I'm 46 IIRC). We could have none / one / two big recessions in the next 20 years. Brexit could affect the economy anywhere between -5% and -25%. I could lose my job and start burning up my savings rather than increasing them, etc, etc...
So, I just save as much as I can whilst I can....
Appreciate, variables gonna vary.
Must admit I'm not banking on the state pension bailing us out and my calculations only feature it as the Brucey Bonus.
Although I assume the government will reduce rather than remove, in similar style to what it has already performed e.g. work more until senility sets in, lower cap to pension for newer entries to workforce... rather than knobbling folk who've already got their max allowance built up.
About £25k pa plus State Pension when it arrives for me.
Plus a tiny wee bit I'm building up in a workplace pension at the moment.
I don’t have a pension, aparrently 1in 3 people don’t according to the radio the other day.
Sure I will be fine.
I pointed that out in previous pages and I suspect many posting in here are the well provisioned exceptions.
I am working towards a £350k pot that'll see me retire on my 50th birthday maybe before. I am hoping, somewhat optimistically, that this will provide me with £12k a year. If some form of state pension still exists come state pension age then this should see me through to the end, if not then I'll top myself when it runs out.
Edit: That doesnt include whatever I will have in my works pension pot which will have 25 years of contributions in it but I can't get to that until 55, so maybe another £150-£200k.
I'll top myself when it runs out.
And there was me thinking a thread about the last quarter of our lives would be depressing.
If you can’t live with the idea of living without money, you should reconsider your priorities.
Tell me how to live without money then, I'll be happy to.
At the moment it looks like including state pension I'll be on about £22k PA after taking 25% as lump sum, that's half of my current income. That's with 28 years to go until retiring at 69. Id like to cut back on work once 60ish when the kids will be over 18.
Since being made redundant 4 years ago and starting my own micro company I've struggled to commit to any payments just in case the work drys up, having a 2 year old and another on the way isn't helping either.
I do think that in the future the lack of provisions that some people have made (through ignorance on necessity) will cause some major issues in society. More than the ones that the tories have crated in the past 8 years.
Footflaps , I am only 43 . I now work and live in france and to qualify for a french state pension you need to have worked an x number of trimester .
having spent 20 years in the uk , i will never get enough trimester .
but i will if i transfer my uk state pension .
and with brexit , i want to sort it out .
Sure I will be fine.
😯
I do think that in the future the lack of provisions that some people have made (through ignorance on necessity) will cause some major issues in society.
this
I do think that in the future the lack of provisions that some people have made (through ignorance on necessity) will cause some major issues in society.
It's a nihilistic thing I think. Many people probably have the view that they'd rather spend their money when young than be rich and stuck in a care home. Personally if fate decides that I live out my final years either physically or mentally inhibited, then I won't really care how rich I am. Plus there's the kids to look after me 😉
I'll top myself when it runs out.
This sounds macabre but it really is the only sensible and logical solution. The fact that people are forced to live out their lives no matter how miserable their existence may be is a bit daft.
Many people probably have the view that they'd rather spend their money when young than be rich and stuck in a care home
As far as I know:
About 5% of retirees are in care homes.
State pension will barely provide subsistence living.
That's a 95% chance that taking the "spend it young" view is [s]a d*ck move[/s] a bad idea.
Yeah, the problem with not saving is that for every one person who plays hard and conveniently drops dead just as soon as the money runs out, there are probably 10 who lose their job in their 50s and have decades of grinding poverty to look forward to. The supermarket checkouts will be automatic, no respite there.
Mid 30's, no pension, self-employed, 29 years years left on an eye-watering (for me) mortgage and a house in need of extensive renovation. Job that takes me all over, never at home. Something has to give!
57 and a half here, not that I'm counting down! Looking at 60, but alarmed at the number of former colleagues who seem to check out within a year or two of retiring.
DB, but currently giving a bit of thought re taking the pot (around £800k) out & putting it into some sort of investment/draw down vehicle. Others with experience of similar?
Putting together thoughts of what I'll be doing post 60 to keep me active and interested. Here's the current list:
New house: searching, moving, associated redecoration etc.
Learn a musical instrument. Probably keyboard/piano?
Bee keeping.
Running/cycling as long as I can.
Listening to all the music I've bought over recent years but not got round to actually listening. Discovering new music via streaming.
Have an urge to return to a bit of aero modelling. (Thanks Harry the Spider!) 1st on list: 1:48 Fw190A!
Couple of mornings a week volunteering.
More time in the kitchen.
Friends taken up an allotment, so I'm watching that with interest.
Dunno how I'd fit in even half that......
there are probably 10 who lose their job in their 50s and have decades of grinding poverty to look forward to.
And how many are there who save their whole life and work hard only to drop down dead when they retire? I'd say the fear of this is what drives a lack of saving.
With a life expectancy hovering around 80 (but very few making it much past 90), clearly it's not really very many people.
Edit: ok I just looked it up, just a touch over 1% mortality per year in the 65-70 age group. So roughly 6% of people die within 5y of retirement. 94% don't.
As I work in finance I had always assumed I’d be out of that work by 50 as its terribly age-ist.
Other factor not to forget is tax - getting a pension income is taxable so if it comes that way then you need to factor is HMRC’s cut. As above drawing from investments can be capital gains so thats another £10pa each tax free. All this is quite a mind bending excersize working out the options.
@onlysteel I am 54 and look hard at my one amd only DB pension to transfer it out to DC and then look at draw down using Osbourne’s “cash out” option at 55. Even by paying full tax (25% tax free rest at normal income tax rates) its looking worhwhile as I think I can do better with BTL or other investments (eg global equities / bonds and drawing 5% pa). Also have total flex to move it around / out of country and unlike an annuity I have something to leave to kids. Also worth looking at places like Portugal, no tax on pensions no inheritence tax (buy a small place there and declare as main residence - still free to travel around and nice place to live, very cheap too - have friends who have done that in Lisbon. IMHO Brexit will make no difference as Portuguese govt keen to attract people/money as its a poor country)
The whole pensions thing is fubar 🙁
My mother's pension (retired teacher) is probably double what a new graduate could expect to start on, and she's been collecting that for 20 years...!
In fairness, she has started to concede that I might have had a point when banging on about inter-generational wealth gaps for the past 5-10 years.
As for me - gradually tried to increase my contribs through my 40s, but combination of a few gaps, low affordability and fragmented pots is not encouraging 🙁
IMHO Brexit will make no difference as Portuguese govt keen to attract people/money as its a poor country)
I'm sorry?
I thought you told us Brexit would make us all richer and be a wonderful thing?
@footflaps. No difference to my (or the other posters) ability as a UK citizen to retire there and take advantage of their tax freedoms ... having enjoyed all the benefits Brexit will bring to the UK. That was my point.
@onlysteel. Anyway this submission from the TUC regarding pension freedoms is interesting. Not what it says about fees and drawdown products, IMO there is no reason to get a "drawdown product" if you are organised, you can just cash in the pension and/or place it in a (very cheap) holding pension structure and invest it yourself via for example ETFs and then sell those as you wish to take income.
@rkk you can look at consolidating your pots, see if its worthwhile. If they are DC and the pension freedoms still exist when you are 55 you can cash them in individually (e.g. one a year ?) and invest in things outside the pension framework
FWIW I am a fund manager and at the moment it's just not possible to generate the returns most savers are going to need to hit their expectations / "projections". Namely investment growth is not going to give people the pensions they want
Jamba', thanks for your comments & link. Will have a proper read later. Had to google etf, which I guess is part of the problem; the man in the streets lack of understanding of the options available, and how to source good financial advice to overcome this.
It's not just Portugese tax freedoms that will be of interest to post Brexit UK citizens when considering whether or not to retire there (or elsewhere within the EU) - it's how you will fund health care and other social needs when the UK is outside the EU/EEA that should be considered. Being old can be very expensive.
Interesting to see how many people are relying on being mortgage free or downsizing to free up cash, while many have still been enrolled for at least parts of their career on the more generous pension schemes of the past.
It's pretty clear that the next few generations are likely to be totally screwed as home ownership plummets. Having to pay rent throughout retirement is going to make a massive difference to people who are likely to be on much lower pensions than today's retirees, however much they contribute throughout their lives.