Dipping a toe in the water . . .

MadMat

gadgetmind wrote: »

I've always bought cars with cash as I start saving for the next one as I empty my car account to buy the current one.



What do you mean by "long term"?
Are you ever likely to need to raid this at short notice?

Anyway, watch fees as until your pot grows, you might be better off with a fund with percentage fees than a tracker that might have fixed fees.

I'm 42 in a couple of months. To me the long term would mean my mid 50's by then my kids will be grown up and hopefully self sufficient and I'll be able to slow down and try to maybe even live one of my dreams!

I'm preferring an isa to a pension as being self employed in have no employer to contribute and I'm not keen on the inflexibility of a pension when it comes to payout time!

Mat

westy22

I have a monthly direct debit starting on Feb 7th for £100 into my S&S ISA that the Vanguard fund is held in so I am sure it will become clearer how this works to me when the first monthly payment goes in.

Your monthly DD will be credited to your HL account where it will sit as a 'Pending' transaction for a couple of days; then it will switch to 'Trading' for another couple of days. By about the 5th day there will be a contract note available to view and the fund purchase will show as completed and you will then be able to view your holding, its cost price and its current valuation.

innovate

MadMat wrote: »

I'm preferring an isa to a pension as being self employed in have no employer to contribute and I'm not keen on the inflexibility of a pension when it comes to payout time!

You'd still get tax relief on your SIPP contributions - 20% if basic rate taxpayer, 40% if higher etc etc.

Though you won't be able to get at the money until you are 55, and you will have to tax at least some of it when you start drawing on the pension funds.

bigfreddiel

MadMat wrote: »

I'm preferring an isa to a pension as being self employed in have no employer to contribute and I'm not keen on the inflexibility of a pension when it comes to payout time!
Mat

so you're happy to throw away 20% that hmg would give you - madness

it goes like this - you give me £100 and I will give you £120 straight away.

of course if you're a higher rate tax payer I'll give you £140 for your £100 - tho' that releif my be ending soon.

you should be investing in a pension and ISAs

rule of thumb - take half your age as a percentage of your salary to pay into your pension - simples

fj

grey_gym_sock

bigfreddiel wrote: »

it goes like this - you give me £100 and I will give you £120 straight away.

of course if you're a higher rate tax payer I'll give you £140 for your £100 - tho' that releif my be ending soon.

well, the numbers are better than that: it's ...

you give me £80 and i'll give you £100.

or, if you're a higher rate tax payer, you give me £60 and i'll give you £100.

but, on the other hand, it isn't £100 "straight away" ...

it's £25 when you're 55, and the other £75 gradually after that, with tax on the £75 at an unknown rate (20%? 40%? 0%? something else?) ... and that's just in general, and if the rules aren't changed first. as they have been before.

putting all your investments for retirement into a pension seems a bit over-risky - i.e. in terms of regulatory risk - to me. putting part of them there seems like a better bet.

takesyourchances

westy22 wrote: »

Your monthly DD will be credited to your HL account where it will sit as a 'Pending' transaction for a couple of days; then it will switch to 'Trading' for another couple of days. By about the 5th day there will be a contract note available to view and the fund purchase will show as completed and you will then be able to view your holding, its cost price and its current valuation.

Thanks very much Westy it helps to know how this will work when the first direct debit is taken and the process to follow as I want to make good use of this.

Best regards

MadMat

I already have a final salary pension from a previous employer, my last forecast said I'm going to get around 7.5k per year from that at age 60. That along with the state pension brings me up to over the 10k per year pension income where pension income would be taxable. So I'm not sure that the difference between pension and isa is so clear cut.

Also, I'm diabetic, which has significant implications for life expectancy, and makes me doubt that i'd ever actually get to spend that extra 20% that on paper a pension gives.

Mat

gadgetmind

grey_gym_sock wrote: »

putting all your investments for retirement into a pension seems a bit over-risky - i.e. in terms of regulatory risk - to me. putting part of them there seems like a better bet.

I'm working on about 50% but would go higher if they'd let me.

grey_gym_sock

MadMat wrote: »

I already have a final salary pension from a previous employer, my last forecast said I'm going to get around 7.5k per year from that at age 60. That along with the state pension brings me up to over the 10k per year pension income where pension income would be taxable. So I'm not sure that the difference between pension and isa is so clear cut.

that does count against pensions a bit. already having enough expected pensions to pay 20% tax on any extra, and only getting 20% relief on contributions.

Also, I'm diabetic, which has significant implications for life expectancy, and makes me doubt that i'd ever actually get to spend that extra 20% that on paper a pension gives.

not so sure this is relevant. would you plan to spend your capital when you can, even at the risk of running out if you do live longer? and would your condition enable you to get a higher rate annuity?

MadMat

grey_gym_sock wrote: »

not so sure this is relevant. would you plan to spend your capital when you can, even at the risk of running out if you do live longer? and would your condition enable you to get a higher rate annuity?

Yes - one of the half formed ideas I have for semi-retirement would require a lump sum of £50-£100k for a property purchase. I've always day-dreamed about running a small coarse fishery general idea is a you buy a lake, and some fish and then generate an income by charging people to fish it!

Mat