No Pension - 25, Gov looking to increase SPA to 75 HELP!!

[95JO]

Croutons said:

You really couldn't google https://www.civilservicepensionscheme.org.uk ?

It's going to pay out at state pension age, unless you want to take a hit for every one of the 8 (or 15!) years between age 60 and that.

I did end up checking this - However, before asking the question I could find a location on there to illustrate it... Now I need to find my last statement from them to work it out

[emicen]

Worth mentioning (not so much to the OP, but in general) if your company provides the facility to use salary sacrifice, that’s really useful.

No faffing about with tax returns to reclaim additional 20%.

Fonzey said:

BGarside said:

I love reading about these pension projections which are based on 7% annual growth, when over the last 2 years with Hargreaves-Lansdown my investments have made 0%. It feels as though all the money I save just disappears into a black hole.

Glad it's not just me, I'm a newbie I accept - but after 2 years my SIPP has failed to recoup the initial fee costs - so I'm currently down a couple hundred quid over two years. It peaked at about +5% growth earlier this year, which almost got me excited.

Can you give us an order of magnitude on fees and amount put in?

I have a pot from my last employer which hasn’t been paid in to since July/August-16, over the past 2 years (Aug-17 to Aug-19) its up 8.5%

Sure, there’s been ups and downs, it’s been a lot higher, but you must have had to swallow a decent sized fee to end up flat after 2 years.

Over just the one year, August-18 to August-19, that would be more understandable, I’m barely back in Black on that period also.

[95JO]

95JO said:

I did end up checking this - However, before asking the question I could find a location on there to illustrate it... Now I need to find my last statement from them to work it out

Some fag packet maths on it, looks like I'll be getting ~£2.4k per annum at state pension age based on 2.32% of my average earnings for those 3.5 years (Linked to inflation)

Nice, considering... However, the thought of taking that at 68 is pretty disgusting

Edited by 95JO on Thursday 22 August 12:19

[Fonzey]

emicen said:

Can you give us an order of magnitude on fees and amount put in?

I have a pot from my last employer which hasn’t been paid in to since July/August-16, over the past 2 years (Aug-17 to Aug-19) its up 8.5%

Sure, there’s been ups and downs, it’s been a lot higher, but you must have had to swallow a decent sized fee to end up flat after 2 years.

Over just the one year, August-18 to August-19, that would be more understandable, I’m barely back in Black on that period also.

Sure, put £20k in 2018 and £20k in 2019.

According to the web portal I have for it the current total value is £39.6k, total charges are just under £1.5k and the investment gains are around £1k, with £25 gross interest and £50 dividends gain.

Lowest it's been is £17.4k in 2018 and highest is £40,605 earlier this year.

I'm a real noob with all of this, really just following the lead of my business partner as we wanted to save some corporation tax (which we obviously did), but I'm not sure what I should be expecting in two years (if anything?).


Edited: Corrected years, so technically only 18months in.

Edited by Fonzey on Thursday 22 August 12:25

Edited by Fonzey on Thursday 22 August 12:25

[Croutons]

Fonzey said:

total charges are just under £1.5k and the investment gains are around £1k, with £25 gross interest and £50 dividends gain.

So you managed to gain 2.5k and give most of it to the red-faced Billionaires?

It's no wonder they look so well fed, dining out on your money FOREVER MORE.

[Fonzey]

Croutons said:

So you managed to gain 2.5k and give most of it to the red-faced Billionaires?

It's no wonder they look so well fed, dining out on your money FOREVER MORE.

No, gained 1.2k and gave ALL of it to them

[BGarside]

putonghua73 said:

Congratulations! You have £503k in the pension pot. If you use a heuristic and assume 4% draw-down p/a over 30 years, you are looking at a £20,120 p/a income. I'd recommend a read of the Credit Suisse report on investment returns for 2018 (provides a look at the long-term asset return rate across various asset classes, time periods and countries). I'd also recommend reading 'Beyond 4% Rule' which discusses retirement planning in terms of risk profile and scenario based using historical data, and provides easy to understand projections of withdrawal rates based upon a 30 year period of different growth rates.

As Derek is fond - and quite right - to mention, the most significant period is the return of the 1st 10 years following retirement. This period has a dispproprionate affect on one's pension pot lasting them 30 years+. Hence, if you have the flexibility to stave retirement for a few years if you are about to retire in a period of a prolonged recession, then either hold off retirement for a few years (if possible) or have sufficient cash not to dip into your pension pot. The Dow ended 2008 almost 34% down - if you factor your investment pot down that percentage, plus whatever % that you withdraw, you have a lot less money to grow and a lot less time for your pot to recover, especially as you will be in your deaccumulation [withdrawal] period.

What is your investment vehicle with H&L that has provided 0% return over the last 24 months!?

Edited by putonghua73 on Wednesday 21st August 17:38

Thanks for the useful links. It's not entirely all pension funding though as I don't own my own home so technically would need to use £200k-odd to buy one, though in the longer term I'm in line to inherit the family home (currently £360k) which will cover housing costs assuming I don't retire to an expensive property area.

The cash was invested with H-L in the Portfolio Management Scheme from 2012 - 2018, mostly in various of their multi-manager funds. I switched out of this into the 'Portfolio+' service to reduce fees slightly, but the cash was still invested in their funds. Most aiming at balanced growth. Stuck £65k of spare cash in between 2017 and 2019 but portfolio made no money (deducting value of top-ups) between October 2017 and June 2019.

[Mr Pointy]

BGarside said:

Thanks for the useful links. It's not entirely all pension funding though as I don't own my own home so technically would need to use £200k-odd to buy one, though in the longer term I'm in line to inherit the family home (currently £360k) which will cover housing costs assuming I don't retire to an expensive property area.

The cash was invested with H-L in the Portfolio Management Scheme from 2012 - 2018, mostly in various of their multi-manager funds. I switched out of this into the 'Portfolio+' service to reduce fees slightly, but the cash was still invested in their funds. Most aiming at balanced growth. Stuck £65k of spare cash in between 2017 and 2019 but portfolio made no money (deducting value of top-ups) between October 2017 and June 2019.

If you're in the multi-manager funds you're paying pretty large fees from 1.27% to 1.59%. Add on the 0.45% platform fee & you're paying 1.72% to 2.04%. With those numbers you're entitled to ask why they aren't making you 8-10%, especially over the last two years which have been pretty rewarding.

I remember now why I dumped the MM funds as soon as I did the maths.

[BGarside]

Looking at things in more detail, my H-L portfolio actually fell 2.7% in 2018. Perhaps most of that was due to their fees....

Have since switched my SIPP to Intelligent Money (tracker-based, as per sticky thread here) and the rest to Investec via a local IFA. Fees are obviously higher for the IFA/Investec route (around 2% I think), so will be aiming to see which approach performs best, and possibly then focus on that.

[Jackals]

BGarside said:

Looking at things in more detail, my H-L portfolio actually fell 2.7% in 2018. Perhaps most of that was due to their fees....

Have since switched my SIPP to Intelligent Money (tracker-based, as per sticky thread here) and the rest to Investec via a local IFA. Fees are obviously higher for the IFA/Investec route (around 2% I think), so will be aiming to see which approach performs best, and possibly then focus on that.

I'm assuming you're comparing like for like service? IMs service with our MPS rather than the DFM approach? DFM fees will obviously be a lot higher.

[Mazinbrum]

The Leaper said:

So, if you think £30,000 pa is more than enough to live on after retirement, taking off the new State Basic Pension of about £8700 means that you need to have about £22,000 private pension.

£30,000 pa will reduce to about £26,500 pa after tax, say £510 pw. Do you think that this is "more than enough"? From my experience I'd say that it's possible as long as you are very frugal, but will not give you the financially comfortable retirement that you may be expecting to enjoy. Much will depend on how you plan to spend your time in retirement, particularly what is week to week living and what is exceptional beyond that.

R.

Blimey, I'm working and after my increased pension contributions pick up about £27k. I'm typing this by the side of the pool at an inclusive outside of Europe, run a TVR, a daily driver and have another expensive hobby. If you can't retire and live a comfortable life on 30k you must be doing something wrong, then again I'm assuming your other half is on similar.

[red_slr]

Its actually interesting if you budget just how little money you actually need to live a reasonable lifestyle in the UK.

We are closing in on retirement so we are now really cutting back to maximise our saving rate and also getting used to budgeting.

Its amazing how much you can cut back by and not really have any change in what you have - its just how you have it / when / where. If that makes any sense.

I used to nip into Costa every morning and grab a coffee. Now I just make my own at work. Lunches are home made sandwiches or home made soup. Easily saving over £1500 a year.

My car is 6 years old, I would normally change it around now but I am not going too. Its fine as a car, gets me from AtoBtoC and its fairly cheap to run for the size of the car. Buying a newer version of the same car is nice, but really not needed. I will probably keep it now till something major goes wrong. I am not bothered about main dealer servicing so I will change the oil once a year and MOT it myself.

We have got rid of sky and negotiated a new deal on our internet, gas and electricity. Saving about £1200 a year. Its the same gas... same internet. Just cheaper.

My phone contract (x2) is up in December will be going onto GiffGaff. Saves around £300 a year.

Rather than going out on a Saturday night and just finding somewhere to eat at random we book in advance using discount sites or skip Saturday all together and get a Sunday afternoon deal somewhere for even cheaper.

Pizza is now how made, dominos was £20 ish for 2 pizzas. We were doing that twice a month. Easily £500 a year. Now I make them myself for about £2 each.

The only 2 things I have yet to cut out are my Friday morning hot breakfast and the window cleaner. Combined its £10 a week... so that would be another £520 a year saved.

[The Leaper]

Mazimbrum,

No, other half is definitely not on the same as me. She gets a basic state pension (well below the maximum), and then with some savings income she remains well below the personal income tax allowance.

I also feel that another key issue is that many people who are , say in their 30s, who think they will retire early, at say 55 or so, then do their financial planning on their current lifestyle less obvious costs such as a mortgage etc. that they assume will not be in place when they retire. My point is that at age 55 your lifestyle and expectations may well have changed probably and hopefully to a higher level than in your 30s, so you should be planning for a retirement lifestyle commensurate with that at 55.

I'm pleased that you enjoy the Costas etc, and frequently. We have holidays frequently too. I reckon an enjoyable retirement is a matter of resources and personal priorities, with the right planning for each individual well ahead of retirement.

R.

[BoRED S2upid]

98elise said:

BGarside said:

Currently I'm aged 47 with £193k in a SIPP and £310k ISAs and non-ISA investments. I've been focussing on saving as much as possible towards retirement, but am still no closer to understanding what size of fund I would need for any given age, needing around £15-20k p.a. to live on when retired.

I love reading about these pension projections which are based on 7% annual growth, when over the last 2 years with Hargreaves-Lansdown my investments have made 0%. It feels as though all the money I save just disappears into a black hole.

Although I've since moved them to different managers the upcoming Brexit turmoil and potentially lasting effect on the UK economy, plus the possibility of a wider global recession and, in the long term, the obvious environmental unsustainability of ongoing economic growth is surely going to throw a massive spanner in the works for anyone relying on investment performance to generate a pension pot??

What are you invested in with H&L? I've just invested with 5 of the popular Global funds (Lindsel Train, Fundsmith etc) and the growth has been excellent.

LT alone is shown 60% in the past few years.

What he said. How can you possibly make nothing? Unless it’s all with Woodford. Most of the big players manage to make decent returns every year. SIPP fees must be huge to eat into the profits or you’re in very low risk funds.

[Mr Pointy]

BoRED S2upid said:

98elise said:

BGarside said:

Currently I'm aged 47 with £193k in a SIPP and £310k ISAs and non-ISA investments. I've been focussing on saving as much as possible towards retirement, but am still no closer to understanding what size of fund I would need for any given age, needing around £15-20k p.a. to live on when retired.

I love reading about these pension projections which are based on 7% annual growth, when over the last 2 years with Hargreaves-Lansdown my investments have made 0%. It feels as though all the money I save just disappears into a black hole.

Although I've since moved them to different managers the upcoming Brexit turmoil and potentially lasting effect on the UK economy, plus the possibility of a wider global recession and, in the long term, the obvious environmental unsustainability of ongoing economic growth is surely going to throw a massive spanner in the works for anyone relying on investment performance to generate a pension pot??

What are you invested in with H&L? I've just invested with 5 of the popular Global funds (Lindsel Train, Fundsmith etc) and the growth has been excellent.

LT alone is shown 60% in the past few years.

What he said. How can you possibly make nothing? Unless it’s all with Woodford. Most of the big players manage to make decent returns every year. SIPP fees must be huge to eat into the profits or you’re in very low risk funds.

He was in the multi manager funds; I didn't think they were that bad but:

June 18 - June 19
Income & Growth -6.48%
UK Growth -4.96%
Special Situations +0.5%
European +4.6%
Balanced Managed +0.03%
Strategic Assets -1.14%
Asia & Emerging Mkts +7.14%

If you weren't in the Asia fund things look a bit woeful. The June 17 - June 18 performance wasn't stellar either so over the two years performance of some of these funds looks to have been negative.

[JulianPH]

Mr Pointy said:

BoRED S2upid said:

98elise said:

BGarside said:

Currently I'm aged 47 with £193k in a SIPP and £310k ISAs and non-ISA investments. I've been focussing on saving as much as possible towards retirement, but am still no closer to understanding what size of fund I would need for any given age, needing around £15-20k p.a. to live on when retired.

I love reading about these pension projections which are based on 7% annual growth, when over the last 2 years with Hargreaves-Lansdown my investments have made 0%. It feels as though all the money I save just disappears into a black hole.

Although I've since moved them to different managers the upcoming Brexit turmoil and potentially lasting effect on the UK economy, plus the possibility of a wider global recession and, in the long term, the obvious environmental unsustainability of ongoing economic growth is surely going to throw a massive spanner in the works for anyone relying on investment performance to generate a pension pot??

What are you invested in with H&L? I've just invested with 5 of the popular Global funds (Lindsel Train, Fundsmith etc) and the growth has been excellent.

LT alone is shown 60% in the past few years.

What he said. How can you possibly make nothing? Unless it’s all with Woodford. Most of the big players manage to make decent returns every year. SIPP fees must be huge to eat into the profits or you’re in very low risk funds.

He was in the multi manager funds; I didn't think they were that bad but:

June 18 - June 19
Income & Growth -6.48%
UK Growth -4.96%
Special Situations +0.5%
European +4.6%
Balanced Managed +0.03%
Strategic Assets -1.14%
Asia & Emerging Mkts +7.14%

If you weren't in the Asia fund things look a bit woeful. The June 17 - June 18 performance wasn't stellar either so over the two years performance of some of these funds looks to have been negative.

That is quite shocking.

They are not exactly cheap either plus you have to add the 0.45% HL platform fee on top of this.

BGarside - You may want to rethink your investments, these are pretty shocking returns and quite expensive.

[BGarside]

Already have, my SIPP is now with Intelligent Money and the rest with Investec. The latter's fees are similar to H-L but currently too early to say how the two are performing. Have lost patience with H-L!