shirokazan
Veteran
Makes a refreshing change from the usual "rental properties".
My work pension scheme.
- Thread starter MontyVeda
- Start date
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Makes a refreshing change from the usual "rental properties".
DCLane
Found in the Yorkshire hills ...
- Location
- Dewsbury, West Yorkshire
Buying property to rent would probably have been more profitable. I just didn't need the hassle accompanying them and, having moved round the UK plus not originally intending to stay in the UK beyond 1995, it didn't make sense at the time. In 2020 I'm still here!
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shirokazan
Veteran
I wouldnt' do rental properties, not domestic anyway - doesn't fit with my ethics. As for your original plans...I had similar 1990s too.
Drago
Legendary Member
- Location
- Suburban Poshshire
If I didn't rent out a place then the lady that lives in it would not only be homeless, she'd quite likely have to leave the island in order to be able to afford somewhere else. It's a good thing I have no ethics.
neil_merseyside
Guru
- Location
- Wirral
Well if it's not costing much then it isn't so bad, you can probably make Additional Voluntary Contributions so it builds up to a better return. and if the company is paying all the fees then any contribution will go straight into the pot (and tax man puts in a good whack too).
You need proper advice, a lot has changed in pensions relatively recently, and don't bank on a state pension - lots of people have had their state retirement deferred, I'm on a 'delay' from the traditional 65, some ladies pensions are 6 years later than 'back in the day'.
My private pension and my state pension should be enough - we'll see...
DCLane
Found in the Yorkshire hills ...
- Location
- Dewsbury, West Yorkshire
Agreed. I'm hoping the government don't make them means-tested, which would cause issues. A sure-fire vote loser no party seems willing to try it ... yet.
I was given some advice by a financial consultant 25 years ago when I started 'proper' work that said don't count on any state pension when I retire. This was before a worldwide pandemic that will create a recession/slump like nothing seen before plus our local issue of Brexit, I honestly don't see how when I come to retire the state will be giving me any pension at all. I have been fairly fortunate in my career lived reasonably frugally and have been pumping a very large percentage of my salary into my pension in anticipation of this, my worry is that I will get further penalised when I come to draw down on my pension at retirement, which I have not accounted for.
Drago
Legendary Member
- Location
- Suburban Poshshire
Just as an aside, without wishing to seem nosey, what sort of monthly contributions do you good folks put into your pensions?
figbat
Slippery scientist
- Location
- South Oxfordshire, UK
At the risk of sounding boastful, I joined a multi-national company in the early 90s and immediately joined their final salary pension scheme. At the time it was non-contributory for a 1/55th accrual rate, but subsequently it was changed to being a 10%-of-salary contribution, although any existing members at the time of this change only had to pay 10% of any pay rise received since the amendment. This company was then acquired by a much larger multi-national with a similar pension scheme - over time the various pension schemes have been combined meaning that currently I pay 5% of my salary for a 1/54th accrual rate. This is a voluntary payment - I could choose to make no payment for a 1/60th accrual. The scheme has a normal retirement age of 60 with an early retirement option from 55. Unsurprisingly it has been closed to new members from some time now.
For the last few years I have been stuffing in over 2.7K monthly between mine and my employers contribution. This is more than double than ever before, although I have always put in enough to get the highest matching that my company offered. The reason I ramped it up a few years ago was partly because I did pretty well out of some stock options which meant I was not reliant on all my salary for day to day living and as a way of trying to reduce my tax liabilities. This is likely to be short term as I am worried about my job and then in a covid world getting a new one, so I will start to take more as cash to squirrel away somewhere more accessible.
Just a word of caution on annual income forecasts from Defined Contribution pensions, the annual figure they calculate is deliberately conservative as pension companies got their hands slapped for over egging the income expectations a few years ago.
Also, these forecasts are based on you buying an annuity, almost nobody does that these days as the returns are so low. Most seem to be going the drawdown route on their pot, the safe withdrawal (SWR) figure changes depending on what article you read but you often read of figures around 4% as the SWR. So if you had £100,000 in your pot, you could take £4000 out a year and possibly not diminish the value of the pot (this includes inflation at 1.5% or so).
I've now stoked a hornets nest and someone will come along to rubbish my figures, that's fine, but the basics are about right.
Also, these forecasts are based on you buying an annuity, almost nobody does that these days as the returns are so low. Most seem to be going the drawdown route on their pot, the safe withdrawal (SWR) figure changes depending on what article you read but you often read of figures around 4% as the SWR. So if you had £100,000 in your pot, you could take £4000 out a year and possibly not diminish the value of the pot (this includes inflation at 1.5% or so).
I've now stoked a hornets nest and someone will come along to rubbish my figures, that's fine, but the basics are about right.
Electric_Andy
Heavy Metal Fan
- Location
- Plymouth
I'm on an NHS pension, I pay in £160/month. I have absolutely no idea what it all means. I started on the 2008 scheme and then was moved to the 2015 scheme in 2015. It says:
2008 scheme: Pension = £2368. lump sum £0 But then goes on to say that if I take the maximum lump sum (at 65) of £10k, my pension will be £1522 - I'm guessing that's in total, so £152/year for 10 years?
2015 scheme: pension = £1698. Then says if I tale the lump sum (£7k) there will be a pension of £1k.
I asked the pensions department to explain but they weren't able to. I will have to go in and have a face-to-face with someone and thet them to explain it to me. I have no idea if the two schemes are combined, or if I have to choose one or the other.
Anyway, I hope to retire at 55 which I htink is the earliest you can do it from. That's still 16 years off. As long as I get 80% of what I paid in, in some way or another, I'll be happy. And I mean the literal amount, not adjusted for inflation
2008 scheme: Pension = £2368. lump sum £0 But then goes on to say that if I take the maximum lump sum (at 65) of £10k, my pension will be £1522 - I'm guessing that's in total, so £152/year for 10 years?
2015 scheme: pension = £1698. Then says if I tale the lump sum (£7k) there will be a pension of £1k.
I asked the pensions department to explain but they weren't able to. I will have to go in and have a face-to-face with someone and thet them to explain it to me. I have no idea if the two schemes are combined, or if I have to choose one or the other.
Anyway, I hope to retire at 55 which I htink is the earliest you can do it from. That's still 16 years off. As long as I get 80% of what I paid in, in some way or another, I'll be happy. And I mean the literal amount, not adjusted for inflation
I think it means £2368 per year on retirement. If you take a bigger lump sum, the annual figure is reduced down to £1522 accordingly.
Edit to correct mistake
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DCLane
Found in the Yorkshire hills ...
- Location
- Dewsbury, West Yorkshire
I'm on the Teacher's Pension and put in over £6000 a year - it's a defined rate based on salary. I've bought extra years/made additional contributions to enhance it when I had the cash some time ago.
