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Flora MaDonald

Pension Advice Required

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8 hours ago, Eisegerwind said:

Missed the edit.

Maybe my fault, should have made it clear the the property I'm paying for is the one I'm living in. Although I thought the 'old socialist' would have covered it. Anyway, leverging, debt averse, inbuilt negativity just phrases to con people out of there hard earned and get them on to the capitalist merry go round.

 I was meaning multiple properties by spreading  risk, rather than having money tied up in 1 type of property which may or may not be attractive for buyers in 10-20 years time + market might have moved due to lack of jobs in that area ( I know 2 joiners who built mega big houses with view to sell - but they never did )  + you could charge less than market if you want to be socialist & less than what the mortgage would be  (I only have 1 property and moving from abroad to abroad - Rent we would be charging would be around 55-60% of what the person would have to pay as a mortgage on this property, even less when considering I will be covering council tax & expensive factoring fees )

I do't think you should make the assumption that House Prices will all go up - there should have been a house price crash in 2008, but government started all the quatitive easing and printing more money & didn't increase interest rates

 

 

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2 minutes ago, Orraloon said:

Who was it who was funding their pension by investing in silver. Was it Scotty? Haven't heard much recently about how he got on.

Buying some precious metal as a safety net might not be a bad idea in today's economic climate. Some economists are suggesting that when brexit eventually happens it could trigger another global meltdown. Possibly bigger than the last one. It's mainly guesswork though, IMO.

 

Scott was buying gold - pity he doesn't bury it in his garden - will visit him this year in Toronto 

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2 hours ago, Huddersfield said:

As someone who has drifted through the ages of Socialism from young firebrand to unreconstituted Trotskyist to grumpy old leftist git, I get where you are coming from. My dad was a bit of a trade unionist & lifelong Labour man in his day (my first ever picket line was with him at Hopkinsons' in Huddersfield in 1972 when he was on strike for months on end). Anyway, I used to argue the blue blazes with him in my teens when he'd tell me to buy a house, save up..."you'll never beat Capitalism so you might as well join it"...I hated him for saying it, yet here I am :(

For me personally, much as it sticks in my throat to be anywhere near a company with 'Wealth Management' in its name...& bugger me I don't feel bloody wealthy, but I reckon Capitalism's need to extort my labour for a pittance would put me in an early grave if I couldn't find a way out.

So I'm performing some political mental gymnastics here telling myself that I've found a way to screw the wage slave system, sack off the student loan I'm supposed to be forking out on until I'm 85 & still sit posting political rants on meaningless internet forums to convince myself that I'm still a right-on radical dude that can change the world. All I'm saying is come the glorious day of the Corbynistas, just keep your hands off my portfolio.

Agree with you - you need to make the assumption they are full of shit & bullshitting you (obviously some guys on here will be IFA's & will take offence - but hey ho)l

Guys are in it for the commission & should always remember they are salesmen/saleswomen - As i said previously i know plenty of folk who failed their Chartered Banking Professional exams ( I passed obviously 😉 ) & have moved to wealth management & sailed through  - Say 20 years ago - guys could pass their exams and be selling within a month - My IFA when 1st discussing told me he had studied fora year to pass UK standard exams  - I'm like "yes - that's only cos you chose to take a year - could have been done in a month" & his answer was " yes ok you are correct"   My best friend moved from RBS to Prudential so been around it a while + my uncle was IFA as well (moved from agricultural sales background in Saudi/Zambia )

I never take anything on face value from them -  eyes need to be wide open 

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I am 55 later this year. I have had a number of free consultations with IFA's over the years  but have never progressed beyond the first consultation as I have always felt they are offering anything different to what I currently do. As I get closer to 60 I will probably look to use the their services if only for tax planning etc. 

Edited by EddardStark

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50 minutes ago, EddardStark said:

I am 55 later this year. I have had a number of free consultations with IFA's over the years  but have never progressed beyond the first consultation as I have always felt they are offering anything different to what I currently do. As I get closer to 60 I will probably look to use the their services if only for tax planning etc. 

typically unless you want to be risky @ 55 (although depends on your planned retirement age )  you  should be out of equities or have reduced amount of equities (qualification- i am 100% in equities @ 48 ) 

Your existing IFA should be meeting you 6 monthly/yearly to ensure you are investing in the area's you want to invest

I track my pension daily, because i want to see where the trend is & ensure the choices i made 2/3 years ago are reasonable 

In last 10 days has increased 5% although that was recovering losses the prior few weeks 

Edited by euan2020

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10 hours ago, euan2020 said:

typically unless you want to be risky @ 55 (although depends on your planned retirement age )  you  should be out of equities or have reduced amount of equities (qualification- i am 100% in equities @ 48 ) 

Your existing IFA should be meeting you 6 monthly/yearly to ensure you are investing in the area's you want to invest

I track my pension daily, because i want to see where the trend is & ensure the choices i made 2/3 years ago are reasonable 

In last 10 days has increased 5% although that was recovering losses the prior few weeks 

I split my portfolio into three areas. Pensions, Stocks and Shares ISA and cash savings. In terms of pensions I have medium risk fund which moved into less risky asset classes as I near 60. My ISA is slightly more risky but I review it almost weekly. It has suffered a lot in the last year but again I am looking long term if you count 5 years as long term. I have quite a bit tied up in various cash savings, some would say too much but I am pretty cautious as I don't have security of employment and these days and I don't earn a great deal. I also have an old pension from  employer I worked with for 10 years which is linked to RPI. 

Edited by EddardStark

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As things stand at the moment, the pot I set up (which is classed as low risk/cautious) has grown by around 1.5% over the last few weeks. I see it some days having put on a tidy bit then other days losing of course. The pot is a mix of all sorts when I look at it.

As I said, I doubt I'd have moved it if I wasn't struggling with my health. I've taken a decision to drop out of mainstream classroom work as I was struggling with a lot of the basic tasks & getting a few raised eyebrows but still working full-time albeit on what is in effect a zero-hours contract.

My plan pre-redundancy/re-training had always been to try & retire at 60-62ish, when I'd have been due around £15-20K pa. I'm 55 in August & if I took it then, I'd be down to around £9K pa. I'm taking a bit of a gamble that by not having to work (or at least work full time) I can spend my days dossing on the TAMB enjoy some quality of life & maybe earn a bit extra from supply teaching/tuition. If the fund matches its growth from the last 10 or so years (including the crash period) then I'll be able to live at least much as I do now & any extra bits & pieces I can make will get my roof fixed.

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On 2/8/2019 at 8:26 AM, euan2020 said:

Just an opinion 

If you Xfer out of a defined benefit (final salary scheme) you will likely get 22-23 times the annual pension (todays annual values )  ie  If you are are due GBP20K a year will get give circa GBP400K which you can then invest, & hopefully have growth in excess of what the inflationary increase is yearly from your defined benefit scheme

Depends as well if you are married - If you pass typically (I think) your wife would get 50% of the defined benefit Pension as income & then itdies with her - If you have a private pension then you can bequeth 100% of what remains (avoiding death duties on pot by bequeathing this in to a further pension pot for her to manage) & which she can bequeath to further family/children etc

If no wife - then you can bequeath the Pension Pot into another Pension Pot for your inheritor, so not losing what you earned

I moved my 12 year service Final Salary scheme into private because it only represented 25% of my total pensions, and i thought i could beat the 2.5% average inflation - have grown this by 25% since i did this 2.5 years ago (full on equity funds though ) 

Anyone interested - these are main one's I settled for - Fundsmith & Scottish Mortgage  & Lindsell have excellent 5-10 year growth (although whole market has grown in that period as a qualifier - although what they do - is not churn shares + low management fees + pick good companies with good cash flow )     

Scottish Mortgage Investment Trust Plc GBP

Fundsmith Equity T Acc GBP

Lindsell Train Global Equity Fund B

Baring Europe Select Trust I GBP I

 

 

 

Funs  

     

Pensions been bouncing around a lot this last 2 weeks with Trump/China/Brexit etc

Mine is up 48% from Investment 3 years ago, when i consolidated my Pensions, but down 4% from what is was 2 weeks ago - 23% for the YTD

I am likely too much into Equity  

 

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What's the thoughts on using AVC's (Additional Voluntary Contributions) into a private pension provider as an approach to retiring early while having a Defined Benefit (career average) untouched until as close to official retirement age as possible in order to avoid penalty/reduction on your main pension. 

Positives? ... if you're in a position to do so you could put as much of your earnings as possible (up to £40k pension limit) in via AVC's and avoid paying income tax on those earnings - then have access to the money via taking that private pension any time from 55. 

Seems like a sensible idea for a 20% tax payer and an absolute no brainer for a 40% tax payer. 

Drawbacks? 

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6 minutes ago, AlfieMoon said:

What's the thoughts on using AVC's (Additional Voluntary Contributions) into a private pension provider as an approach to retiring early while having a Defined Benefit (career average) untouched until as close to official retirement age as possible in order to avoid penalty/reduction on your main pension. 

Positives? ... if you're in a position to do so you could put as much of your earnings as possible (up to £40k pension limit) in via AVC's and avoid paying income tax on those earnings - then have access to the money via taking that private pension any time from 55. 

Seems like a sensible idea for a 20% tax payer and an absolute no brainer for a 40% tax payer. 

Drawbacks? 

One drawback is that you don't get access to your money until you reach a certain specified age. Different schemes have different ages. But that can also be a positive as it means you are less likely to spend it?

There is no need for anybody to pay 40% tax unless they choose to do so. Anything over the 40% threshold can be put into a pension scheme of some sort, and you can get the tax back. 

Don't forget that you will pay tax on your pension just like any other income stream when start to draw it , so you should factor that in as well.

There are so many ways to invest in a pension nowadays that AVCs (whether through your employer or free standing) may not always be the best option for you. And, every individual's circumstances are slightly different, so you should consult a financial advisor to review your entire financial and personal situation to try to decide what is best for you.

 

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7 hours ago, AlfieMoon said:

What's the thoughts on using AVC's (Additional Voluntary Contributions) into a private pension provider as an approach to retiring early while having a Defined Benefit (career average) untouched until as close to official retirement age as possible in order to avoid penalty/reduction on your main pension. 

Positives? ... if you're in a position to do so you could put as much of your earnings as possible (up to £40k pension limit) in via AVC's and avoid paying income tax on those earnings - then have access to the money via taking that private pension any time from 55. 

Seems like a sensible idea for a 20% tax payer and an absolute no brainer for a 40% tax payer. 

Drawbacks? 

you would need to be cautious on what your investment strategy is - if this is a short timeline until you are 55 - balls out equity or more conservative

Although - People are starting to consider their Pension as a living investment in that still allows or growth after you retire - worthy of taking look at 20-30 historical timeline, to see if want to participate in the ups and downs of the market

 

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On 1/6/2019 at 1:53 PM, Orraloon said:

Different pension schemes have different rules about what you can and cannot do. You need to speak to an independent financial advisor. They need to know all your financial and personal details before they can make proper recommendations. 

I would be amazed if anybody recommends that you transfer your old pension into your new pension scheme, though.

You were right. Best advice for me seems to be move it into a personal pension if I’m interested in taking the tax free lump sum at 55. Looking at costs of advice now.

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On 2/8/2019 at 2:26 PM, euan2020 said:

Just an opinion 

If you Xfer out of a defined benefit (final salary scheme) you will likely get 22-23 times the annual pension (todays annual values )  ie  If you are are due GBP20K a year will get give circa GBP400K which you can then invest, & hopefully have growth in excess of what the inflationary increase is yearly from your defined benefit scheme

Depends as well if you are married - If you pass typically (I think) your wife would get 50% of the defined benefit Pension as income & then itdies with her - If you have a private pension then you can bequeth 100% of what remains (avoiding death duties on pot by bequeathing this in to a further pension pot for her to manage) & which she can bequeath to further family/children etc

If no wife - then you can bequeath the Pension Pot into another Pension Pot for your inheritor, so not losing what you earned

I moved my 12 year service Final Salary scheme into private because it only represented 25% of my total pensions, and i thought i could beat the 2.5% average inflation - have grown this by 25% since i did this 2.5 years ago (full on equity funds though ) 

Anyone interested - these are main one's I settled for - Fundsmith & Scottish Mortgage  & Lindsell have excellent 5-10 year growth (although whole market has grown in that period as a qualifier - although what they do - is not churn shares + low management fees + pick good companies with good cash flow )     

Scottish Mortgage Investment Trust Plc GBP

Fundsmith Equity T Acc GBP

Lindsell Train Global Equity Fund B

Baring Europe Select Trust I GBP I

 

 

 

Funs  

     

I understand what you are talking about now😂. 11k final salary so about 240k transfer value. Prob going for it as should also have about 12 years teachers pension and obvs state pension so I’m confident the official advice will recognise I’m ok with moving it and accessing the lump sum at 55. Thanks for the advice.

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1 hour ago, killiefaetheferry said:

I understand what you are talking about now😂. 11k final salary so about 240k transfer value. Prob going for it as should also have about 12 years teachers pension and obvs state pension so I’m confident the official advice will recognise I’m ok with moving it and accessing the lump sum at 55. Thanks for the advice.

just be cautious on what your expectations are - if you are expecting to live to a ripe old age, likely the defined benefit is better + if you have surviving spouse who would pick up say 50% of remaining yearly pension entitlement (+ defined benefit will pay out a lump sum as well, and start paying out early if you wish, at a lower pay out)

Private Pension will allow you to be invested after taking out the lup sum if you want to , so still invested to grow next 20-30 years - Think this is called a living pension, rather than moving to conservative funds/treasury/cash etc - Obviously Private Pension pot can be inherited (As a pension to keep away from tax )

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On 8/23/2019 at 12:15 PM, euan2020 said:

Pensions been bouncing around a lot this last 2 weeks with Trump/China/Brexit etc

Mine is up 48% from Investment 3 years ago, when i consolidated my Pensions, but down 4% from what is was 2 weeks ago - 23% for the YTD

I am likely too much into Equity  

 

was taking a look - now up 54% from investment 3.5 years ago - but at October was sitting around 44% so roller coaster of growth and negative growth - I think as a 49 year old i am invested for 30 years - not going to conservative choices/options such as treasury/gilts/cash/bonds

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Covid been rough ride

Down 25% since March, and has now recovered back above that value 

I also bought some more Scottish Mortgage Trust - but outside Pension as simple share purchase - up 66% since Feb 19 (think they have grown 700% in 10 years if memory serves me correctly)  

 

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