Pensions Planning: The NUMBER

ffacoffipawb

caveman38 said:

tigerspill said:

Bravepants said:

Hi, yes its a MINERVA SIPP held with Investacc Pensions. They are the trustees where the sum is actually held in an Investec 2 year fixed Cash Deposit Account. I am just coming up to 1 year with them, and I have another year to run.

Hi Bravepants,
Do you open this direct with Investec?
I am trying to find a good cash SIPP to hold money for around three years (for my wife).  The likes of AJ Ball and HL offer 0.1/0.2%.  1.95% seems great.  Just wondering about how to go about opening this SIPP?
Thanks 

Unless there are zero fees, then it's hard to compare. I too await Bravepants reply regarding fees.

Doesnt seem particularly cheap. Not surprising ...
https://www.investaccpensions.co.uk/wp-content/uploads/2018/12/Minerva-SIPP-Schedule-of-Fees.pdf

Linton

PJM_62 said:

The cash bucket, I see as a joint 1 year bucket. 20k in that supplementing similar yearly amount from combined DBs.
So you think a 2 year 40k cash bucket would be the way to go, spending from that over 2 years if necessary, before topping it up again when SIPPs are hopefully in better health?

Sorry, yes 1 year rather than 6 months.

Our cash buffer is used temporarily for 1-off large expenditures and in the longer term for cover for a crash when it would support about 2 years loss of access to our investments.  Also about 20% of our investments are in wealth preservation funds which withstood previous crashes very well.

Albermarle

ffacoffipawb said:

caveman38 said:

tigerspill said:

Bravepants said:

Hi, yes its a MINERVA SIPP held with Investacc Pensions. They are the trustees where the sum is actually held in an Investec 2 year fixed Cash Deposit Account. I am just coming up to 1 year with them, and I have another year to run.

Hi Bravepants,
Do you open this direct with Investec?
I am trying to find a good cash SIPP to hold money for around three years (for my wife).  The likes of AJ Ball and HL offer 0.1/0.2%.  1.95% seems great.  Just wondering about how to go about opening this SIPP?
Thanks 

Unless there are zero fees, then it's hard to compare. I too await Bravepants reply regarding fees.

Doesnt seem particularly cheap. Not surprising ...
https://www.investaccpensions.co.uk/wp-content/uploads/2018/12/Minerva-SIPP-Schedule-of-Fees.pdf

I think that is the Full SIPP , you canhold things like commercial property in it . There is a SIPP Lite that is cheaper . £195 annua fee + £95 initial set up + £100 for any payments out.
I am not sure though which one you need for the savings account .

bostonerimus

I basically just took my annual budget and subtracted my mortgage payment as I planned to have it paid off before retirement and ended up with a number around £15k.

ffacoffipawb

Albermarle said:

ffacoffipawb said:

caveman38 said:

tigerspill said:

Bravepants said:

Hi, yes its a MINERVA SIPP held with Investacc Pensions. They are the trustees where the sum is actually held in an Investec 2 year fixed Cash Deposit Account. I am just coming up to 1 year with them, and I have another year to run.

Hi Bravepants,
Do you open this direct with Investec?
I am trying to find a good cash SIPP to hold money for around three years (for my wife).  The likes of AJ Ball and HL offer 0.1/0.2%.  1.95% seems great.  Just wondering about how to go about opening this SIPP?
Thanks 

Unless there are zero fees, then it's hard to compare. I too await Bravepants reply regarding fees.

Doesnt seem particularly cheap. Not surprising ...
https://www.investaccpensions.co.uk/wp-content/uploads/2018/12/Minerva-SIPP-Schedule-of-Fees.pdf

I think that is the Full SIPP , you canhold things like commercial property in it . There is a SIPP Lite that is cheaper . £195 annua fee + £95 initial set up + £100 for any payments out.
I am not sure though which one you need for the savings account .

Doesnt tell you the other costs either, eg buying and selling shares, funds etc.

atush

JoeCrystal said:

Linton said:

I would certainly split leisure and emergency funds. You don’t want excess spending in one to force a cutback in the other. Clothing? Phone? Food at about £3.50/day or £1.20 per meal seems unbelievably frugal.

It is possible, though. You can get a tin of chicken soup from Tesco for 29p in my personal experience. £3.50 per day is entirely feasible. That is roughly how much I spend on my foods, although you may have to miss a meal or two a day. 

If i want soup i want good soup.  So make it from scratch.  Wont be buying a tin at 29p for sure.

I can cook scratch for 2 people for 3 meals a day at 3.50.  But it isnt my idea of living, more like just existing,

atush

Linton said:

PJM_62 said:

Wife and myself still a year or two away from early retirement (at 56 ish), but we've done our Numbers and a joint income of 36k will be plenty for our needs. About half of that will be from DB income. The other half using SIPP income. When we're retired and living off our Numbers I'd like to have a bucket scheme in place with 20k ish in a cash bucket. The bucket will initially be filled using about 20% of a VLS ISA pot, and kept topped up with SIPPs while they are performing ok.
What do folks think about getting that cash bucket safely in place now, a couple years early ?
And also what are thoughts on best place to put a 20k cash bucket ?

In my view 6 months income in a cash buffer is much too small - major crashes can last much longer than that.  Perhaps more importantly, the larger the cash buffer the less stress you feel when the big one comes.

What's your plan if a crash happens in the next 2 years?  Will you happily carry on working or would you prefer to retire regardless? If the latter I suggest you get your buffer in place immediately.

As to where to put it: I dont think it matters much as long as the money is safe and easily accessible.  You are not holding the money to provide a return but rather security.  We hold our cash buffer in PBs.  The money is 100% safe, accessible in a few days and as a bonus one gets a couple of minutes excitement once a month.

I agree, 6 months is too small.

We plan on around 3 years incl emergency/replacement funds.

kinger101

atush said:

Linton said:

PJM_62 said:

Wife and myself still a year or two away from early retirement (at 56 ish), but we've done our Numbers and a joint income of 36k will be plenty for our needs. About half of that will be from DB income. The other half using SIPP income. When we're retired and living off our Numbers I'd like to have a bucket scheme in place with 20k ish in a cash bucket. The bucket will initially be filled using about 20% of a VLS ISA pot, and kept topped up with SIPPs while they are performing ok.
What do folks think about getting that cash bucket safely in place now, a couple years early ?
And also what are thoughts on best place to put a 20k cash bucket ?

In my view 6 months income in a cash buffer is much too small - major crashes can last much longer than that.  Perhaps more importantly, the larger the cash buffer the less stress you feel when the big one comes.

What's your plan if a crash happens in the next 2 years?  Will you happily carry on working or would you prefer to retire regardless? If the latter I suggest you get your buffer in place immediately.

As to where to put it: I dont think it matters much as long as the money is safe and easily accessible.  You are not holding the money to provide a return but rather security.  We hold our cash buffer in PBs.  The money is 100% safe, accessible in a few days and as a bonus one gets a couple of minutes excitement once a month.

I agree, 6 months is too small.

We plan on around 3 years incl emergency/replacement funds.

I'll probably aim for around 5, but that's after taking into account the fixed income from SP and DB when they kick in.  Which should provide just over half the income I need.  

DairyQueen

Albermarle said:

 Just shows what having a reasonably well paid job and no great urge to splash the cash can result in. When  I see  some friends /relatives  approaching retirement still with mortgages , no pensions, or in one case bankrupt , then all that working/saving seems worthwhile in the end. 

This may seem a dumb question but have you found that the disparity between your's and others' pension provision has caused any tensions with family/friends? 

DairyQueen

atush said:

We plan on around 3 years incl emergency/replacement funds.

Ditto but exclusive of emergency funds.

Replacements are part of our annual budget so any unused surplus will be saved at the end of each year in preparation for the occasional mega-purchase such as cars.

Should the need arise we will also use this to fund treatment of chronic conditions that are subject to long NHS delays. A friend was almost crippled before he reached the top of the years-long waiting list for hip replacements, and a family member's life is currently badly compromised as he is in urgent need of treatment for a rapidly-worsening hernia. He has been on the referral list for almost 4 months and no consultant appointment yet in sight, let alone any treatment. He has deteriorated to the point that he can't lift, bend or push without discomfort or pain.

We have no intention of falling victim to that particular NHS postcode lottery.