Retiring

rowarta said:
may not be an issue, if you can just check your total pension value v the pension lifetime allowance position. anything over the allowance can be taxed at 55% so could null any tax benefit.
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Hi, no the value won’t be over the allowance.
 
I look at Martin Lewis website regularly and particularly the forum link below. I learned lots from this. Understanding the tax benefits with pensions can earn you a bit of dosh. For example, pensioners or those with no income could still pay £2,880 per annum into a pension and earn £720, a return of 25 per cent.


forums.moneysavingexpert.com

Pensions, annuities & retirement planning

Categories - For help with everything to do with pensions and retirement.
forums.moneysavingexpert.com forums.moneysavingexpert.com
 
Segga said:
Great thread this, I’m after some advice please. I’ve got 15 years to go until I want to retire. That ties in with paying the mortgage off and Claiming my final salary pension.
Change of circumstances shortly means I’m going to be about £700 a month better off shortly and I want to put it towards my retirement plan but I don’t know what to do with it??
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Can you put any more into your pension?
 
Segga said:
Great thread this, I’m after some advice please. I’ve got 15 years to go until I want to retire. That ties in with paying the mortgage off and Claiming my final salary pension.
Change of circumstances shortly means I’m going to be about £700 a month better off shortly and I want to put it towards my retirement plan but I don’t know what to do with it??
Click to expand...
Pretty sure you can hold a SIPP even if you have a final salary. The only real limitations are you can only put away 40k in any tax year into something which is a pension plan (so that includes any contributions to your final salary) and as others have said watch out for the lifetime limit.

The limit is currently around £1.077m and for the next few years will increase in line with CPI.

If you put it into a SIPP you should also get additional savings in income tax added, this is normally done automatically by the SIPP provider. So if you put in £100 and your income tax rate is 40% you should get an additional £40 added. There are limits and it does depend on how much you earn as a salary and how much income tax you have paid at each rate band.

You may be better putting extra however into your final salary, particular if they match it. But the SIPP would give you more flexibility if you want to retire earlier and delay taking your final salary.

The other thing to look at is your mortgage and if it's worthwhile paying that off early. It's likely to be your biggest single debt and paying it off early gives you security and saves you a lot in interest. Whilst the rates are good (like now) you would get a better return by investing, but in 10yrs time who's to say the interest rate won't be back up to 5 or even 10%.
 
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Segga said:
Great thread this, I’m after some advice please. I’ve got 15 years to go until I want to retire. That ties in with paying the mortgage off and Claiming my final salary pension.
Change of circumstances shortly means I’m going to be about £700 a month better off shortly and I want to put it towards my retirement plan but I don’t know what to do with it??
Click to expand...
If you have a works pension scheme using salary sacrifice, such that you save tax and NI then it's probably a no-brainer to just bung it all into the pension. Even if not salary sacrifice then put into pension for tax benefits.

Or you could put some into a stock and shares ISA for more flexibility. Or a SIPP. Look at Vanguard, Hargreaves and Landsdown or Fidelity for example
 
rowarta said:
may not be an issue, if you can just check your total pension value v the pension lifetime allowance position. anything over the allowance can be taxed at 55% so could null any tax benefit.
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The lifetime allowance is currently £1,073,100 and increasing with inflation. I guarantee you that he’s not over it.
 
Personally, I think anyone looking at a retirement pool of six figures or more would be wise to seek professional help on structuring their retirement, and what monies to take from where when.

There are simple things that can save you significant amounts of money in retirement and NOT making mistakes is worth every penny you might pay for good advice.
 
King_Ralph_Blumer said:
I completely understand IR35
i don’t understand you saying it’s on the back burner. It’s fucked up every single person in my profession but not to worry about it.
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Fucked up those abusing it but was going to be extended to a lot of "self employed", guessing you are an IT worker?
 
SWP's back said:
The lifetime allowance is currently £1,073,100 and increasing with inflation. I guarantee you that he’s not over it.
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To be fair, there are an increasing number of people starting to fall foul of this who are on good but not big salaries (£100k+).

When I look at my DC pension over the last 6yrs it's increased by 13% year on year not including contributions. If the lifetime allowance is only increasing at around 2% for those with another 10 or 15yrs to go they may be above the lifetime limit.

I appreciate that as they say past performance is not a guarantee of future earnings but it is worthwhile considering.
 
Kompany Car said:
To be fair, there are an increasing number of people starting to fall foul of this who are on good but not big salaries (£100k+).
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I’m aware of the numbers bud. But he has a DB pension with 15 years to go until his retirement. He’d be one in a ten thousand if he’d built up enough guaranteed retirement income to class him as being over the LTA - £53,655 pa.
 
silvalining03 said:
Think they have frozen lifetime allowance until 2026
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There you go you see, you’re bang on. It WAS meant to carry on increasing with inflation but it appears they did indeed freeze it in the last budget.

Good job I’m getting out of the game as it appears I’ve stopped remaining up to date with what the Govt. is doing. My apologies.
 
SWP's back said:
There you go you see, you’re bang on. It WAS meant to carry on increasing with inflation but it appears they did indeed freeze it in the last budget.

Good job I’m getting out of the game as it appears I’ve stopped remaining up to date with what the Govt. is doing. My apologies.
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talk they may be looking to reduce LTA down to £800k or £900k to balance books.
 
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