Saving for retirement

Puddylove

Hi all
I am more than 20 years from retiring, and will have the full state pension entitlement by then, as well as a Final Salary pension with USS.
I have been thinking of putting aside a tiny bit of money (£100 a month initially) to save towards the future - but what is the best way to do this?
Is there any advantage in doing it as another private penion?
Forgive my lack of knowledge about these things - and thanks in advance for advice.

Puddylove x

jem16

Puddylove wrote: »

Is there any advantage in doing it as another private penion?

That is a possibility but unless you are a higher rate taxpayer then it's probably not the best option as you will get 20% tax relief now and pay 20% tax in retirement. It may also take you through the age allowance which would see you not being entitled to some/all of the higher personal allowance.

You might want to consider a S&S ISA.

atush

I would say it depends on what other savings and investments you have outside your pension.

Do you own a home, and have a mtg? what is the rate? Do you have 6 months spending in cash savings? So you have equity savings such as a S&S ISA or an investment trust savings plan?

It may be worthwhiole saving into a personal pesnion (or making sure your spouse has one if married) but all those other itemsneed seeing to as well.

Pensions are great with tax relief, but you can't access any of it til age 55 so savings outside a pension that can be used for everything from house to cars to holidays to university to retirement are good too as they are more flexible.

Puddylove

Thanks jem16, and atush.
I think you are both right that I'd be better saving where I can access it especially as I am already paying into one pension with work.
I'll look into both S & S and cash ISAs as a first step.
P x

Nearly_Old

20 years prior to retirement is a good time to start, we started 15 years ago and I took a redundancy / early retirement option last year and my wife retires this September.

We started with Tessa accounts that then became Cash ISAs and when we had 12 months expenditure saved we each started a S&S ISA. We paid monthly into the S&S ISAs, starting at £75 each and built it up to £250 each over the years as we used our cash ISA allowances first. We had also started non ISA savings and when we had accrued a reasonable sum we moved the money into term fixed rate accounts.

It didn't seem all that much in the first few years but if the money is left alone the interest (what little there is at the moment) and the regular payments do mount up. We have dipped into the savings a few times (3 trips to Australia) after all there has to be some balance between work / saving and enjoying life. Like you we have always taken advantage of our various employer's pension schemes and with our old age pensions these will provide our basic needs. So all the savings are now there to be enjoyed

So my advice is save regularly, if you're not sure about investing in a S&S ISA contact a few IFAs for advice, or ask on here. But remember to have some fun along the way.

Puddylove

Thank you 'nearlyold' (great name) - your plan sounds as though it's been perfect for you - and would work for me too, I hope.
I've got some huge vet bills to pay for my beloved horse (lost her though) but will be able to add more to savings in a year or so, if all goes well.
Thanks again.
P x

Nearly_Old

Sorry about your horse - my niece in Ireland has a horse that she dotes on but its quite scary watching her when she is out hunting. Hopefully the plan will work for you and another horse will come along ready for your retirment - if not before. My retirement present to myself was a 99 2.8 litre Z3 - the James Bond car from Goldeneye and having the savings in place I was able to buy it 4 years before I actually retired.