Nearly 40 is it too late....

somethingcorporate

crescent179 wrote: »

I was given misinformation by my TL then!
So would you advise to join that one then?

Thanks for the link, thats my weekend reading sorted...

Yes, it's very good (for defined contribution). For every pound you put in (assuming you put in 5%), BT will put £1.60, plus you get tax relief (at the higher rate if you earn over £43k) so that £1 you put in only costs you ~60p.

Where else would you get £2.60 for 60p?

I think BT match up to 9%, I am sure there is some more info on that link supplied by JoeC.

JoeCrystal

Just ran a scenario on HL pension calculator. I am assuming you earn a salary of £26,400 since overtime might not make up Pensionable Salary.

Let say you pay 17% into pension scheme and it went up by annual growth of 7% for twenty five year. You pay £176 (gross) per month and BT pay £198 per month into it. This could results in pension fund of £179,900 with an potential income of £7,919 per year. Which is fairly good!

somethingcorporate wrote: »

I think BT match up to 9%, I am sure there is some more info on that link supplied by JoeC.

They do. As matter of fact, from what I read, if you pay 8%, they will pay 9%, thus £176 per month for employee and £198 per month. By paying 9% instead could increase the yearly income by £466. Alas, it is all depend how well investments have done.

Cheers

Joe

atush

As I mentionned back in post 4, Free Money is always the way to go. And in your case, put in as much as possible to get their max contrib of 9%. If you find with overtime you are nearing the HRT threshold, put in more that year or any this happens in.

Save outside in cash and S&S ISAs, pay off your mtg as well and you will have a nice retirement.

crescent179

JoeCrystal wrote: »

Just ran a scenario on HL pension calculator. I am assuming you earn a salary of £26,400 since overtime might not make up Pensionable Salary.

Let say you pay 17% into pension scheme and it went up by annual growth of 7% for twenty five year. You pay £176 (gross) per month and BT pay £198 per month into it. This could results in pension fund of £179,900 with an potential income of £7,919 per year. Which is fairly good!



They do. As matter of fact, from what I read, if you pay 8%, they will pay 9%, thus £176 per month for employee and £198 per month. By paying 9% instead could increase the yearly income by £466. Alas, it is all depend how well investments have done.

Cheers

Joe

Thanks for breaking that down, very informative.

jamesd

First thing to do is to use that BT scheme. It's a salary sacrifice scheme so that's a nice extra bonus for you, saves you some NI. A salary sacrifice scheme is such a good deal that even a basic rate tax payer ends up getting a total of 32% tax relief - 20% income tax and 12% employee NI saving. Hard to beat a deal like that even without any BT matching contributions.

If you want to retire before age 55 you'll need to add some S&S ISA investing. If you want to retire between 55 and state pension age you can add more pension contributions, best into the BT scheme, and perhaps into S&S ISA depending on how early you want to retire. The earlier you want to retire, the greater the proportion that needs to be in the ISA.

The BT Core range of funds from Standard Life is fairly basic. Given your fairly young age you should take a look at the full range and consider more use of those, partiularly to get increased emerging markets and far east exposure (say SL Schroder Global Emerging Market and SL Fidelity South East Asia). You might also consider some use of SL M&G Global Basics.

middlepuss

atush wrote: »

As I mentionned back in post 4, Free Money is always the way to go. And in your case, put in as much as possible to get their max contrib of 9%. If you find with overtime you are nearing the HRT threshold, put in more that year or any this happens in.

Save outside in cash and S&S ISAs, pay off your mtg as well and you will have a nice retirement.

I agree.

Looks like you've missed out on a good scheme in the past but that's water under the bridge. Yes, put the max into this scheme as your first choice then a share-based ISA for any additional money you want to save for your retirement.