How much money do you need for retirement/pension?
Discussion
zubzob said:
Is it 55? I thought it was 57, but I just did the HMRC check your pension age form, and now it's telling my 68, which I presume means 58!
Jeez. If it's changing all the time, whats to stop it being 80? Or is it locked after a certain point?
If it wasn't useful for nerfing corporation tax, I don't think I'd bother with a SIPP at all.
Why does it keep moving? Clearly a private pension pot is what it is - if you go early you take less per year. Jeez. If it's changing all the time, whats to stop it being 80? Or is it locked after a certain point?
If it wasn't useful for nerfing corporation tax, I don't think I'd bother with a SIPP at all.
Why force people to work longer (they may want to stop working earlier due to family health history or whatever reason). It removes the benefit of investing into a pension.
Welshbeef said:
zubzob said:
Is it 55? I thought it was 57, but I just did the HMRC check your pension age form, and now it's telling my 68, which I presume means 58!
Jeez. If it's changing all the time, whats to stop it being 80? Or is it locked after a certain point?
If it wasn't useful for nerfing corporation tax, I don't think I'd bother with a SIPP at all.
Why does it keep moving? Clearly a private pension pot is what it is - if you go early you take less per year. Jeez. If it's changing all the time, whats to stop it being 80? Or is it locked after a certain point?
If it wasn't useful for nerfing corporation tax, I don't think I'd bother with a SIPP at all.
Why force people to work longer (they may want to stop working earlier due to family health history or whatever reason). It removes the benefit of investing into a pension.
JulianPH said:
On a serious note though, that is exactly the point. I love what I do. Retiring would mean stopping doing what I love.
If you don't love what you do it is possible to retire early on the same money, providing you make the lifestyle choices that support this.
Very much depends on the profession too I guess. In my sector/field (Architecture), 55-65 usually most architects/developers start to get more jobs or works due to their experience. I do have loads of colleagues (senior or mid level) around 65 years old and I do not think they would retire anytime soon. It's just the nature of the profession though, it does take ages to finish/study and later needs years of experience on site and office. Same even with academic side of it.If you don't love what you do it is possible to retire early on the same money, providing you make the lifestyle choices that support this.
Oscar Niemeyer (Architect) died at 105, and he was still active. Not to mention, Lord Foster is still quite active (83).. They might be the extreme examples, but I think most of them do work until 70-75 as long as they are healthy.
soupdragon1 said:
I thought the early retirement bit was fixed by the pension provider, rather than the government? For example, my closed FS pension states 55 so as far as I'm concerned, that's locked in. The only movement the govt can make is on the state pension. I'm not sure though, just my understanding.
Nope, when I started my PP all forms was fo retirement at 50 then the government changed it to 55 and I am now worried that they may put it to 10 years before state pension age which would be 58.Barga said:
Nope, when I started my PP all forms was fo retirement at 50 then the government changed it to 55 and I am now worried that they may put it to 10 years before state pension age which would be 58.
I had a Google and found this. Doesn't necessarily mean the govt can't intervene, but it sort of implies it's down to the actual pension provider?https://www.gov.uk/early-retirement-pension/person...
Pension legislation is a moving target....you just cannot rely on anything staying “as is”....that’s why you need diversity in your retirement planning. ISA’s are the obvious one. In the last twenty years there have been massive changes to the pensions framework, started with Brown removing the dividend tax relief and who knows where it will end.
Personally I think politicians of all parties are storing up trouble for the future as people will have to rely on social welfare/state services more than there own pension but the politicians responsible will be long gone.
Personally I think politicians of all parties are storing up trouble for the future as people will have to rely on social welfare/state services more than there own pension but the politicians responsible will be long gone.
Welshbeef said:
It removes the benefit of investing into a pension.
No it doesn’t. The benefit of a pension is the tax advantages it offers. That does not change.If you want to retire earlier, you don’t have to rely on a pension. ISA (stocks and shares) will give you tax free returns that you can access whenever you like for example.
If you want to retire early you have to look at all options and get the right mix that will work for you.
The government say when you can draw your SIPP not the pension provider. Its currently 55. Your pension provider can not move this age if they wanted too.
Plans have been put forward to increase this age to keep it 10 years behind SPA.
These plans have yet to be passed into law and its at least a couple of years now since it was proposed.
I am planning for 58.
If its still 55 by the time I get there then great, if not I have money to cover the 3 year difference. If they push it to 60 or beyond I will have a problem!
Plans have been put forward to increase this age to keep it 10 years behind SPA.
These plans have yet to be passed into law and its at least a couple of years now since it was proposed.
I am planning for 58.
If its still 55 by the time I get there then great, if not I have money to cover the 3 year difference. If they push it to 60 or beyond I will have a problem!
Just checked it was 2014 when the plans were first suggested. The plan said it should be SPA -10yr from 2028.
Obviously we are 4 years down the road now so one would presume that pushes it back to 2032... maybe.
I would have thought for such a big change they would have to give at least 10-15 years notice. I think anyone born from 1975 to 1985 are in the danger zone. I am in that zone!
IMHO.
Obviously we are 4 years down the road now so one would presume that pushes it back to 2032... maybe.
I would have thought for such a big change they would have to give at least 10-15 years notice. I think anyone born from 1975 to 1985 are in the danger zone. I am in that zone!
IMHO.
garyhun said:
Welshbeef said:
It removes the benefit of investing into a pension.
No it doesn’t. The benefit of a pension is the tax advantages it offers. That does not change.If you want to retire earlier, you don’t have to rely on a pension. ISA (stocks and shares) will give you tax free returns that you can access whenever you like for example.
If you want to retire early you have to look at all options and get the right mix that will work for you.
Imagine McDonnell coming into Govt and changing he rules stating personal pensions cannot be drawn until they are equal to the state pension age
Who’s to say the tax free wrapper will not be removed from IsAs and not just future but historic.
What’s to say all pension tax wrappers are removed and higher NI to for e a bigger state pension or more £ to NHS etc.
Nothing is guaranteed.
What happens if too many pension schemes go bust/need to rely on the pensions fund to cover it off... at some point everyone will have to take a massive hair cut.
You cannot rely on cash either as there simply are not enough banks in the U.K. where the £85k safety net applies
Who’s to say the govt will not take funds out of dormant accounts - G Brown mentioned it before so many accounts not touched for decades no correspondence nothing so why not put it into Govt coffers.....
Welshbeef said:
garyhun said:
Welshbeef said:
It removes the benefit of investing into a pension.
No it doesn’t. The benefit of a pension is the tax advantages it offers. That does not change.If you want to retire earlier, you don’t have to rely on a pension. ISA (stocks and shares) will give you tax free returns that you can access whenever you like for example.
If you want to retire early you have to look at all options and get the right mix that will work for you.
Imagine McDonnell coming into Govt and changing he rules stating personal pensions cannot be drawn until they are equal to the state pension age
Who’s to say the tax free wrapper will not be removed from IsAs and not just future but historic.
What’s to say all pension tax wrappers are removed and higher NI to for e a bigger state pension or more £ to NHS etc.
Nothing is guaranteed.
What happens if too many pension schemes go bust/need to rely on the pensions fund to cover it off... at some point everyone will have to take a massive hair cut.
You cannot rely on cash either as there simply are not enough banks in the U.K. where the £85k safety net applies
Who’s to say the govt will not take funds out of dormant accounts - G Brown mentioned it before so many accounts not touched for decades no correspondence nothing so why not put it into Govt coffers.....
garyhun said:
Barga said:
Welshbeef said:
Is returning at 45yo possible for the average person?
Potentially 25 year mortgage cleared (commenced at 20yo).
Or would it be exceptionally difficult for all but the few who are lucky and those who take big risks.
Note when I say average I mean that is with having children....
I don't think you can access a PP until 55.Potentially 25 year mortgage cleared (commenced at 20yo).
Or would it be exceptionally difficult for all but the few who are lucky and those who take big risks.
Note when I say average I mean that is with having children....
SO.......assuming a person is self employed, the only benefit really is the tax situation (and NI)
the money is tied up until 55 though............
I don't see a good reason to pick a pension over say leaving the money in the Ltd company and having access whenever required (apart from a slightly) better interest rate.
That could be achieved with buying property though surely?
Does not work like that pension from a LTD comes pre tax.
So if you are on target to make £40k profit you can put £40k into your SIPP and then make £0 profit and turn the £40k into £48k overnight (or more if you are HR tax payer). No corp tax, no NI, no tax.
In fact to be specific it does not even have to come out of profits. So a business making a loss can still pay into a SIPP. You cant pay DIVs if you are making a loss.
Or that's my understanding of it anyway.
If you leave the £40k in the LTD you pay corporation tax on that and then possibly personal tax when you take it out unless you can drip feed it out at 11k a year or whatever.
So if you are on target to make £40k profit you can put £40k into your SIPP and then make £0 profit and turn the £40k into £48k overnight (or more if you are HR tax payer). No corp tax, no NI, no tax.
In fact to be specific it does not even have to come out of profits. So a business making a loss can still pay into a SIPP. You cant pay DIVs if you are making a loss.
Or that's my understanding of it anyway.
If you leave the £40k in the LTD you pay corporation tax on that and then possibly personal tax when you take it out unless you can drip feed it out at 11k a year or whatever.
it really is a good tax incentive to pension that 40k........I understand that.
I guess it's then just tied up until 55 - so only do it when it's a 'spare' 40k or whatever amount.
plus obviously more downside - if you take it out, you pay the actual person tax on it too.
really interesting thank you
I guess it's then just tied up until 55 - so only do it when it's a 'spare' 40k or whatever amount.
plus obviously more downside - if you take it out, you pay the actual person tax on it too.
really interesting thank you
red_slr said:
Does not work like that pension from a LTD comes pre tax.
So if you are on target to make £40k profit you can put £40k into your SIPP and then make £0 profit and turn the £40k into £48k overnight (or more if you are HR tax payer). No corp tax, no NI, no tax.
In fact to be specific it does not even have to come out of profits. So a business making a loss can still pay into a SIPP. You cant pay DIVs if you are making a loss.
Or that's my understanding of it anyway.
If you leave the £40k in the LTD you pay corporation tax on that and then possibly personal tax when you take it out unless you can drip feed it out at 11k a year or whatever.
I think you will find you have just doubled up on the tax relief! So if you are on target to make £40k profit you can put £40k into your SIPP and then make £0 profit and turn the £40k into £48k overnight (or more if you are HR tax payer). No corp tax, no NI, no tax.
In fact to be specific it does not even have to come out of profits. So a business making a loss can still pay into a SIPP. You cant pay DIVs if you are making a loss.
Or that's my understanding of it anyway.
If you leave the £40k in the LTD you pay corporation tax on that and then possibly personal tax when you take it out unless you can drip feed it out at 11k a year or whatever.
Welshbeef said:
It doeschange things and Male it less attractive
Imagine McDonnell coming into Govt and changing he rules stating personal pensions cannot be drawn until they are equal to the state pension age
Who’s to say the tax free wrapper will not be removed from IsAs and not just future but historic.
What’s to say all pension tax wrappers are removed and higher NI to for e a bigger state pension or more £ to NHS etc.
Nothing is guaranteed.
What happens if too many pension schemes go bust/need to rely on the pensions fund to cover it off... at some point everyone will have to take a massive hair cut.
You cannot rely on cash either as there simply are not enough banks in the U.K. where the £85k safety net applies
Who’s to say the govt will not take funds out of dormant accounts - G Brown mentioned it before so many accounts not touched for decades no correspondence nothing so why not put it into Govt coffers.....
I guess you're not the 'glass half full' type then? Imagine McDonnell coming into Govt and changing he rules stating personal pensions cannot be drawn until they are equal to the state pension age
Who’s to say the tax free wrapper will not be removed from IsAs and not just future but historic.
What’s to say all pension tax wrappers are removed and higher NI to for e a bigger state pension or more £ to NHS etc.
Nothing is guaranteed.
What happens if too many pension schemes go bust/need to rely on the pensions fund to cover it off... at some point everyone will have to take a massive hair cut.
You cannot rely on cash either as there simply are not enough banks in the U.K. where the £85k safety net applies
Who’s to say the govt will not take funds out of dormant accounts - G Brown mentioned it before so many accounts not touched for decades no correspondence nothing so why not put it into Govt coffers.....
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