Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

    • Captain Hook
    • By Captain Hook 3rd Jan 18, 8:09 PM
    • 4Posts
    • 4Thanks
    Captain Hook
    Late twenties and fairly clueless. What should we be doing?
    • #1
    • 3rd Jan 18, 8:09 PM
    Late twenties and fairly clueless. What should we be doing? 3rd Jan 18 at 8:09 PM
    To be quite honest, I haven't really considered retirement saving until this point as my wife and I have been prioritising saving for the wedding, raising a house deposit etc. No real Bank of Mum and Dad here. We are hoping to exchange and complete in the next several weeks and so my mind has started to move towards more long-term financial planning.

    Now, as a teacher, I have been contributing towards a defined benefit pension scheme since I started my first teaching job in 2012. The first two-and-a-half years were as part of a final salary (1/60, NPA 65) which has since become a career average scheme (1/57th of pensionable earnings each year, NPA 68). I currently pay 10.2% in each month. As it stands, my total pension amount represents 7.61% of the current Lifetime Allowance. I'm not sure whether that's something that I should be worried about. My wife is a doctor and has been paying into her NHS pension since she qualified in 2012. She doesn't have a clue as to the status of her scheme but believes that it's now based on her career average.

    I'm not entirely sure what our plans are going to be vis-a-vis retirement. We both have another 39 years before our normal pension ages. That's a long time away and I'm not convinced that I will want (or be able) to be working at a high level to that age. I suppose some flexibility would be preferable so that we/I could retire earlier if possible. I understand that your benefits reduce (fairly dramatically) if you retire 'early' and so what I suppose I'm after are tips, anecdotal stories and whatever else that anyone wants to contributes on what we should be doing.

    Should we be making additional voluntary contributions to our pension pots? Buying additional pension, faster accrual...? It's not unlikely that we will both hit the lifetime allowance at some point in our careers. Is this something we should be concerned about? Are Lifetime ISAs worth investigating? I understand that they mature/pay out at 60. Should we be looking at other forms of investment? Keep in mind that we are not particularly interested in finance and are relatively risk-averse.

    Some extra details. In the immediate term, we will be looking to complete our property purchase, 'do it up' to increase its worth, regularly overpay the mortgage, and build up an easy-access emergency fund (ca. 6 months income). We are both at points in our careers where we can take another step forward within the coming year - with the salary increases that will entail. House-wise, we expect to be there for around fix years (which ties in with the 5 year fixed mortgage rate that we have applied for) before remortgaging, looking to extend, or seeking to move to a more high-value property.

    Sorry for the essay. Basically, what plans would you be making if you were in a similar position...
    Last edited by Captain Hook; 03-01-2018 at 8:13 PM.
Page 2
    • ValiantSon
    • By ValiantSon 8th Jan 18, 6:26 PM
    • 180 Posts
    • 177 Thanks

    A teacher can have a DC scheme running alongside and should, if they want to retire earlier than scheme age.

    Enhancing their pension, then taking a 50% hit is an absurd choice. It would be a good choice if they plan working until scheme age (ie 67).
    Originally posted by atush
    No it isn't rubbish. You may prefer a different strategy, but that doesn't mean that what I said is rubbish.

    I never said that a teacher couldn't have a DC scheme in addition to their DB scheme. Don't put words in my mouth.

    It isn't an absurd choice at all as it offers a guaranteed return. You've also completely ignored the fact that I had actually been discussing with the OP the idea of "funding the gap" alongside faster accrual.

    Actuarial reduction is not 50%. Check the GAD for actuarial reduction factors. You aren't even close.

    Oh, and NPA is 68 for the OP not 67, but then why would you worry about getting that fact correct when you haven't with any of the others?

    Please take your straw man with you.
    Last edited by ValiantSon; 08-01-2018 at 8:19 PM.
    • BobQ
    • By BobQ 12th Jan 18, 12:57 AM
    • 9,915 Posts
    • 12,919 Thanks

    The faster accrual is a guaranteed return, whereas a DC scheme is not.
    Originally posted by ValiantSon
    I never said otherwise.
    Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment. Most people are incapable of forming such opinions.
    • ValiantSon
    • By ValiantSon 12th Jan 18, 2:26 AM
    • 180 Posts
    • 177 Thanks
    I never said otherwise
    Originally posted by BobQ
    I didn't say that you had.

    I was giving an explanation as to one reason why faster accrual was a beneficial option.
    Last edited by ValiantSon; 12-01-2018 at 2:30 AM.
    • CommyTooper
    • By CommyTooper 12th Jan 18, 10:05 AM
    • 31 Posts
    • 31 Thanks
    Mortgage payments become income assets, but only when mortgage is paid.
    You are in good pension schemes. We both have the security of ‘local government’ type pensions, and we are mortgage free.
    I will be fully retired by the end of this year, and my wife within four years. Would urge you to become a “mortgage free wannabe”..... there is a forum on the subject. Our retirement savings started racing ahead when the mortgage stopped, and we have had a whale of a time to date.

    Seems to me your in a good position, stay sensible.
    Live life .... juss like that
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

4,373Posts Today

8,324Users online

Martin's Twitter