the shizzle > shootin' the shit

Pensions, Savings, Mortgages…

<< < (2/7) > >>

cowboyhat:
You should talk to a financial advisor, but I think they'd agree with Lagers.

Stuff it in now because compound interest. You can reduce the monthly amout if/ when you need more readies for living.

Paul B:
You're not far away from me are you? If so Rog Hindle (the smartest dressed climber you'll ever meet) would be a good starting point for pensions advice.

He also pointed me to someone for mortgage advice (after Shark's recommendation that was great retired) who has been brilliant; Peter Mullderig (the spelling may be off but I can dig out details).

petejh:
One of your port of calls for good info on the ins and outs of pensions, mortgages, SIPS and ISAs should definitely be Moneyvator. Their content is top notch and you'll learn a ton of useful stuff there. Some of the contributors to the comments are very clued-up. Try this one for starters: https://monevator.com/sipps-vs-isas-best-pension-vehicle/

Don't disregard your £20k ISA -  if you think you might want to stop full time work before you're able to draw your private pension then ISA's are great to bridge the gap between the end of earning income and starting to draw income from a private pension, as ISA's can be drawn from whenever you want. Depending on needs and wants you could split your contributions between pension/ISA for a time. There is also a way to get your full £20k ISA allowance every year, over the long term, without having a new £20k each year, if you're in the position of being able to open an offset mortgage. Worth considering, especially for tax-sheltering any possible inheritance lump-sums in the far future. 
Obvs SIPPS and ISA require investing commitment and it can be overwhelming working out which fund to put money in. Again Moneyvator is your friend for useful information on tracker funds if you do decide to go down the SIPP route.  A mistake some people make is trying to actively pick a fund theme - the general advice is don't. The no-brainer is to make regular auto-contributions into a global index tracker type fund with the lowest ongoing charge possible, and let global capitalism get to work compounding your money over the long term. That's not advice.

As others have said, if you're 40% taxpayer then the pension is virtually a no-brainer. It's impossible to say what income tax rates will be in 30- years from now but you'll possibly/probably not be withdrawing your pension income at 40% income tax, so it's a deferred benefit on the way in and a possible 20% tax saving on the way out at current rates.

petejh:
On the specific question of whether you'd be better paying into a pension or paying down mortgage/starting with a smaller mortgage, they've done a few articles over the years. Here's one from this year: https://monevator.com/pay-off-mortgage-or-invest/

No definitive answer, emotions/peace of mind also come into the calcs.

lagerstarfish:

--- Quote from: lagerstarfish on March 24, 2023, 07:16:00 pm ---(tax relief plus pension investment growth) vs (cost of borrowing interest plus increase in property value)

at 40% tax relief I would be looking at building a secure pension early - it will be there later even if you have to stop work for any reason

also worth considering what can be passed on if you die

--- End quote ---

By way of reflection - I only had 2 years paying the higher income tax rate and at that time put everything that wasn't spent on drink and drugs into property. I lost most of that property due to relationship breakdown and not working for a couple of years, but in the end still managed to use the remaining equity to get myself reasonably stable.
I wouldn't have been able to do that if the money had been tied up in sensible pension stuff.
Just saying

Navigation

[0] Message Index

[#] Next page

[*] Previous page