Scared for retirement after seeing an IFA

[Rainbowgoldover]

Morning

I had a free call with an advisor from St James Place and I'm now more confused and worried than before about my retirement planning.

I am 52, health issues mean probably only another 3 years max in current role which pays quite well.

Single, small mortgage of 40k on a London flat worth between 500 and 600k

Savings of 100k cash ISA fixed, and private pension pot of 300k

Full NI contributions since 18

I have 3 years to plan better for retirement, advisor recommend savings go into pension pot but I worry alot about having no money to fall back on if I get sick, employer offers very limited full pay for illness. 2 weeks a year I think.

I could get a lodger , don't run a car, and currently putting as much of my salary into pension pot that I can afford

However pretty disorganised and don't know what to do for the best, need to plan that at 55 I may not be able to work full time any more

Thanks in advance for any suggestions

Thanks everyone

Seems.there are options, I was panicked after call with SJP

I didn't know PIP would be available when I become incapacitated, and as some.of you say downsizing to a cheaper area when I don't need to be in a London office is a possibility as is a lodger

Speak to someone independent not SJP they are awful

St James Place are for very wealthy people so I would not take too much notice of what they say. Go on to the MSE forum pensions board to take advice or look for another IFA. You have £100k accessible money and a £300k pension pot but obviously are still relatively young. If you are only planning on working for another 3 years presumably that means if you retire at 55 you have to cover 11 or 12 years until your state pension kicks in and tops up your income.

First you need to work out how much income you need to cover outgoings each year and build in inflation proofing. Obviously you need to decide whether you will use part of your savings or 25% TFLS if you take it to pay off your mortgage or whether you will move out and downsize. That is what I would do if you are not wedded to staying in London as that will release some equity to top up your income.

Can you take flexible retirement whereby you go part time? That may delay you having to draw on savings or your pension?

You should be able to access your pension at 55 (due to increase to 57 at some point I think) so I would say it is tax advantageous to maximise putting money from your salary in there from now until retirement.

I don't think you are in as bad a position as your IFA suggests.

Fair enough.

It sounds like you're listening to the warnings about SJP which is good, but in case anyone here is wondering, google these words: st james place scandal. They have a dreadful reputation which is rightly deserved.

Money into a pension will incur charges on 25% out but you get the tax relief on the way in.

St James Palace have an unfortunate reputation and I'd be extremely careful taking advice from one place.

Can you pay off your mortgage out of earnings before you retire? This should be a priority. I would then write yourself a budget - essential costs like council tax, utilities etc. then set aside a monthly food shopping budget and a modest leisure budget - how much do you really need to live on without a mortgage? Getting rid of your car seems an obvious choice, a lodger has more implications but could work for you. We plan to rent out our house and go travelling somewhere where it's cheaper to live for a year or two (or more) we reckon we can live off the proceeds.

Paying off mortgage depends on interest rate and whether OP is getting a higher rate from her savings.

It sounds like you will live comfortably even if you take early retirement. As everyone is saying the issue is SJP (unless you seriously think you are going to struggle with £100k in ISAs etc).

Someone upthread mentioned the HM Gov pensions advice service and I'd recommend that too: https://maps.org.uk/en#

I have also read newspaper articles saying St James Place have been experiencing difficulties.
I read they have charged very high fees and previous clients are claiming back the money they paid to them so presume their financial advice has not been great.

A number of PPs are suggesting you ‘will’ get PIP, but I’m afraid it is not a certainty, the conditions are quite stringent and you need more than just an inability to work to qualify. There are other benefits for people who can’t work…it is quite complicated and it would be worth contacting a CAB for advice about exactly what you’d be entitled to in the event you are no longer able to work.

What was the advisor trying to scare you into buying? Their schemes, perhaps?

Yes exactly this. Hard to get and isn't about people only being able to work part time as quite a few posters have suggested. PIP is awarded based on scoring enough points on certain descriptors to get an award - things like washing and dressing yourself, mobilising, managing medications, being able to cook a simple meal and mange your medications. Lots of people who are still working will be able to do these things. Also there's no guarantees the criteria won't be changed as so many people are trying to claim it and the current situation is unsustainable. It wouldn't surprise me if in the future they change the criteria regarding mobility given that people claiming disability benefits after state pension age cannot get a mobility component and given how many people are currently applying for PIP. I'm just saying op should be wary of depending on this money in retirement, although as others have said it doesn't seem , in any way that she is going to be struggling ! Op if you did have to give up work you could also look at claiming contributions based ESA but if taking private pension s early this could affect ESA.

If someone did that via Facebook, you'd probably assume (correctly) that they were scammers.
The fact they're using LinkedIn doesn't make them trustworthy
I had a connection request from someone from the same place and I rejected it after doing some googling on SJP.....

Thank you, I've had a Google and it seems PIP might be available , I wouldn't be able to work part time in current role I don't think, visual impairment would make it virtually impossible

Retired IFA here. I would not recommend SJP.

Charges can really eat away at fund performance even if they appear small. Also I may be biased but female advisors are more likely to listen to their clients and work with them to come to the best solution for them rather than trying to fit the client into a box

Don't use St James Place, they don't have a very good reputation and their fees are very high.

Does the disease you have have a support group? For instance, MS has the MS Society etc. They will usually have people who can help you sort out your finances and check your benefit entitlement to make sure that you are as secure as possible as your disease progresses. They can also help you plan for the future and make you aware of things you need to consider. There's lots of help available, it's just knowing where to access it.

What about ill health retirement if these are the circumstances? Or reducing hours? Have you looked at benefits? Obviously you'll not get means tested benefits but could you claim PIP? When you finish work it may also be advisable to look at claiming esa for the national insurance years. I'm not an expert but I had to take ill health retirement at 35 and have a lot less than you and managing to currently raise 3 dc on my own. My plan is I will sell up when dc are 18 as I'll loose most benefits and than buy a small flat out right. It's not ideal as it means dc can't come back after university long-term but it has to happen so I'm just accepting of the situation.

It sounds like you're in an excellent position, close on a million pounds in savings,pension and assets. I would sell the flat and buy somewhere for half the price, and live off the proceeds. I wish I was in your position but unlikely to be anywhere near that in another eight years.

In my experience, IFAs will rarely view that you have enough money in pensions.
I take my own view. My danger point is if I lose my Job north of 60. I think it would be hard to find another. So my focus is on saving enough by 60 to bridge the gap between that and state pension age.
I think when you factor in your overall assets you are doing fine. If you want to stay put, I'd focus in paying off the mortgage.

Hi OP…

You seem to be in a good position to start planning your final years of working.

One thing I would do if you haven’t already is to work out your current budget and then work out a realistic retirement budget. Then at this point I’d realistically max out what you can for your pension to realize any tax benefits then start a a non retirement investment account to allow for both investment benefits + flexibility.

I’m not familiar with your laws and rules regarding withdrawals from retirement accounts with no penalty at an early age so make sure that you understand them.

DH has worked as an IFA (not his current role) and he’s always said St James does not have a good reputation. I don’t think your situation sounds awful. I would recommend getting some advice from an IFA personally recommended to you

AVOID SJP. Con artists.

They are trying to scare you on purpose.

What did they say was the problem?

St James Place charges are very high compared to many others! If you need someone to manage your money best to look elsewhere.