Were to invest £50k ? Pension or ?????

redstev

Hi

I'm after some advise please.
I am 40 years old and have no pension plan other than state pension but dont know what my entitlements are with a state pension. I dont have any pension plan with work either.

I have invested in buy to lets over the last 6 years but they are costing me money rather than making it and am considering selling up. The buy to lets were meant to be my pension.

If I sell up I should come out with about £50k am I best putting this into a pension plan or ISA or is there any other types of investments I should look at.

I don't have a great deal of spare money out of my monthly wage to pay into a pension pot each month either.

Any help and advise would be appreciated.

jem16

redstev wrote: »

I am 40 years old and have no pension plan other than state pension but dont know what my entitlements are with a state pension. I dont have any pension plan with work either.

First thing to do is get a state pension forecast online.

http://www.direct.gov.uk/en/Pensionsandretirementplanning/StatePension/StatePensionforecast/DG_10014008

If I sell up I should come out with about £50k am I best putting this into a pension plan or ISA or is there any other types of investments I should look at.

That depends on your current tax status and how much state pension you would get.

Ideally you should use pensions to use up your tax free personal allowance of £10k approx at age 65. After that as absic rate taxpayer use S&S ISAs. If a higher rate taxpayer use pensions.

redstev

Cheers

Just got a forecast £102 per week state pension for me wow !!!!!

I'm a basic rate taxpayer by the way.

jem16

redstev wrote: »

Cheers

Just got a forecast £102 per week state pension for me wow !!!!!

That's just the basic state pension. Have you no entitlement to SERPS/S2P?

Basically can you live on this? I would imagine you would be entitled to pension credits if this is all you have - may be superseded by the new flat rate being propsoed of £140pw.

redstev

Cant imagine living off the £102 per week. I did opt out of serps when I was 18 but dont know what that means ????

Also without giving my full life story.........

I am seperated from my wife who was the main bread winner in our marrage while I brought up the children As I brought up the kids I was self employed so paid my stamp every month.
When we seperated I agreed not to touch her pension ( which is a very good pension ) and she agreed not to touch my buy to let properties. I am a 50-50 partner in 3 rental properties. I am beginning to think she has come out of this deal better than I.

I have yet to see a solicitor about proceeding with the divorce but need to sort this too.

jem16

redstev wrote: »

I did opt out of serps when I was 18 but dont know what that means ????

It means that, if you were employed, your NI rebates would be being paid into a personal pension that you chose.

I am seperated from my wife who was the main bread winner in our marrage while I brought up the children As I brought up the kids I was self employed so paid my stamp every month.

Which only entitles you to the basic pension.

Before you did this were you ever employed?

redstev

I've worked for 24 years. 8 years selfemployed 16 years cards in for various companys.

jem16

redstev wrote: »

I've worked for 24 years. 8 years selfemployed 16 years cards in for various companys.

So where have your contrcated out rebates gone for those 16 years?

redstev

Abbey National or Santander as it is now set up a retirement fund for me when I was 18 and the payments go in there. I have never added to these funds its just my contracted out serps in the account.

Am i best putting the 50k in a high interest account or a pension ?

Thanks very much for your advise.

jem16

redstev wrote: »

Abbey National or Santander as it is now set up a retirement fund for me when I was 18 and the payments go in there. I have never added to these funds its just my contracted out serps in the account.

Find out what's in there first.

Am i best putting the 50k in a high interest account or a pension ?

I wouldn't go with a high interest account as savings accounts aren't even keeping up with inflation. You want this £50k to grow over the next 15/20 years depending on when you will retire.

So it's either S&S ISA or pension. Which is better depends on how much of that personal allowance of 310k at age 65 you will have. You have £5304 coming from the state pension. Some will come from the contracted out pension with Santander. If there's any left it might be useful to put the £50k into a pension to get the tax relief. If not S&S ISA so it's tax free.

redstev

Sorry but whats a S & S ?????