Financial Advice

[Cooperman]

Yes, will do - the various names are on my work laptop so will send later on.

Martin Lewis is a great source of learning material you are spot on but heard too many stories of people following that believing he can do no wrong. He says as he heads off to take his money out of the Nigerian diamond mine!

Cheers Phil

 

[JackSomething]

Thanks for all the replies everyone and will gladly receive the list Phil has offered.

I had a few hundred thousand in various savings accounts before buying an new house outright. Once we completed the sale of our old house (and I get my higher rate LTT refund), I'll have about half of what I had before. About a third of it is in a cash ISA which I'm currently keen to keep putting the maximum in while I can as I am getting hammered tax-wise on the interest I was previously earning from the various savings accounts.

I'm mid-40's, so looking at around 20 years before retirement, but looking to bring that forward as much as possible! I'm fortunate enough to be employed in a Local Authority and so have what seems to me to be a good pension building up, although of course I'd have to work to 68 if I want to maximise it. There are options to put more in, like a shared cost AVC, so want some advice on that.

 

[monmouth]

Phil is right. You need to be able to answer (to yourself, honestly) some core questions around things like required future life needs, time horizons, and, most tricky of all I think, risk appetite and risk tolerance. It will surprise nobody that everything I’ve done has been based around what I can afford to lose, rather than what I might gain, so I am probably overly risk averse, but it lets me sleep at night.

At 67 I now have a high proportion of cash investments or equivalents, and in S&S a lower risk 40/60 bond fund. I still keep a proportion in riskier assets…if I live to 80 they might bear fruit, and as Coops says, they way outperform the cash based stuff, but I always assume they will half at some point. Markets look way overvalued to me, but I’ve thought that for years, and they keep going up…

So, know yourself, before trusting an IFA, and beware ongoing charges. A lot of what they might recommend you can do through HL or Fidelity yourself (other platforms are available) at much lower charges with trackers and low cost funds, or even your own portfolio of shares (you can mirror the risk and performance of the FTSE with just 18-20 shares of varying betas).

The only time I went to an IFA (Penguin in Cardiff) I was really unimpressed. He told me nothing I didn’t already know and rubbed me up the wrong way. Just a personal opinion, other people I know rate them very highly and, to be fair, I might have rubbed him up the wrong way too.

 

[monmouth]

Thanks for all the replies everyone and will gladly receive the list Phil has offered.

I had a few hundred thousand in various savings accounts before buying an new house outright. Once we completed the sale of our old house (and I get my higher rate LTT refund), I'll have about half of what I had before. About a third of it is in a cash ISA which I'm currently keen to keep putting the maximum in while I can as I am getting hammered tax-wise on the interest I was previously earning from the various savings accounts.

I'm mid-40's, so looking at around 20 years before retirement, but looking to bring that forward as much as possible! I'm fortunate enough to be employed in a Local Authority and so have what seems to me to be a good pension building up, although of course I'd have to work to 68 if I want to maximise it. There are options to put more in, like a shared cost AVC, so want some advice on that.

The defined benefit scheme I assume you are on is worth its weight in gold. AVCs in that scheme, especially if you can still buy discrete added years, would be my first port of call to look into, unless you think you’ll need the cash earlier…I’m not licensed to give financial advice…

 

[MajorR]

Phil, I’d appreciated the same pm too. I’m semi retired and already receiving a pension, but I’d benefit from some planning. Thanks

 

[Niigata Jack]

Your workplace pension is invested into funds you can buy yourself.

For someone with twenty years ahead of them:
£500/month into a S&S ISA at 8% = £360k
£500/month into savings at 3% = £160k
Two hundred grand difference!

I got 18 months year November, 66,10 months unless I work on a little bit, Mrs isn't due to retire until Nov 2027.

My current work pension is with Nest and is doing well at moment considering I've only been there just coming up to 3yrs.
I amalgamated the others altogether a few years ago.

 

[Niigata Jack]

If you think you need some guidance about investing be it pensions or ISAs, you might want to search this guy out on YouTube - Damian Talks Money. He is not an IFA but watching a few of his videos may help you to understand what the investing world is all about so you are a bit more informed when approaching firms for advice

I really struggle to be honest that's why I went down the ISA, Mrs and I have 5%+ 12 month saving plans with a couple of banks as well, Virgin account holders can apply to get 6.5% deal as well, max monthly pay in is £250, gonna look into that over weekend.
Need to find a better % age to put money into as well, fixed bonds are advertised a lot, but me being cautious puts me off, a lot are bonds in solar which seems like a red flag to me.

 

[PSumbler]

The defined benefit scheme I assume you are on is worth its weight in gold. AVCs in that scheme, especially if you can still buy discrete added years, would be my first port of call to look into, unless you think you’ll need the cash earlier…I’m not licensed to give financial advice…

DB schemes are interesting. Both myself and Mrs S had one from previous employments. I transferred mine out ten years ago and was the best thing I ever did - its now worth far more out of the scheme then it would ever have been in it . But we elected to leave Mrs S one where it was so we have some level of guarantees and index linking of the scheme.

One thing I would add with pensions at the moment is annuity rates are crazy (6% plus for a 60 year old with a 30-year guarantee) making that very attractive and taking out the risk.

If your pot was say £500k this would say get you £125k tax free and an income of £22.5k pa guaranteed for 30 years (assuming that 6% rate)

 

[PSumbler]

Phil is right. You need to be able to answer (to yourself, honestly) some core questions around things like required future life needs, time horizons, and, most tricky of all I think, risk appetite and risk tolerance. It will surprise nobody that everything I’ve done has been based around what I can afford to lose, rather than what I might gain, so I am probably overly risk averse, but it lets me sleep at night.

The older you get your risk appetite will largely reduce particularly as your capacity for loss also reduces. As a 30 year old a 10% market drop is manageable as the markets will largely recover over time. If that happens five years before retirement the bounce back may not be as effective.

I'm 55 in April and thinking its time to start adding some reduction in risk to the pension in particular - it's done well over the past few years and closing in on an amount that may mean I can retire at some stage before I am 60 but I will become pretty risk adverse at that stage (hence my post above about annuities)

The only time I went to an IFA (Penguin in Cardiff) I was really unimpressed. He told me nothing I didn’t already know and rubbed me up the wrong way. Just a personal opinion, other people I know rate them very highly and, to be fair, I might have rubbed him up the wrong way too.

I can relate to that - as with anyone giving a service you generally need a personal connection and its vital to trust any adviser you deal with, after all in many occasions you are trusting them with helping deliver the future you want

 

[PSumbler]

I got 18 months year November, 66,10 months unless I work on a little bit, Mrs isn't due to retire until Nov 2027.

My current work pension is with Nest and is doing well at moment considering I've only been there just coming up to 3yrs.
I amalgamated the others altogether a few years ago.

Again, everything is personal choice but the fear of having enough to get through retirement is often an overstated amount of money.

At some stage the state pension kicks in (depending on your age) and if you have a private pension its possible to draw more money in the early days and reduce it down as the state pension kicks in. That is my plan.


But look at what your essential expenditure needs to be. How much you want for "luxuries" on top of that and use a basic tax calculator to gross that monthly net income up to an annual income.

Take that annual income and divide it by say 6% (see previous annuity rate quote) and that tells you broadly what your pension pot needs to be to deliver that income. (Remember that figure should be after you take your 25% tax free cash)

This is hypothetical and works for me so my disclaimer is this is not financial advice and you should consult someone who finished their exams instead of taking the easy option

 

[J_B]

Again, everything is personal choice but the fear of having enough to get through retirement is often an overstated amount of money.

At some stage the state pension kicks in (depending on your age) and if you have a private pension its possible to draw more money in the early days and reduce it down as the state pension kicks in. That is my plan.


But look at what your essential expenditure needs to be. How much you want for "luxuries" on top of that and use a basic tax calculator to gross that monthly net income up to an annual income.

Take that annual income and divide it by say 6% (see previous annuity rate quote) and that tells you broadly what your pension pot needs to be to deliver that income. (Remember that figure should be after you take your 25% tax free cash)

This is hypothetical and works for me so my disclaimer is this is not financial advice and you should consult someone who finished their exams instead of taking the easy option

Yes, having retired early I was drawing much more from investments up until the state pension kicked in. A year later my wife's state pension started and we're now getting over £2K every 4 weeks plus her teacher's pension. Thus drawing from investments has dropped to the point where we're living well and the investments are increasing in value despite drawing whatever we need from them.

 

[Niigata Jack]

Again, everything is personal choice but the fear of having enough to get through retirement is often an overstated amount of money.

At some stage the state pension kicks in (depending on your age) and if you have a private pension its possible to draw more money in the early days and reduce it down as the state pension kicks in. That is my plan.


But look at what your essential expenditure needs to be. How much you want for "luxuries" on top of that and use a basic tax calculator to gross that monthly net income up to an annual income.

Take that annual income and divide it by say 6% (see previous annuity rate quote) and that tells you broadly what your pension pot needs to be to deliver that income. (Remember that figure should be after you take your 25% tax free cash)

This is hypothetical and works for me so my disclaimer is this is not financial advice and you should consult someone who finished their exams instead of taking the easy option

Made an error with Mrs retirement date its Nov 2029 not 2027

 

[Cooperman]

Yes, having retired early I was drawing much more from investments up until the state pension kicked in. A year later my wife's state pension started and we're now getting over £2K every 4 weeks plus her teacher's pension. Thus drawing from investments has dropped to the point where we're living well and the investments are increasing in value despite drawing whatever we need from them.

Drawing from an investment which is growing at a rate greater than the drawdown, that’s an awesome position to be in.

 

[Robbie]

Did anyone ever receive a prison sentence for the British Steel fiasco?

Think they outwitted the gullible and left in the dark money tree at their mercy .

Clauses , terms and condition small print in contracts covered them at all stages , you did not read the paperwork thoroughly yet you were happy to sign your hard earned over to us ,

Think a Government Inquiry did follow and some IFA firms were called out as bad apples .

As most cases the issue eventually ran out of steam and workers had to realise they had been conned into investing big bucks into the pockets and commission fees to smart talking sales patter .

 

[PSumbler]

Made an error with Mrs retirement date its Nov 2029 not 2027

When you say retirement date are you referring to state pension age ?