I'm wasteful with money, need advice and have a goal...

[anonymous-user]

£39 in a pension every month is very little and I think you would be horrified at how little that will generate when you retire.

[Mattt]

gottans said:

£39 in a pension every month is very little and I think you would be horrified at how little that will generate when you retire.

I think a lot of people on low/average ages are going to be shocked at how small their pension pots will be - even after the auto-enrollment schemes and matched contributions.

[anonymous-user]

The OP is earning way over average wage so could easily be putting in 10 times the current contribution without really noticing to have a reasonable pension upon retirement.

Pensions are the one thing that really does worry me..

[thenortherner]

forest07 said:

Sheepshanks said:

thenortherner said:

Chargeable benefits:
Car benefit - £371
Medical insurance/private health care - £62

You could do with clarifying with HR before you meet the accountant, but I reckon they've put the gross BIK values there. It looks spot on for the car and the medical figure is a pretty typical company scheme monthly cost.

Your actual cost is tax at 40% of those figures - so the car is costing you £125/mth. It's not clear whether that's actually being taken or not, as the figures you posted don't add up, but as others have commented, on the face of it you're not paying as your tax code looks wrong.

I reckon the same re the BIK values, so speak to HR & Payroll before paying an accountant.

Thanks for the help so far. Much appreciated.

I've done well to resist spending unnecessarily since I started this thread. I've about £100 to last until the 26th, with all bills paid, other than food.

Apologies for being a bit thick over the comments re. gross BIK etc, but I'm not following... Can you explain it as though I'm 6 years old so I'll understand - and no, that's not me being sarcastic!

Better still, can you let me know exactly what questions I should be asking HR - if I could copy and paste from here it'd be great! I'll defer the meeting with the accountant meanwhile.

A few have said that the numbers on my payslip aren't clear / don't add up, so I scanned a copy to help, obviously with all personal details removed! Here's the link...

[blank]

That all looks correct to me. It's a bit odd that your tax code is normal, rather than reduced for your car and health insurance, but you're paying the tax so I guess it doesn't matter.

Put the numbers in to www.thesalarycalculator.co.uk to check.

Also have a play with pension values and see how much £300 month in to a pension will actually cost you. See if your employer matches contributions too.


You could also check that your additional car payment is reducing the BIL tax as it should. Use www.comcar.co.uk and put in your car details without a personal contribution, and with a personal contribution, and compare to your pay slip value.

Edit:
Actually. It's only £2 so not worth worrying about really. I was looking at the fine!

Edited by blank on Monday 4th January 21:13

[J.R.B.]

They're payrolling the benefits so tax code won't be adjusted to reflect any taxable benefits.

[thenortherner]

Thanks for the replies. Still, I'm even more confused now - seems to be a total split between people saying it's right/wrong.

[e8_pack]

Great thread, really appreciate you sharing your figures.

I was in a very similar situation as you and i might be again soon, i'm not a great saver so some great tips and budget ideas.

I have no idea about pensions, whether i should venture into BTL or whether i need to start a private pension etc. so many friends and family have had stocks and shares and come out with less or lost out when the market tanked in 2008. Saving cash just means it gets eroded by inflation or should i sit on cash and wait for all these BTL rules to force the hand of many private landlords over the next few years and see some housing price drops.

Maybe i should just pay off the mortgage, but the low rates available doesn't make any sense to do so right now.

I don't trust financial advisors as they appear to me to try and sell us profitable products as opposed to making me money, i know this from a few friends who got into that field and felt guilty selling some of them.

I've saved a bit over the past 5 years by working overseas, however, i might end up back in the UK soon on normal wages and paying tax so all this tax efficient stuff is interesting as BTL clearly isn't. Though right now i am 100% tax efficient with no living costs - just no life.

So looking forward to a life back in the UK at some point, not looking forward to less wages and paying tax but i will hopefully do something smart with the cash i've ended up with (What ever that might be) and make tax efficient choices the minute i get back. This thread helps so thanks!

[johnwilliams77]

Wow, e8, our circumstances are remarkably similar. I have done it and came back to the UK. Having a life is much better. Life is also a bit easier with a bigger slush fund...

[GTIAlex]

AyBee said:

thenortherner said:

Thanks for the advice everyone.

Applied for 2 ISAs yesterday, having had a look at the government supported first time buyer one and decided I'd go for it. I can tip in £200 there and take it out without any penalty etc. I'm also allowed another ISA to run at the same time, so applied for a separate one too.

What are the rates on your ISA? I opened up a Halifax HtB ISA last week - 4% (no tax) and then 25% extra when you buy seems like a bit of a no-brainer if you're looking to buy at some point in the future. Set up a standing order for £200 to go out the day after payday and forget about it I'd then look at something like the Classic Plus from TSB which pays 5% (pre-tax) on balances up to £2000 or the Sandander 123 at 3% (pre-tax). You have to stick £500 in to those two accounts each month but you can set up £500 to cycle through them, i.e. pay £500 into TSB and then £200 out of that into a HtB ISA.

Best of luck

I'm in a similar situation and after research over Christmas this is exactly what I did. Seems the best combination currently.

[JapanRed]

I've not had time to read all of the above posts so apologies if I'm duplicating anything.
1) It might work out cheaper to buy a car yourself (with savings), rather than on the lease scheme.
2) I'm the same age as you and wouldn't pay for private healthcare. You are HIGHLY unlikely to use it, especially at your age. If you do need healthcare, the NHS is free and very good.
3) If you are worried your payslips are wrong in any way go see a local accountant. It will probably cost less than £100 and could potentially save you thousands.

Rob

[oyster]

gottans said:

The OP is earning way over average wage so could easily be putting in 10 times the current contribution without really noticing to have a reasonable pension upon retirement.

Pensions are the one thing that really does worry me..

Pensions are only of real use if you contribute any income above the 40% tax threshold.

What's the point saving 20% tax, only to have to pay 20% tax when you receive your pension?

[anonymous-user]

oyster said:

Pensions are only of real use if you contribute any income above the 40% tax threshold.

What's the point saving 20% tax, only to have to pay 20% tax when you receive your pension?

Agree if the employer doesn't make a contribution - but if it does it pays to put in what ever it takes to get the max employer contribution - it's free money.

Also, as it's a pension you can't access it until you hit pension age so I wouldn't stress over stock market crashes and paper losses until 30 years later when it's time to start cashing in. The long term trend of the stock market is up - drip feeding is the way.

The only time to reassess is when the Government opts to slash tax relief on contributions and going by the rumours, George Osborne wants it to happen sometime soon.