How much do you save in your pension each month?

[DieScum]

Interesting discussion. While it would be nice to leave stuff for the family I'd much prefer to spend it while I am alive and they can earn it themselves just like everyone else.

I put in a grand a month but I am a permie so get a contribution.

[Fred Bloggs]

Now then, I'll try to explain...........

I have been buying income unit trusts for quite sometime in my SIPP, a £1k per month investment. A while ago the trusts were paying about 4% income into my SIPP, rolling up. The capital value today is about 25% less than it was. But......... I'm still getting the same income payments rolling up into my SIPP on those investments each year. The capital value is irrelevant for now. It's only an actual loss if you realise it.

Today, because the price of the trust(s) I'm buying is now 25% lower, every unit I buy now pays 5% income, still rolling up in the SIPP. It is possible that the trusts will reduce their dividend yields, however, the best trusts haven't done this in 15 or 20 years or more.

It is my intention to eventually take the 25% tax free capital and put it into ISA's to continue to generate that same 4 to 5% income whilst then drawing that 4 to 5% out of the SIPP as a retirement income on the remaining SIPP capital.

Ofcourse, the real yield is really more than 4 to 5% as I paid absolutely no tax on the money put into the SIPP. The capital value is almost irrelevant as long as the income is being paid.

If the income stream ever stops then we really are doomed and any money has by then become pretty worthless anyway.

Anyone who cannot see the benefit of what is going on here I'm afraid is really, really, dumb IMO.

[DimPrawn]

Now then, I'll try to explain...........

I have been buying income unit trusts for quite sometime in my SIPP, a £1k per month investment. A while ago the trusts were paying about 4% income into my SIPP, rolling up. The capital value today is about 25% less than it was. But......... I'm still getting the same income payments rolling up into my SIPP on those investments each year. The capital value is irrelevant for now. It's only an actual loss if you realise it.

Today, because the price of the trust(s) I'm buying is now 25% lower, every unit I buy now pays 5% income, still rolling up in the SIPP. It is possible that the trusts will reduce their dividend yields, however, the best trusts haven't done this in 15 or 20 years or more.

It is my intention to eventually take the 25% tax free capital and put it into ISA's to continue to generate that same 4 to 5% income whilst then drawing that 4 to 5% out of the SIPP as a retirement income on the remaining SIPP capital.

Ofcourse, the real yield is really more than 4 to 5% as I paid absolutely no tax on the money put into the SIPP. The capital value is almost irrelevant as long as the income is being paid.

If the income stream ever stops then we really are doomed and any money has by then become pretty worthless anyway.

Anyone who cannot see the benefit of what is going on here I'm afraid is really, really, dumb IMO.

I can really see the benefit of losing 25% of your money and relying on a dividend stream that's about to dry up and having your money locked in to 55 (no doubt 60 next budget time), and paying the fees every year reducing your growth by several % and relying on a fund manager.

Stop it, I'm crying.

I'll stick to making 100% on property, and then switching to Gold and later commodities and make another 100% in a few years.

[Fred Bloggs]

Good luck, if you can make money like that. I can't, I've tried.

[DieScum]

I'll stick to making 100% on property, and then switching to Gold and later commodities and make another 100% in a few years.

As fred said good luck to you... but if you are so good at timing and can guarantee 100% then why don't you leverage up and make millions and millions.

Back in the real world nobody can predict the future and Fred is talking a lot of sense.

But your 100% in the future sounds great. Good luck with that.

[PM-Junkie]

As fred said good luck to you... but if you are so good at timing and can guarantee 100% then why don't you leverage up and make millions and millions.

Back in the real world nobody can predict the future and Fred is talking a lot of sense.....

Apart from the fact that he is putting all his eggs into a couple of small baskets.
Remember, everyone thought endowments were a sure thing - until they weren't. Everyone thought pensions were a sure thing - until they weren't. People even thought the dollar and the pound were a sure thing once!

When it comes to your money, trust NOBODY, and diversify diversify diversify.

[frank size]

I'm quite surprised at the response to this thread. Putting into a pension is a great way to save tax. Those that say "mine has reduced in value etc etc" seem to miss the point that it is a long term investment. when my investments go down my monthly contributions can now just buy more!! And those that think they can't control their investment - speak to an adviser

doh!

[Fred Bloggs]

As fred said good luck to you... but if you are so good at timing and can guarantee 100% then why don't you leverage up and make millions and millions.

Back in the real world nobody can predict the future and Fred is talking a lot of sense.

But your 100% in the future sounds great. Good luck with that.

Thanks for the comments. My thoughts exactly.

I have got other savings and I have got a safety net of 25 years worth of final salary pension waiting for me too.

Regarding the loss in value of my SIPP over the last year, it really doesn't matter for the reasons I gave above, but also, the loss actually only equates approx to the tax I've saved compared to distributing the cash and putting into ISA's. As I've tried to outline above, a lot of the cash will eventually end up in ISA's anyhow. My SIPP is invested with the UK's finest investment brains i.e. Neil Woodford, Robin Geffen etc... (unit trusts) and whilst they have all lost money the last year, I guess Dim P has also if he/she was honest with us. At the end of the day, a basket of income producing shares is the only reasonable hedge against inflation that there is open to us mere mortals and if blue chip companies ever stop paying dividends then anything else we do really is irrelevant.

[Fred Bloggs]

Apart from the fact that he is putting all his eggs into a couple of small baskets.
Remember, everyone thought endowments were a sure thing - until they weren't. Everyone thought pensions were a sure thing - until they weren't. People even thought the dollar and the pound were a sure thing once!

When it comes to your money, trust NOBODY, and diversify diversify diversify.

Thanks for the comments. I have other savings and a (25 years) deferred final salary pension too. Along with zero debt. I had endowments and surrendered them about 2/3 of the way in. It was a good decision to do so.

[TimberWolf]

Talking of endowments. I've got one running and the solicitors haven't mentioned it with regard to my on-going flat sale. Presumably now is not a good time to cash it in (another 10 years left), and presumably you can continue to pay into one even if you don't have a mortgage?