Pensions advice
Discussion
Dear all,
My son is in need of a pension. He is 30. He has a small deferred pension from HM Armed forces . He has another pension fund , from employ at Balfour Beatty.
Both these sources of funds are being looked into for advice.
He is now a plumber. working for a small company, that does not offer a pension scheme.
So, whats best advice for a pension provision?
Personally, I feel it would be best if he could manage his own fund. My perspective being that he should save as much money as poss, along the financial year, in a cash isa ..then purchase prior to end of Fin year...shares in a footsie 100 company(s) . With a tilt toward those who offer SCRIP or DRIP dividends.
However, as the tax position is in question , how does he rectify the tax scenario, yet still, (if possible ) manage his own fund?
Any advice or pointers please. Ta!
My son is in need of a pension. He is 30. He has a small deferred pension from HM Armed forces . He has another pension fund , from employ at Balfour Beatty.
Both these sources of funds are being looked into for advice.
He is now a plumber. working for a small company, that does not offer a pension scheme.
So, whats best advice for a pension provision?
Personally, I feel it would be best if he could manage his own fund. My perspective being that he should save as much money as poss, along the financial year, in a cash isa ..then purchase prior to end of Fin year...shares in a footsie 100 company(s) . With a tilt toward those who offer SCRIP or DRIP dividends.
However, as the tax position is in question , how does he rectify the tax scenario, yet still, (if possible ) manage his own fund?
Any advice or pointers please. Ta!
Thanks for this. I'll do some digging around...see what gives good impressions.
As regarding FTSE 100 and scrip and drip dividends..I see buying opportunities at the moment...especially for the long term.
As an aside..My own share portfolio, in 4 companies from circa 1985-7 stands me at less than £3000 and is now worth approx 25 times that amount. It would be worth that again apparently, had I had scrip or drip facilities from day one. As it is, I have had more in cash dividends than what the shares cost me initially.
On another tilt, a house I bought in 1983, would today show less than 9 times its purchase price.
So share trading is not a problem, from what I can make of it, the scrip/drip facility is a major compound interest potential. Its the taxation standing that concerns me.
Anyhow..thanks for the pointers...will be doing some digging.
Ta!
As regarding FTSE 100 and scrip and drip dividends..I see buying opportunities at the moment...especially for the long term.
As an aside..My own share portfolio, in 4 companies from circa 1985-7 stands me at less than £3000 and is now worth approx 25 times that amount. It would be worth that again apparently, had I had scrip or drip facilities from day one. As it is, I have had more in cash dividends than what the shares cost me initially.
On another tilt, a house I bought in 1983, would today show less than 9 times its purchase price.
So share trading is not a problem, from what I can make of it, the scrip/drip facility is a major compound interest potential. Its the taxation standing that concerns me.
Anyhow..thanks for the pointers...will be doing some digging.
Ta!
My tuppence.
Self Invested Personal Pension:
+ points = any contributions are grossed up by 20%, ring fenced incase of bankruptcy, can be passed onto a spouse incase of death, he can transfer in the value of his existing pensions to a new SIPP
- points = resitricted access ( 55 take 25% as tax free lump, then income from 65 ), tax will be paid on income once over 65.
ISA
+ points = flexbility he can do what/when he likes with the money, income drawn is tax free.
- points = no bankruptcy protection, can't be passed onto a spouse.
I'd recommend a split, maybe 50% into the ISA, 50% into the SIPP.
I do agree with your long term strategy, and with the value of dividends!!!!
Self Invested Personal Pension:
+ points = any contributions are grossed up by 20%, ring fenced incase of bankruptcy, can be passed onto a spouse incase of death, he can transfer in the value of his existing pensions to a new SIPP
- points = resitricted access ( 55 take 25% as tax free lump, then income from 65 ), tax will be paid on income once over 65.
ISA
+ points = flexbility he can do what/when he likes with the money, income drawn is tax free.
- points = no bankruptcy protection, can't be passed onto a spouse.
I'd recommend a split, maybe 50% into the ISA, 50% into the SIPP.
I do agree with your long term strategy, and with the value of dividends!!!!
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