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Alternatives to pensions?

2 replies

MrsAmaretto · 20/08/2022 11:28

I’ve inherited £60k which I’m going to put into a saving account until I meet a IFA next month. But I’m having a mental / emotional block about pensions which, I accept is to do with grief :(

So from what I’ve read I think it’s best to use some of the inheritance on boosting my pension pot as it’s tiny due to maternity leaves and part time working (have local gov and NHS) I assume this is what an IFA will advise for some/ most of it.

But my mother did that, worked her ass off to pay into her pension for her old age and died 1 year after retiring. As children we received a percentage of her monthly pension for two years. If she’d known she was going to die she’d have taken all the money obviously. She was soo angry when she was actively dying that she’d made the wrong decision and we weren’t going to get the benefit of her money.

So I feel I can’t risk loosing the remaining inheritance from her by paying it into a pension that I may never reap the reward of. My father died aged 30 and my mother at 61, so I’m not convinced I’ll live long into old age. My genetic tests have come back clear but I’ve seen enough death that providing for my family incase I die is my priority, I’m not like other people who assume they’ll make it to 80+. But nor do I want to end up penniless and in a workhouse (cause Victorian misery seems to be the way the UK is going!) if I do make it to old age!

Other than seeing a grief counsellor as well as a financial advisor. Is there anything else that I can do to build up on this money rather than let inflation ruin it? I own two house sites I could build housing upon for either sale, holiday homes or normal letting (though material costs are rising) I have everyday savings, no debts, I have 30k left on my mortgage.

Any ideas for someone who is clearly fucked up emotionally with money?!

OP posts:
nannynick · 20/08/2022 14:56

If under age 40 you can use a Lifetime ISA for £4k of it each year until you are age 50. Like a pension it is age restricted access, age 60, and like a pension it gets tax relief on what you pay in, meaning £4k becomes £5k. Unlike a pension, 100% of it is tax free on withdrawal past age 60 and it is part of your estate for inheritance tax purposes.

ISA - this does not get tax relief on contributions but you can put up to £40k in each year and can take money out whenever you like, tax free. It is part of your estate for inheritance tax purposes.

SIPP - Self Invested Personal Pension
This gets tax relief on what you pay in, what you can pay in each year varies depending on your salary and other pension contributions. 25% tax free on taking out after you reach the age to take it out (age 55 before 2028 or age 57 if you are not 55 before 6th April 2028, plus this may change in future). 75% taxable at your rate at the time. This can pass to descendants outside of your estate, so no inheritance tax, but it may be taxable to the recipient when they withdraw it depending on how old you are when you die.

nannynick · 20/08/2022 14:58

Consider paying off your mortgage. There is financial peace that comes from having no debt.

m.youtube.com/watch?v=dzDxHdtUAcE

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