Anyone else not have a pension?

[The Canny Contractor]

Pension/ SIPP

I wouldn't ignore the pension/ SIPP. I did for a long time then saw the light.
Here's why:

1. Diversification - Best to have a few asset classes stuffed away. i.e. Property, dividend stocks, pension/SIPP etc. All it takes is for the Government/ someone to change the rules.

2. Free contributions from the Government - Can sock away a maximum of 32K per annum from your Ltd company and the government will match your SIPP with 8K i.e. 20%. Yes, it will cost to withdraw pension down the line, however, can plan to minimise this tax.

3. You may have a head start already with your previous 'permie' pensions. Consolidate all of these in a SIPP (HL cater for this service).
Set up a fund/ SIPP that can be managed by yourself with lower costs/ better returns. Typical example is Vanguard Index fund i.e. Lifestyle 60/40 (cautious) or 80/20 (better returns, slightly riskier)

4. With the rules changing on dividends, the SIPP may be a better place to park your company money (with regards to minimising tax).

5. Think of the pension/ SIPP as a lazy income fund. After consolidating all your previous pensions/ stuffing away a lump sum, you don't necessarily have to add any more money. Sure, it's always best to make cash contributions for maximum returns. However, you could just drip feed a tiny amount or let the SIPP compound on it's own for 10+ years (leave it on accumulation phase). Use one of those little compounding calculators and play around with it. You'll be surprised what you could typically net...a set and forget exercise :- )

[wantacontract]

What Pjclarke said....

IF you aren't making some provision for future years while the sun is shining then in my opinion you are stupid.
Yes - you might find you want to work 'forever' as you click over 60 but it is more likely you will have had enough of the b**locks and bellends and having the option to walk/pick and choose work is a real luxury.
Use ISA's if you like/cant face the lock-in (this can actually help by stopping you making stupid decisions) but also consider a low-cost SIPP. They are brilliant for getting money out of the company and flexible options to withdraw from 55 mean it is a good choice.
You don't need an IFA, you don't need managed funds.
Go to HL.co.uk, setup SIPP, setup payment from company, buy Vanguard Lifestrategy 80 fund every month, get on with your life.
How much do you need to put in ? - as much as you can definitely live without (40k max into SIPP, 20k into ISA from April)
GLA

yeah spot on, that's what I have finally figured out, so actioned it three years ago.

[kaiser78]

I wouldn't ignore the pension/ SIPP. I did for a long time then saw the light.
Here's why:

1. Diversification - Best to have a few asset classes stuffed away. i.e. Property, dividend stocks, pension/SIPP etc. All it takes is for the Government/ someone to change the rules.

2. Free contributions from the Government - Can sock away a maximum of 32K per annum from your Ltd company and the government will match your SIPP with 8K i.e. 20%. Yes, it will cost to withdraw pension down the line, however, can plan to minimise this tax.

3. You may have a head start already with your previous 'permie' pensions. Consolidate all of these in a SIPP (HL cater for this service).
Set up a fund/ SIPP that can be managed by yourself with lower costs/ better returns. Typical example is Vanguard Index fund i.e. Lifestyle 60/40 (cautious) or 80/20 (better returns, slightly riskier)

4. With the rules changing on dividends, the SIPP may be a better place to park your company money (with regards to minimising tax).

5. Think of the pension/ SIPP as a lazy income fund. After consolidating all your previous pensions/ stuffing away a lump sum, you don't necessarily have to add any more money. Sure, it's always best to make cash contributions for maximum returns. However, you could just drip feed a tiny amount or let the SIPP compound on it's own for 10+ years (leave it on accumulation phase). Use one of those little compounding calculators and play around with it. You'll be surprised what you could typically net...a set and forget exercise :- )

Get a good IFA to work through this with you as a starting point.

[vwdan]

31 and in basically exactly the same situation - got a loan, but if you imagine it's the mortgage (as it was a renovation fund) it still works out effectively and it's low interest.

Will be reading this thread intently as it does kinda worry me (I say kinda because my generation seems broadly ****ed anyway - I know I'm far from alone). My big plan is still BTL or similar - hoping to get that off the ground sooner rather than later.

[SueEllen]

31 and in basically exactly the same situation - got a loan, but if you imagine it's the mortgage (as it was a renovation fund) it still works out effectively and it's low interest.

Will be reading this thread intently as it does kinda worry me (I say kinda because my generation seems broadly ****ed anyway - I know I'm far from alone). My big plan is still BTL or similar - hoping to get that off the ground sooner rather than later.

Spread your eggs.

[_V_]

Spread your eggs.

Spread what my dear? Oh your eggs, damn these old ears of mine.

[fatJock]

44 and only in the last few years recovered from the wipeout of equity that a mid 30s divorce brought.

Company pension pot of c£250K, about £40K in S&S ISAs and an outstanding mortgage of just under £90K. New to contracting so payments into company pension paused for the moment but I can continue to pay into managed fund going forward if I want. Growth has been average but not disappointing.

Wondering whether I should grow that pot or start a new SIPP or .....transfer pot to SIPP. Loathed to pay an advisor to tell me what I'm thinking (open SIPP, pay from LTD and invest in vanguard trackers etc) byut it's a bit of a minefield.

Reading that back, maybe best to chuck a few quid at an IFA now.

Any advice??

[ECommerceConsultant]

I'm 43, back in 2010 I started wondering about retirement, and this is my suggestion for you all


In my opinion, history has proven over the generations, in the long run, property, land, houses, apartments is the best underlying foundation of a pension plan and basically, whatever your total wealth, put the highest percentage into the safest investments and the lowest percentage into the riskiest investments

Good luck

Milan.

Excellent post, thanks for sharing, very well written and it's put things into perspective for me. I've also been worrying about not having a pension, given that I've been contracting for a long time. I did wonder about property being a better pension than an actual "pension"...so you've helped me a lot, thank you.

[sasguru]

Have a SIPP with a nice 6-figure sum in it, and recently sold 2 BTLs in London, proceeds of which are sitting in various trackers.
The latter make me uneasy as I can see stock markets around the world are frothy due to low interest rates/QE.
Not so sure of the UK property market, particulalry if Corbyn gets in, so I'm going to invest the BTL proceeds in a property in Lisbon/Cascais/Estoril, which has high all-year short-term rental demand and is still some way of its pre-recession peak. Also has the benefit of providing a nice holiday home.
Portugal has various tax advantages and no inheritance tax for direct lineage.

[radish2008]

49 and some tuppence pensions from a couple or permie jobs.

I plan on throwing myself into a volcano instead of retiring.