Saving for pension - any regrets?

[Smoggy]

Also do some maths if you're comparing a pension to an ISA and what your plans for retirement are. When you are on the younger side and if you are planning on taking a high income during retirement an ISA often works out a better investment. You dont get your 40% topup now in an ISA but if it grows as planned, the income at retirement is all tax free making it a much better investment

This would only be true if you expect to pay higher rate tax in retirement and aren't paying it now. i.e. you can get your money at a lower tax rate now than you would expect to pay when drawing it from a pension. Not many people will pay HRT in retirement.

[hugebrain]

This would only be true if you expect to pay higher rate tax in retirement and aren't paying it now. i.e. you can get your money at a lower tax rate now than you would expect to pay when drawing it from a pension. Not many people will pay HRT in retirement.

Isn’t the real comparison with the capital gains rate that us entrepreneurs pay with the tax rate that pensioners pay?

So, likely you will pay higher tax on the pension. (This assumes the company can grow the leftover money as fast as it would grow in a pension - not sure how likely this is)

I’ll still toss in 40,000 into my pension, but I don’t have any great hope that the government won’t steal it from me.

You youngsters out there should just spend the money and have fun.

[ladymuck]

It used to be financial advice was to retain a mortgage for the full term but frankly, Id rather stop paying a monthly mortgage and put the money to other uses.

Wasn't that because there used to be some kind of mortgage tax relief or am I making that up? I seem to remember something in amongst all the dust bunnies in my head that married couples got some kind of benefit.

[eek]

Wasn't that because there used to be some kind of mortgage tax relief or am I making that up? I seem to remember something in amongst all the dust bunnies in my head that married couples got some kind of benefit.

It wasn't just married couples and it resulted in a short lived boom in house prices in 1988 as the rules were changed to a maximum of £30,000 per property not per person.

[Andy Hallett]

I'll regret it if I hit the Lifetime Pension Allowance

[mattster]

Isn’t the real comparison with the capital gains rate that us entrepreneurs pay with the tax rate that pensioners pay?

So, likely you will pay higher tax on the pension. (This assumes the company can grow the leftover money as fast as it would grow in a pension - not sure how likely this is)

I’ll still toss in 40,000 into my pension, but I don’t have any great hope that the government won’t steal it from me.

You youngsters out there should just spend the money and have fun.

Don't forget corp tax paid before the entrepeneurs tax, so still 30% +, and that you can get 25% tax free lump sum out of the pension. But the real savings are for those inside IR35 who can negate all NI and tax, giving up to 100% immediate "return" compared to post tax savings (depending on exactly where you fall in the tax bracket - e.g. allowance claw back, child benefit cut off etc). Hard to beat that and, if you are getting on a bit, surely better to dump all spare earnings into a pension rather than pay off a mortgage, which you can then do with the lump sum.

[OneManBand]

Only regret is not starting sooner.
Pension pot had £550k before the markets tanked... not going to look until the markets recover again.
50 years old, no debts... so haven't done too badly, investing purely on ETFs and investment trusts.

[coxy]

I’m 45 with a pathetic 32k pension in a SIPP currently. 7 years off paying off mortgage on a nice house (maybe worth ~£420k) Been contracting last 14 years with a mix of some good rates and some not great. My wife is a low earner so I have not really been in a situation to put much into a pension with 3 kids, basic holidays most years and no fancy cars. I’m now putting in £20k but know this isn’t enough but it’s all I can afford with helping my kids go through Uni and just basic living costs. I regret not starting much younger but don’t regret a reasonable lifestyle for the majority of my kids young lives. I’ll be working well into 60s which worries me in the competitive software market, but don’t really have any other choice. I made my bed….

[coxy]

I am kind of torn on this.

I am 49 and have £300k in pensions - the financial advisor I have consulted recently says this is not great.

I have spent 8 years contracting and not contributing a great deal - but I have been able to afford to have a lot of great experiences with my children that just would not have been possible if I had aggressively paid into my pension or remained permie.

That said the rates I am commanding now mean I can pay the tax free £40k a year into pensions without noticing it too much and my mortgage is only £70k. There will be inheritances but they will not be huge and as we all know residential care can eat through them at an alarming rate.

I hopefully have another ten years of contracting ahead of me - my main concern is ageism preventing me working in my current market.

you’re about £265k ahead of me. I’m scared of seeing an IFA now, they’ll probably laugh me out the office.

[northernladuk]

you’re about £265k ahead of me. I’m scared of seeing an IFA now, they’ll probably laugh me out the office.

Nope, they will be used to people that have mishandled their money and are now facing a pretty miserable retirement. They can do what they can but you've got to look at yourself and your situation and ask what YOU are going to do to fix this. An IFA cannot magic money up that isn't there.