Saving for pension - any regrets?

[northernladuk]

And you continue to be a rude jerk in the professional forums which also isn't allowed. Hypocrisy much?

How about you stop being a jerk and in particular, stop being a jerk targeting individual members, outside of General. Moderators don't require your help. If you can't restrain yourself from bickering with (bullying) certain members, use the ignore feature for your own good and everyone else's. I can't be the only one sick of it.

So you can be a jerk to me when I'm being a jerk to PC? He's the one that hasn't had a single post thats not been moved, closed or posted anything close to useful. You are sick of me to the point you've spoken up. I totally get that. 100%. Because I'm in the same situation as PC. Hypocrisy doesn't stop with me it seems.

But it's a fair point as I know how frustrated I get about PC so I totally get you. I'll delete my response and will try and restrain myself but you do need to direct your ire at the mods for doing absolutely nothing about PC who is the root of the problem time and time again.

[Protagoras]

It is reported that the average pension pot in the UK is £73,568 (https://frazerjames.co.uk/how-much-d...-retire-at-65/)

Add to that a state pension of c.£9.4k p.a. (assumes full entitlement).

That doesn't leave a lot of income for the 'average' pensioner! As a relatively well off contractor community, tax aware, and able to save and invest, the position is generally rather different.

I reckon that given inflation (admittedly caused by government in the first place!), governments will be forced to raise the state pension - possibly by rather a lot (especially since it's a great way to obtain voter support short term).

If I'm correct this will need to be funded. "Wealthy" pensioners are to some extent an untapped source. I therefore think that there are risks that
- LTA will remain fixed or be reduced
- Some sort of additional tax will be levied on pension income e.g. H&SCL
- Tax relief at source for pension savings could be a target

Another policy risk is that of the age limits being further increased making pensions less accessible, and hence less desirable to those more in control of their destiny.

Hence I think that looking forward, pension saving is probably more exposed to policy risk than it has been historically.

[hobnob]

Weirdly, I happened to see this recently. It gives a couple of different options
https://youtu.be/hqfsfpK8WZU

Interesting, thanks. One key point from that video is that pension money isn't subject to inheritance tax, which is supported here:
Tax on a private pension you inherit - GOV.UK (www.gov.uk)

If you die after 75, your heirs will have to pay income tax. The video suggests leaving your pension to grandchildren rather than children, on the basis that they'll be in a lower tax bracket and therefore it will have less of an impact.

[_V_]

What about us poor buggers that are close to hitting the £1.1m pension pot limit?

[_V_]

What about us poor buggers that are close to hitting the £1.1m pension pot limit?

And yes I know there's my wife's pot too, but what about us poor buggers that are close to hitting the £2.2m pension pot limits?

[WTFH]

Any regrets? Yes, the savings from the mid 90s to mid 00s were a waste - they didn't even keep up with inflation.

[_V_]

I think most IT contractors were up until the last few years, operating outside of IR35. This meant they were taking a small salary and paying out in dividends or building up a war chest inside the company. I guess now many are either perm or inside IR35 and older, and realising you need at least £500K pot now for even a very basic retirement at 55.

Unfortunately, the £40K limit means unless your are some 10 years from retirement, it's probably too late to make it if you have almost nothing.

However, I would assume those without a traditional SIPP style pension, would have at least a very large and expensive house to downsize from and/or several BTL properties to sell, and perhaps a good chunk of money in ISA too.

If you splunked all the money, then pray those companies looking for "Energetic, enthusiastic, fast learners" are looking for 60 and 70 years olds.

[JJUXI]

For those earning substantially above the norm, such as IT contractors, it makes more sense to max out contributions later in life rather than parting with money you badly need in your 20s and 30s.

On that basis I have been heavily contributing in my 40s to the point where the investment return alone in my 50s should get me up near the LTA. The tax case for a LTD contractor is compelling, particularly versus the more penal rates of tax such as the 100K-125K band.

The pension LTA is an achievable target for most on here, and will provide a decent but not luxurious standard of living. Depending on what you intend to buy or do in your 60s and beyond, it may be 'enough'. Bear in mind you are adding 1 or 2 x state pensions in your late 60s too.

[mattster]

Unfortunately, the £40K limit means unless your are some 10 years from retirement, it's probably too late to make it if you have almost nothing.

Worth remembering that you can catch up the last three years, so you can add whatever you missed - potentially up to 80k per year. Better, probably, if you can live off any non tax privileged savings and chuck as much of your inside IR35 earnings into a pension until you hit the limit if you are getting near retirement age.

[Protagoras]

Worth remembering that you can catch up the last three years, so you can add whatever you missed ...

but only if you had a scheme already open in the year(s) you're catching up on