Pensions

[Hoolahoophop]

Has anyone any suggestions where to get pension advice for free preferably online.

I just looked at my pension statement. I am only 12 years from my ideal retirement age. Will be entitled to state pension, and have a work pension worth £70k. This will not give me anything like the pension I would like. DH has some investments and his own work pension so between us we could have a nice retirement. But if something happened and we split I would very much have a downgrade in income and lifestyle.

Thanks.

Your pension company should be able to give advice and may give you a guide as to what the pension will be worth in say 10 years. Basically though the recommendation will be if you can contribute a lot more in the coming years.

Look at rebel finance school.

As pp said, the most likely advice is “save more”. What sort of advice are you looking for?

If you are 50+ you can book a free session with https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise

Are you in a position to increase your payments?

Remember that his pension and investments would be a marital asset if you split.

Just going to check here that you do mean "I have £70k in my pension pot" and not "I'm expecting to get £70k a year from my pension pot"? Neither is unheard of on this board.

There is currently £70k in my pension - so will return not very much. But am still paying in £400 a month.

DHs investments come in the form of a trust fund that he has had since before our marriage so I think it would not be considered marital assets.

I would like to figure out how much I should be adding to my savings to maintain the lifestyle I have. Where I should be saving it, S&S ISA, Cash ISA (already have savings in a cash isa but have not considered them as a retirement fund but more general everyday savings, I have nothing in s&s) or put more/all into my pension pot.

We jointly own two properties, one mortgaged one outright. If we sold one we would clear the mortgage on the other. (trying to sell by the market is stagnant). Could give up selling and rent but that would be a hassle and would not cover the mortgage.

I am under 50 and am in a position to save more. But also want to live now so would like to put some calculations around what I am saving to ensure that I don't over save and reduce my spending now.

Very much not on the breadline - but have been very relaxed about pension saving as own a business which I hoped/assumed would pay my pension, the economy and world politics are now making that feel high risk though the business is doing well.

Second rebel finance course

Check out the links from PPs above.

Does your workplace pension have a 'salary sacrifice' option? If so, join it (if you haven't already). Work out how much more you could be putting into your WP pension - ideally this is before tax so it's saving you money two ways.

If you have a cash ISA, check the interest rate, usually the best rate is for the first 12mos and then it's not so good so you might need to open a new ISA and move/roll the current ISA money; you'll need to do that every 12mos from now on to get the best of it. And be quick b/c the cash ISA maximum is decreasing from £20k to £12k p.a.

Stocks & Shares ISAs give better returns long term but you need to study those first. The max for those will stay at £20k but since they are stocks/shares, their value is tied to the financial markets so rises and falls.

Only practical advice will really be to save more into your own pension (and maybe reduce the price on the property you’re trying to sell)

Look in www.gov.uk Pension wise, there's advice about this and the newest legislation

What do you want your income to be in retirement? And what age do you plan to retire? You need to work backwards from there to work out what you want your pot to be.

Then you'll need to plough more into your pension and adjust how it's invested to get close to meeting your goals.
Have you chosen the funds your pension is invested in? Do you review them? How much did it grow last year? You should expect an average of 8% growth annually. Last year the markets were insane and you could have achieved growth in the high teens up to 20%. If you didn't, have a very good think about your attitude to risk/volatility/and your timeframe for retirement.

If you're not trying to bridge a gap between early retirement and the time you're able to access your private pension, favour pension contributions above S+S ISAs. If you are, then S+S ISAs will be necessary.

Don't keep more than a very basic emergency fund in cash savings or cash ISAs. If you have significant amounts in cash, think about putting it your pension upto your 60k limit.

@Hoolahoophop I’d highly recommend reading the book How to Fund the Life you want. I’ve just finished the audiobook, I listened to it on my commute to work. Lots of practical advice and they recommended some options for pension advice, including some free options. I can’t remember the exact details but it’s all in the book. I found the whole book very informative and it’s certainly made me look more closely at exactly what I can expect to get in retirement and how to boost that.

Yes second the working out what you will need in today’s terms and then working backwards to see what you need to be saving now to reach that, taking into account inflation.

I think the advice she is looking for, is how to get more of her husbands pension.

To have any hope of growing a decent pot, you will need to invest. This means a S&S ISA and/or SIPP (you say you have work pension so may not need SIPP). Ideally, invest into a fund with good growth and low fees (this in a nutshell is what Rebel Finance School will tell you). They recommend a global index tracker like the FTSE Global All Cap. It returns 10% average p.a. but you need to be able to leave it in for the long term and ride out the ups and downs. It is a passive fund which means you invest and leave it be. No expensive management fees which can erode your growth.

They would also advise you check what your work pension is invested in (which fund) and change this if possible to something like the one above.

Before any of that, you need to have cleared all unsecured debt (not including mortgage) and have an emergency fund of six months salary should the shit hit the fan and you lose your job.

Use a pension calculator - the pensionbee one is pretty clear and easy to use.
If you out contributions in as employee it will add 20% tax to them. If you put as employer it won’t. So eg if your £400 is gross via salary sacrifice put in as employer.

I would do it without state pension or tax free lump sum to start with as it’s a cleaner view of what you have. You can adjust how much you put in, how much income you want etc and it will project how long your money will last

As above if you are under 50, want to retire in 12 years time and have £70k in your pot, you need to invest a lot more into your pension. The pensionbee one is particularly quick and easy to use to figure out what you might be looking at.

Start by working out what income you need in retirement in today's money. There are tables that suggest what you need for a frugal life style, a comfortable lifestyle and well off lifestyle.

Let's say you want £35k a year (hopefully any kids will have left home, you'll be mortgage free, no commuting costs etc)

Subtract the state pension amt of £12500 which you'll get at 67.
That means you need £22500 from a private pension.

A pension pot invested on the stock market will give you around 4.7% return annually.
£22500÷0.047 = £478,723

So you need to have £479k in a pension to give you an income of £22500 pa.

If you have equity in a property and you can downsize when you retire, you should include the equity left after buying a smaller house in your pension pot (you would put it in an ISA then any growth and interest and dividends are tax free)

You really need to be saving hard to invest the amount of money you need to deliver this.
Make sure you are getting full tax benefits from your pension contributions. If you run your own ltd company then the company should contribute before corporation tax is paid and there's no limit to how much can be put in by your company.

Then check what your pension is invested on. You need low cost funds with a good geographic and market spread. With a minimum of 12 years to grow you should be looking at high risk investment. For example a ftse100 or ftse250 index tracker, a European market tracker, a US index tracker, and a rest of world tracker. Reinveat all dividends (called accumulation funds, not income funds). With growth and dividend payouts with a lot of saving you could do it

Jopo12

Pension calculator:

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/use-our-pension-calculator

Thank you, lots of links and lots to digest here. Sad truth is that putting a % of dividend into a pension for the last 15 years would have been an easier pill to swallow that putting all the dividend in a lump sum in now for a few years to catch up.

Guiide.co.uk is a basic modeller. Projectionlab.com is much more advanced (free sandbox version does not save, so leave browser open until you finish).

Meaningful Money has podcasts about lots of topics, so if you want to learn about something in particular that may be a good place to start. There is also the Meaningful Money Retirement Guide book (not free, available from Waterstones and other bookshops).

£400 a month into pension is a start. A very rough rule of thumb to aim for is 15% of gross pay going towards retirement (pension, S&S ISA).

You mention dividends… why? You have not said that you have an earned income, so is the £400 coming from employment? Is it a workplace defined contribution pension, is it salary sacrifice, is there employer match or do they only do up to a certain amount? Look at what sort of pension you have, what contributions are going in from all sources, and then you could do some projections on what that might grow to by retirement age.

My income comes from wages in the business I own and run as well as dividends and bonuses dependent on company performance.

Talk to your accountant about tax efficient ways the business can pay into your pension. You may already be doing it as tax efficiently as you can but maybe there is a corporation tax saving possible. The more profitable the business the more you may be able to pull out into pension.

I think this needs to start with a conversation with your husband about the sort of retirement you want (and at what age for both of you).

If you have three houses then you will be doing much better than most. You can sell one of those and live off the proceeds, or use income from rent.

I wouldn't worry too much about pensions if that is an option for you (although I would maximise whatever you can pay in).

However you are talking as though you are likely to split up - if so, that's a different issue.