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    • Rails
    • By Rails 17th May 17, 9:53 AM
    • 4Posts
    • 1Thanks
    Rails
    Additional pension contributions or LISA?
    • #1
    • 17th May 17, 9:53 AM
    Additional pension contributions or LISA? 17th May 17 at 9:53 AM
    Hi I am trying to work out the best course of action in terms of planning for my retirement. I am 34 at the moment and would like to take either full or partial retirement at age 60.

    I am currently a Civil Servant earning £18,000 a year before tax, I make the minimum standard pension contributions for the Alpha Scheme which is at the moment is 4.6%. The only debt I have is my mortgage, the balance on this is £54,000 & I have a two year fix at 1.54% so my monthly payment is £217.

    For a while I have been saving £250 each month & that has built up to savings of £6000. I have worked out that I could afford to pay the full £4000 (£333 per month) into a LISA each year.

    I am leaning towards the LISA rather than making additional pension contributions because my normal pension age for my workplace pension is tied to my state pension age which is currently 68 whereas as the LISA would be accessible at age 60.
Page 1
    • kidmugsy
    • By kidmugsy 17th May 17, 4:57 PM
    • 9,329 Posts
    • 6,122 Thanks
    kidmugsy
    • #2
    • 17th May 17, 4:57 PM
    • #2
    • 17th May 17, 4:57 PM
    That seems a rational plan to me. Do you have an adequate emergency cash reserve?
    • Rails
    • By Rails 17th May 17, 7:03 PM
    • 4 Posts
    • 1 Thanks
    Rails
    • #3
    • 17th May 17, 7:03 PM
    • #3
    • 17th May 17, 7:03 PM
    Not as such. If I had to pay an emergency bill I guess I would have to rely on using my credit card.
    • cfw1994
    • By cfw1994 18th May 17, 9:53 AM
    • 107 Posts
    • 21 Thanks
    cfw1994
    • #4
    • 18th May 17, 9:53 AM
    • #4
    • 18th May 17, 9:53 AM
    Not as such. If I had to pay an emergency bill I guess I would have to rely on using my credit card.
    Originally posted by Rails
    But you do have £6K in savings, right?
    Are you planning to invest all of that into the LISA?
    You may want to keep some back....always nice to try to have some accessible cash for unexpected bills....
    • Rails
    • By Rails 18th May 17, 10:25 AM
    • 4 Posts
    • 1 Thanks
    Rails
    • #5
    • 18th May 17, 10:25 AM
    • #5
    • 18th May 17, 10:25 AM
    Oh yeah I have £6K savings in cash as of right now. I was planning on paying £4000 into a LISA before the end of the current tax year & then another £4000 at the start of the new tax year because if I have understood how the LISA will work correctly I will then get the full bonus at the start of the tax year so it will have longer to grow.

    Then I would be saving £4000 each year ready to pay into the LISA at the start of each new tax year.
    • kidmugsy
    • By kidmugsy 19th May 17, 12:06 AM
    • 9,329 Posts
    • 6,122 Thanks
    kidmugsy
    • #6
    • 19th May 17, 12:06 AM
    • #6
    • 19th May 17, 12:06 AM
    Not as such. If I had to pay an emergency bill I guess I would have to rely on using my credit card.
    Originally posted by Rails
    That's an absurdly expensive risk to take. Open a high-interest current account at Nationwide (Flexdirect) and keep £2500 in it, earning 5% p.a. Also open a Flexclusive regular saver, also paying 5%.

    Be sure to check the T&Cs before you act.
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