Part time worker needing pension advise

dragonladywendy

Hi there,

I am 31 years old and getting very worried reading the posts on pensions!!

I work part time for Asda, and contribute 2% to the pension fund at work that they also match. Reading other posts, it looks like I need some advise on the best way to increase my pension fund so that I have about 500 to 900 pounds per month once past the age of 65. (in todays money terms)

Firstly, how do I go about getting hold of a cheap IFA that is not connected to a bank?

Secondly, as I probably will not ever go back to working full time (child in tow!) is it possible to pay into a pension without hurting me too much now?

I earn about 500 pounds a month now, just about finished paying off my loan. so that will free up 70 pounds a month. My partner pays the mortgage, but I pay almost all other bills, so i am used to surviving on almost 20 pound a week!!! once the bills are paid.

Not letting my son get into the situtation of debt and lack of money, been saving for him since he was born, so hopefully he will have a tidy nest egg once he is 21

Find this very easy to understand, but with regards pensions, I am almost certainly lost.

Any advise will be welcome, please keep it simple (like myself!!) Ta very much ;D

robnye

my wife also works part-time.

she started a stakeholder pension plan 2 years ago, when she started she only paid £20 per month, last year we increased it to £30, next year we will increase it again.

she started it with virgin, with has an online calculator which gives some indication of what she can expect to receive, if she keep s paying in, you can also massage the figures up and down to see the effect on the final pension.

stakeholder pensions have reduced or static charges placed against them by the company you buy it from.

can you increase your contribution into the asda pension plan?
Asda may not increase there part of the contribution.

i currently pay 4% into my company pension, the company pays another 2% in.

DavidLaGuardia

Most IFAs are not connected with banks who tned to push theri own products.
You would of course be ill advised not to at least do the contribution that willl be matched by your employer, but any decent level of pension may require a lot more input into any form of savings towards retirement.
A duggestion of how much would be needed could be quoted by an IFA. If this is a lot to commit to, you may consider putting some of the savings into a non pension product that can later be put accross into a pension, but still be accessed in an emergency in the meantime (ISAs are one example). You might even consider using some of it to save for a deposit on a buy to let property some time in the future as a complementary retirement fund. If tenants pay for the cost of borrowing you get the benefit of growth on a much bigger asset than the deposit made.

Pal

You might even consider using some of it to save for a deposit on a buy to let property some time in the future as a complementary retirement fund.  If tenants pay for the cost of borrowing you get the benefit of growth on a much bigger asset than the deposit made.    

Or a much bigger loss if the house price falls while you own it.

When are people going to realise that BTL is not a passive "investment". It is a business that you have to manage actively. The two are very different animals.

deemy2004

Or a much bigger loss if the house price falls while you own it.

When are people going to realise that BTL is not a passive "investment".  It is a business that you have to manage actively.  The two are very different animals.

At last !

I agree 100% with Pal

Buy to lett with yields of what 4 to 5% after costs and charges ?

You can get much better investments with a lot less risk.

dragonladywendy

Thank you, Thank you, Thank you ;D

I love how this site gets you information that you would otherwise never know!

We did look into buying another property to tide us over in our retierment years, so your posts made us look at it more closely!!

As to the Virgin calculator, I never knew anything like that exsisted ( see I said I was simple!!!) So many ta's robnye.

Partner is sorted pension wise working for the MOD its just mine that needs tweaking

Please keep the suggestions coming

DavidLaGuardia

On the subject of Buy to Let, yes PAL you can lose, which is why it should be over the long term. Even with crashes (which can also occur in the stock market obviously) Property over time is a good bet.
As for analysiing the yield, it may be low after costs, but yiled is not something which I would be particularly iunterested in. It is the Gearing of property growth that makes BTL attractive.
Let us suppose that 25% deposit is put down and all the income pays for costs and financing the other 75%. If the value of the property rises by just 3%, the gain on your initial input is 12%. If over time the property increase by 50% then the increase on YOUR investment is 200%. Even if ALL the yield has been used to cover costs it's nmot bad.
It may not be the best time at present, but if property prices do face a correction, then saving for a lump sum to be used as a deposit later is not a bad idea.

deemy2004

The gearing also works the other way   ...

10% fall = 40% of your capital gone  

At least with the stock market you can set stop-losses.

DavidLaGuardia

True Deemy, but then it's only a loss on paper. If the property is a long term project then I think the risk of loss is not that great.
The thing abouit land is that nobody is making any more of it (I admit the Ventians and those in the Fens have been a minority to disprove this rule).
I know what you mean though, which is why I would never suggest it should be used as the only means of saving for retirment. It's a useful extra thing to think about and rightly understand the pros and cons.

Pal

I agree that saving a cash sum that MIGHT eventually be used as deposit on a BTL is a reasonable idea, but BTL is still not a long term "investment". It is a long term "business". Buying a BTL property on the basis that the short term doesn't matter because it will all be ok in the long term is very foolish indeed.

BTLs need to be managed so that they are NEVER a significant financial risk to the owner, and can be sold almost immediately if required.

BTL can still work IF you find the right property at the right price and IF you know exactly what you are doing, but it takes a lot of time, research and advice.

There is a post on the mortgage forum from someone who is in trouble with his BTL and now faces some serious financial problems, and this is before any significant fall in house prices! Unfortunately I expect to see many more similar posts over the next 2 or 3 years.

Any more posts on BTL and I will move this thread to the property board!

deemy2004

True Deemy, but then it's only a loss on paper.  If the property is a long term project then I think the risk of loss is not that great.
The thing abouit land is that nobody is making any more of it (I admit the Ventians and those in the Fens have been a minority to disprove this rule).
I know what you mean though, which is why I would never suggest it should be used as the only means of saving for retirment.  It's a useful extra thing to think about and rightly understand the pros and cons.

Paper losses

I'm still bruising a few paper losses from the dot com crash..... 99% gone.............. does not feel like a paper loss

All losses are real whether realised or not.