Am I being thick

simm31

In relation to GeeGee8's comments...


Now you sound like my wife!

I've had an obsession with a figure of cash in the bank...so yep could pay the car off tomorrow.

No work is now garanteed so just having the money there is a nice safety net.

But paying in to a pension,,,,they just don;t get any good press and so far no one on here has said

"Simon, if you pay in £250 p/m to this scheme you and the wife in 20years will have £X p/a pension to top up the state one" which makes me think even more so Pensions are a compelte waste of money...HELP correct my views!

katsu

Simon - I would save into a pension now for two reasons:

1 - tax benefits - you pay your contributions and then they are topped up so a basic rate tax payer gets £100 in the pension pot but only pays £78 (as I recall/understand it). To pay the money off the mortgage you need the whole £100 from your wages.

2 - In the same way the mortgage works, you then get the benefit of the sum building up and the interest building up too. So if you save £100 per month for 10 years you are better off than if in 10yrs you decide to start saving for a pension, as you will need to save more money to get the same pension at the end as you have not benefitted from the interest. I've not written that very well.

DH and I are both paying into pension schemes at work, and working on being MF. I would not stop the pensions to put more into the MF activities.

I agree you should look at the pensions board for advice.

HTH

simm31

RenovationMan wrote: »

Why not?

An immediate 20% or 40% increase in your investment as soon as your money is put into a pension plan. I cant think of any other investment with those sorts of returns.

And there is my point, I simple am not a money man, I don't understand it, I just know how to earn it and spend it...

What is a good pension plan to consider?

lincoln-potter

RenovationMan wrote: »

Why not?

An immediate 20% or 40% increase in your investment as soon as your money is put into a pension plan. I cant think of any other investment with those sorts of returns.

No particular reason, no factual evidence to say x,y or z. More so based on my own personal circumstances, which are different to most in that it leaves me with (in my opinion) better alternatives, but i'll not go into that now as not to digress from simm questions.

In all honesty I don't know a huge deal about pensions for the standard employee so mine is a personal opinion only

simm31

RenovationMan wrote: »

Visit an Independant Financial Advisor and see what s/he recommends for you and your wife, then pop onto the pensions board with the recommendations and see what people on there think. Be prepared for 20 different views though....

EDIT: First question though is whether your employer has a pension scheme that they contribute to?

Yes, Company pension scheme just in process of being review due to new rules...not comment yet on what the Company will pay in...in my line of work 3-5 years max in a roll then move to a new Company so I've got to get something done outside of work!

simm31

RenovationMan wrote: »

Not necessarily. My career has also involved a move every two or three years (the longest I have every stayed with a company is 4 years). I have always joined the company scheme and when I leave, I transfer the money from that scheme into a new one with my next employer.

You get free contributions from your employer and the government adds in a tax rebate on your contributions to the tune of 20% or 40% depending on your tax threshold.

Without any real effort (or major contributions) on my part, I have built a pension fund in excess of £100k from employment with 5 or 6 different employers.

...and what will a £100k fund payout annually at 65 in today's money...?

katsu

simm31 wrote: »

...and what will a £100k fund payout annually at 65 in today's money...?

I assume renovation man's fund will be higher when he retires, but you are also missing the point that of his £100k, he has not had to fund a large part of it. Part of it has come free from the tax man and part from his employer(s).

In my last couple of jobs my employers have put in between 6 and 10% of my salary as their contribution. That has cost me nothing. I have also received tax relief, so I paid in £78 and the "tax man" topped it up to £100. I too have moved jobs but I have left the money sitting in pots.

Honestly, look at the pensions forum, maybe see what articles Martin has and even see an IFA.

ViolaLass

I see you chose to get your wife's car on finance because you like having money in the bank. You might want to think about how much that choice is costing you.

Why would you consider paying your mortgage off before you pay the car finance off? It's highly likely that the interest rate on the car is the higher of the two.