I'm 30 with no pension...
Discussion
drainbrain said:
....the poor working man.
Think you have dramatically wandered off the original topic here - I don't think anyone would argue that Mr Average is probably screwed either way - a struggle to create a suitable pension pot but to be fair also not much chance of finding any Magic Beans.The OP is however not Mr Average - he's 30 (below average), on 40K (above average) with time to spare.
A slightly different scenario to the one you present
Bob
fat80b said:
Think you have dramatically wandered off the original topic here - I don't think anyone would argue that Mr Average is probably screwed either way - a struggle to create a suitable pension pot but to be fair also not much chance of finding any Magic Beans.
The OP is however not Mr Average - he's 30 (below average), on 40K (above average) with time to spare.
A slightly different scenario to the one you present
Bob
Indeed - at no point has anyone suggested that a DC pension is the most appropriate retirement solution for someone with zero day-to-day disposable income!!The OP is however not Mr Average - he's 30 (below average), on 40K (above average) with time to spare.
A slightly different scenario to the one you present
Bob
Hainey said:
The private bank using, multi millionaire before he'd drawn his first breath, George Gideon Oliver Osbornes contempt for the middle classes was both obvious and well known, not least to his biographer (whose name escapes me) but that's a moot point. Labour under Brown loved nothing more than to suck the cream off the pension pots of the middle class.
Just wait until labour get a crack at it from office in 15 years time.
Oh that was all George Osborne was it? That's OK then, I'll just ignore all the continued rumblings about how the current government is still looking very closely at pensions tax relief - I'm sure there will be no changes while the Tories are in power. And re Gordon Brown - again I agree that his abolition of dividend tax relief for pension schemes (I presume that's what you're getting at), was a bad move. The Tories obviously agreed too since they reversed the policy soon after coming into office. Except of course they didn't, so if Labour were 'sucking the cream', then the Tories are doing exactly the same. I suppose they have only been in power for seven years though, I expect they'll get round to sorting it any minute now.Just wait until labour get a crack at it from office in 15 years time.
To be clear - I ain't no Labourite. I'm trying to make the point that when it comes to ballsing up the pensions system both the main parties are as bad as each other, and they've a long track record (Finance Act 1986 and DB scheme contributions holidays anyone?).
Roger Irrelevant said:
Oh that was all George Osborne was it? That's OK then, I'll just ignore all the continued rumblings about how the current government is still looking very closely at pensions tax relief - I'm sure there will be no changes while the Tories are in power. And re Gordon Brown - again I agree that his abolition of dividend tax relief for pension schemes (I presume that's what you're getting at), was a bad move. The Tories obviously agreed too since they reversed the policy soon after coming into office. Except of course they didn't, so if Labour were 'sucking the cream', then the Tories are doing exactly the same. I suppose they have only been in power for seven years though, I expect they'll get round to sorting it any minute now.
To be clear - I ain't no Labourite. I'm trying to make the point that when it comes to ballsing up the pensions system both the main parties are as bad as each other, and they've a long track record (Finance Act 1986 and DB scheme contributions holidays anyone?).
The problem is reversing a policy which commenced in 1999 has grown legs and is now a vast tax revenue for the govt. To be clear - I ain't no Labourite. I'm trying to make the point that when it comes to ballsing up the pensions system both the main parties are as bad as each other, and they've a long track record (Finance Act 1986 and DB scheme contributions holidays anyone?).
To reverse it fine. It what do you put up to mitigate its tax revenue loss?
This is the same issue with fiscal drag on income tax tiers and stamp duty tiers not moving them every year it grows legs and then they cannot or ignore it until its such a clusterf
k a reset is required and someone loses out hugely. 
fat80b said:
Think you have dramatically wandered off the original topic here - I don't think anyone would argue that Mr Average is probably screwed either way - a struggle to create a suitable pension pot but to be fair also not much chance of finding any Magic Beans.
The OP is however not Mr Average - he's 30 (below average), on 40K (above average) with time to spare.
A slightly different scenario to the one you present
Bob
I'm even more confused now than I was whilst writing the original post, haha!The OP is however not Mr Average - he's 30 (below average), on 40K (above average) with time to spare.
A slightly different scenario to the one you present
Bob
Can anyone provide any specific advice relating to my position?
Dan
Question
How many years until the mortgage is cleared?
What is the mortgage interest rate is it fixed ifso when does that expire?
Is the company scheme merely up to a matched 3% employer?
Does the company pension scheme come with life insurance/death in service benefits
Is the wife at Threshold 1/management points? how many years has she banked?
Assume you've checked the state pension years contributions no missing years.
The 40% pension relief MIGHT be removed at some point in the future - thing is it's the wrong message from the govt don't save for the future instead more reliance on state pension or hold as is. It's hard to know what to do here
If you want a defined contribution pension to pay out 2/3rds of final salary you need to be paying in a combined you plus employer 40%, if you want similar to career average pension then you should be thinking around a 24% annual payment into the fund.
If it was me I'd be paying in 3% as that's the max which is matched at the very least and then play out the pay off house idea. Or buy a buy to let and use that plus this matched 3% company pension as a long term option.
How many years until the mortgage is cleared?
What is the mortgage interest rate is it fixed ifso when does that expire?
Is the company scheme merely up to a matched 3% employer?
Does the company pension scheme come with life insurance/death in service benefits
Is the wife at Threshold 1/management points? how many years has she banked?
Assume you've checked the state pension years contributions no missing years.
The 40% pension relief MIGHT be removed at some point in the future - thing is it's the wrong message from the govt don't save for the future instead more reliance on state pension or hold as is. It's hard to know what to do here
If you want a defined contribution pension to pay out 2/3rds of final salary you need to be paying in a combined you plus employer 40%, if you want similar to career average pension then you should be thinking around a 24% annual payment into the fund.
If it was me I'd be paying in 3% as that's the max which is matched at the very least and then play out the pay off house idea. Or buy a buy to let and use that plus this matched 3% company pension as a long term option.
Welshbeef said:
Question
How many years until the mortgage is cleared?
What is the mortgage interest rate is it fixed ifso when does that expire?
Is the company scheme merely up to a matched 3% employer?
Does the company pension scheme come with life insurance/death in service benefits
Is the wife at Threshold 1/management points? how many years has she banked?
Assume you've checked the state pension years contributions no missing years.
The 40% pension relief MIGHT be removed at some point in the future - thing is it's the wrong message from the govt don't save for the future instead more reliance on state pension or hold as is. It's hard to know what to do here
If you want a defined contribution pension to pay out 2/3rds of final salary you need to be paying in a combined you plus employer 40%, if you want similar to career average pension then you should be thinking around a 24% annual payment into the fund.
If it was me I'd be paying in 3% as that's the max which is matched at the very least and then play out the pay off house idea. Or buy a buy to let and use that plus this matched 3% company pension as a long term option.
30 years until cleared, assuming we don't over pay.How many years until the mortgage is cleared?
What is the mortgage interest rate is it fixed ifso when does that expire?
Is the company scheme merely up to a matched 3% employer?
Does the company pension scheme come with life insurance/death in service benefits
Is the wife at Threshold 1/management points? how many years has she banked?
Assume you've checked the state pension years contributions no missing years.
The 40% pension relief MIGHT be removed at some point in the future - thing is it's the wrong message from the govt don't save for the future instead more reliance on state pension or hold as is. It's hard to know what to do here
If you want a defined contribution pension to pay out 2/3rds of final salary you need to be paying in a combined you plus employer 40%, if you want similar to career average pension then you should be thinking around a 24% annual payment into the fund.
If it was me I'd be paying in 3% as that's the max which is matched at the very least and then play out the pay off house idea. Or buy a buy to let and use that plus this matched 3% company pension as a long term option.
Fixed for a further 4 1/2 years at 2.59%.
Company scheme is following their basic obligation, and currently contributing 1% of gross salary.
No other benefit offered
Unsure what you mean by 'Threshold 1/management points'. Shes almost management level (head of year). Been teaching for c. 10 years.
I haven't checked, but payed since day dot (including Class 2) for a long period of self employment. (I ought to check however)
dan_almond said:
30 years until cleared, assuming we don't over pay.
Fixed for a further 4 1/2 years at 2.59%.
Company scheme is following their basic obligation, and currently contributing 1% of gross salary.
No other benefit offered
Unsure what you mean by 'Threshold 1/management points'. Shes almost management level (head of year). Been teaching for c. 10 years.
I haven't checked, but payed since day dot (including Class 2) for a long period of self employment. (I ought to check however)
Firstly match it to 1% it will cost you £20pcm Fixed for a further 4 1/2 years at 2.59%.
Company scheme is following their basic obligation, and currently contributing 1% of gross salary.
No other benefit offered
Unsure what you mean by 'Threshold 1/management points'. Shes almost management level (head of year). Been teaching for c. 10 years.
I haven't checked, but payed since day dot (including Class 2) for a long period of self employment. (I ought to check however)
Secondly you don't want a mortgage at 60 - I'd be overpaying that mortgage to the maximum it permits.
How much is the mortgage? It's possible you might have a family at some point which you'd certainly feel a lot more comfortable with a lot more equity in the house than not.
Aim to have the mortgage cleared before 45years of age. Sounds a big ask - infact push for cleared by 40years of age and you'll probably then slip to 45years of age. That's a great place to be.
Imwe cleared our mortgage on our forever home a few years ago - a massive celebration. We're now getting back into debt funding a huge extension on the house. But having that position suddenly weight off shoulders makes a massive difference. We can pay into a pension what we smashed into the mortgage or not but gives us choices.
Welshbeef said:
Firstly match it to 1% it will cost you £20pcm
Secondly you don't want a mortgage at 60 - I'd be overpaying that mortgage to the maximum it permits.
How much is the mortgage? It's possible you might have a family at some point which you'd certainly feel a lot more comfortable with a lot more equity in the house than not.
Aim to have the mortgage cleared before 45years of age. Sounds a big ask - infact push for cleared by 40years of age and you'll probably then slip to 45years of age. That's a great place to be.
Imwe cleared our mortgage on our forever home a few years ago - a massive celebration. We're now getting back into debt funding a huge extension on the house. But having that position suddenly weight off shoulders makes a massive difference. We can pay into a pension what we smashed into the mortgage or not but gives us choices.
Good point re: paying off before 45. Million dollar question then, with £800 to play with, how would you be splitting between mortgage over payments/ISA/workplace pension contributions... N.B. I'm currently matching at 1% until resolved. Secondly you don't want a mortgage at 60 - I'd be overpaying that mortgage to the maximum it permits.
How much is the mortgage? It's possible you might have a family at some point which you'd certainly feel a lot more comfortable with a lot more equity in the house than not.
Aim to have the mortgage cleared before 45years of age. Sounds a big ask - infact push for cleared by 40years of age and you'll probably then slip to 45years of age. That's a great place to be.
Imwe cleared our mortgage on our forever home a few years ago - a massive celebration. We're now getting back into debt funding a huge extension on the house. But having that position suddenly weight off shoulders makes a massive difference. We can pay into a pension what we smashed into the mortgage or not but gives us choices.
dan_almond said:
Good point re: paying off before 45. Million dollar question then, with £800 to play with, how would you be splitting between mortgage over payments/ISA/workplace pension contributions... N.B. I'm currently matching at 1% until resolved.
You may contractually have a max % or value you can pay off the mortgage each year. Check that first
If it's capped and below the £800 max it out and put the rest into ISA
Then come 4.5 years time you could dump 4.5 years difference between £800 and capped value into it.
If it's uncapped & as the Mrs is a teacher so nigh on impossible to be sacked/laid off I'd pay it all in. That's £115.2k over 15 years into the mortgage on top of what you pay in monthly. It will reduce the interest charge you pay and remember sure there are possibly better investments but they come with risk - this is risk free debt reduction. Once you own it outright that feeling really is superb.
I think the phrase is "f
k you money" ie if work goes tits up you can simply get up and walk away from the stress without concern. Welshbeef said:
Easy - like I did.
When 18y.o I started my pension contributions 3% by me 3% by the company.
Time went by different jobs etc but once in a proper job I essentially shared the % of my annual uplift half to net pay half to pension. It's easy to creep it up heck even tiny increases over ten years would mean you are paying in 10% of your salary which might be matched by employer plus the tax rebate.
Let's say a chap on £20k a year ever 1% extra he pays in costs him £13pcm. If he gets it to 10% by 30years old then he has 40years at 20% total pay in and a weighted average of 10% over the first ten years. Doing this he would get a pot of £180k which would pay him £6k annual pension plus £8.6k state pension.
Which is 73% of his GROSS salary not bad at all.
Is it a low all up position - depends, if you earn £100k it's fk all if you earn £12k it's superb.
Remember Defined benefit final salary is 2/3rds max of your final salary
So he starts this at 18 and it ends, what, FIFTY years later??When 18y.o I started my pension contributions 3% by me 3% by the company.
Time went by different jobs etc but once in a proper job I essentially shared the % of my annual uplift half to net pay half to pension. It's easy to creep it up heck even tiny increases over ten years would mean you are paying in 10% of your salary which might be matched by employer plus the tax rebate.
Let's say a chap on £20k a year ever 1% extra he pays in costs him £13pcm. If he gets it to 10% by 30years old then he has 40years at 20% total pay in and a weighted average of 10% over the first ten years. Doing this he would get a pot of £180k which would pay him £6k annual pension plus £8.6k state pension.
Which is 73% of his GROSS salary not bad at all.
Is it a low all up position - depends, if you earn £100k it's f
k all if you earn £12k it's superb. Remember Defined benefit final salary is 2/3rds max of your final salary
And what would the £6k have to be in 50 years time allowing for inflation? And HOW much would the pot have to be to buy it? And how would he fund THAT? And how many db schemes will be around in 50 years? And how did we assume any employers contribution beyond the very bare legal minimum? etc etc etc. if any at all, given our subject might be self employed as so many these days are??
How by ANY standards can you believe £14k supplies a "superb" lifestyle for anyone?
drainbrain said:
How by ANY standards can you believe £14k supplies a "superb" lifestyle for anyone?
It's absolutely tragic how so many people are programmed to expect to downgrade their lifestyle once retired.I want my retirement to be financial-stress free. I want to buy whatever I like, go wherever i like whenever i like.
Not 'survive' on £15k a year...!
drainbrain said:
So he starts this at 18 and it ends, what, FIFTY years later??
And what would the £6k have to be in 50 years time allowing for inflation? And HOW much would the pot have to be to buy it? And how would he fund THAT? And how many db schemes will be around in 50 years? And how did we assume any employers contribution beyond the very bare legal minimum? etc etc etc. if any at all, given our subject might be self employed as so many these days are??
How by ANY standards can you believe £14k supplies a "superb" lifestyle for anyone?
£6k in today's money. And what would the £6k have to be in 50 years time allowing for inflation? And HOW much would the pot have to be to buy it? And how would he fund THAT? And how many db schemes will be around in 50 years? And how did we assume any employers contribution beyond the very bare legal minimum? etc etc etc. if any at all, given our subject might be self employed as so many these days are??
How by ANY standards can you believe £14k supplies a "superb" lifestyle for anyone?
You don't read posts much do you £180k pot as previously stated in today's money.
He would fund that as I said in a previous post by splitting the growth in salary 1% to start each year up to 10% over a 10 year period splitting salary inflation part to him part to his pension job done.
DB scheme in this example he is on a defined contribution scheme.
How many DB schemes will be around in 50 years? None not even public sector.
TheLordJohn said:
drainbrain said:
How by ANY standards can you believe £14k supplies a "superb" lifestyle for anyone?
It's absolutely tragic how so many people are programmed to expect to downgrade their lifestyle once retired.I want my retirement to be financial-stress free. I want to buy whatever I like, go wherever i like whenever i like.
Not 'survive' on £15k a year...!
As a pensioner you don't have to pay mortgage so don't need salary to fund that you don't commute nor have all the other associated work costs so again you don't need to have a salary to fund that.
You want to buy whatever you like and go wherever you like...hmm too much time with Jonny Depp me thinks. Sound like your expecting a retirement paying you MORE than you had when you worked which is an interesting prospect.
If you are 30years old now and facing a ceiling of salary @£22k based on current skills/training might one suggest you actually try to do something about that increase your life chances.
Generally most are married so it's a joint £30k in this example and as it's split income essentially tax free so £2.5k pcm. They pay council tax £250pcm utilities all up £250pcm let's say for monthly grocery shopping for 2 £300.
So you'd have £1,700 pcm for gifts clothing meals out monthly car cost holidays days out. Do you really need more than that? Certainly not and that gives a great retirement standard more is a bonus.
Welshbeef said:
£6k in today's money.
You don't read posts much do you £180k pot as previously stated in today's money.
He would fund that as I said in a previous post by splitting the growth in salary 1% to start each year up to 10% over a 10 year period splitting salary inflation part to him part to his pension job done.
DB scheme in this example he is on a defined contribution scheme.
How many DB schemes will be around in 50 years? None not even public sector.
If you read this link and believe any of it how does it (purporting to be reality) square with your hypothesis which to be no more than fair contains a few imaginative assumptions (which is why it is at such dramatic odds with the reality of what actually happens).You don't read posts much do you £180k pot as previously stated in today's money.
He would fund that as I said in a previous post by splitting the growth in salary 1% to start each year up to 10% over a 10 year period splitting salary inflation part to him part to his pension job done.
DB scheme in this example he is on a defined contribution scheme.
How many DB schemes will be around in 50 years? None not even public sector.
You are aware aren't you that there are millions - yes that is MILLIONS of people - UK adults - who apparently don't have even £100 to their names?
http://moneyfacts.co.uk/news/pensions/uk-pension-p...
drainbrain said:
If you read this link and believe any of it how does it (purporting to be reality) square with your hypothesis which to be no more than fair contains a few imaginative assumptions (which is why it is at such dramatic odds with the reality of what actually happens).
You are aware aren't you that there are millions - yes that is MILLIONS of people - UK adults - who apparently don't have even £100 to their names?
http://moneyfacts.co.uk/news/pensions/uk-pension-p...
And your suggestion for these people is?You are aware aren't you that there are millions - yes that is MILLIONS of people - UK adults - who apparently don't have even £100 to their names?
http://moneyfacts.co.uk/news/pensions/uk-pension-p...
Can't buy any magic beans for £100.
drainbrain said:
If you read this link and believe any of it how does it (purporting to be reality) square with your hypothesis which to be no more than fair contains a few imaginative assumptions (which is why it is at such dramatic odds with the reality of what actually happens).
You are aware aren't you that there are millions - yes that is MILLIONS of people - UK adults - who apparently don't have even £100 to their names?
http://moneyfacts.co.uk/news/pensions/uk-pension-p...
And?You are aware aren't you that there are millions - yes that is MILLIONS of people - UK adults - who apparently don't have even £100 to their names?
http://moneyfacts.co.uk/news/pensions/uk-pension-p...
People make choices be it education be it lifestyle be it spending be it hobbies etc whatever.
All that matters is happiness I'm getting the feeling from some posts you make you assume more £ = happier. Utter rubbish I know wealthy people who are very happy and conversely I know people who earn min wage and a happy. You cannot take it with you.
Personally I find nothing more fun really than a long family walk with the kids. Cost £0.
drainbrain said:
Welshbeef said:
Easy - like I did.
When 18y.o I started my pension contributions 3% by me 3% by the company.
Time went by different jobs etc but once in a proper job I essentially shared the % of my annual uplift half to net pay half to pension. It's easy to creep it up heck even tiny increases over ten years would mean you are paying in 10% of your salary which might be matched by employer plus the tax rebate.
Let's say a chap on £20k a year ever 1% extra he pays in costs him £13pcm. If he gets it to 10% by 30years old then he has 40years at 20% total pay in and a weighted average of 10% over the first ten years. Doing this he would get a pot of £180k which would pay him £6k annual pension plus £8.6k state pension.
Which is 73% of his GROSS salary not bad at all.
Is it a low all up position - depends, if you earn £100k it's fk all if you earn £12k it's superb.
Remember Defined benefit final salary is 2/3rds max of your final salary
So he starts this at 18 and it ends, what, FIFTY years later??When 18y.o I started my pension contributions 3% by me 3% by the company.
Time went by different jobs etc but once in a proper job I essentially shared the % of my annual uplift half to net pay half to pension. It's easy to creep it up heck even tiny increases over ten years would mean you are paying in 10% of your salary which might be matched by employer plus the tax rebate.
Let's say a chap on £20k a year ever 1% extra he pays in costs him £13pcm. If he gets it to 10% by 30years old then he has 40years at 20% total pay in and a weighted average of 10% over the first ten years. Doing this he would get a pot of £180k which would pay him £6k annual pension plus £8.6k state pension.
Which is 73% of his GROSS salary not bad at all.
Is it a low all up position - depends, if you earn £100k it's f
k all if you earn £12k it's superb. Remember Defined benefit final salary is 2/3rds max of your final salary
And what would the £6k have to be in 50 years time allowing for inflation? And HOW much would the pot have to be to buy it? And how would he fund THAT? And how many db schemes will be around in 50 years? And how did we assume any employers contribution beyond the very bare legal minimum? etc etc etc. if any at all, given our subject might be self employed as so many these days are??
How by ANY standards can you believe £14k supplies a "superb" lifestyle for anyone?
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