Changing digs and coming out of my cave... for a wee while atleast :)

elantan

Just now I am putting £500 a month into the pension so the government is topping it up to £625 ... when we are mortgage free we will free up £1150 a month ... added to that my income will go up by £800 a month ... the intention is to put all my wage by for saving and to slowly ( by £25 a year) put the pension up ... added to that when i am qualified i will pay an extra £100 a month into the pension and recieve £200 from my employer making it approx £1k a month into pension and £1-1.5k a month into savings for retirement ( with approx £3-800 a month for savings for holidays home improvements cars etc ... obviously the higher the end of the scale I would need to reduce the retirement savings)

I know the 3,5% is being pessimistic but like you say better to be pessimistic rather than optimistic ... I am not sure though that the growth of 4% is going to be achievable all the time ... I do believe I need to re look at all my funds etc as I am not sure if they are in the right place

elantan

Have to admit I am not even considering student loans as of yet, I dare say when I get a decent job I will worry about it lol ... but at 1.5% like you I aint in a rush

edinburgher

I'm convinced that it should only be getting topped up to £600 - am I going mad? (Wouldn't be the first time).

When you increase your pension, I'd probably only raise it enough to get max employer match, anything else you can bung in a SIPP.

I'm amazed that you pay in £500/mth as a student. I get £300/mth between me and employer and I work full-time in a job that pays a pretty reasonable salary!

elantan

Well when I first started paying I was working, I have not long left that company, the aim though is to continue paying in £500 ( all my contributions) to try and get a decent pension when I retire at 60 ... put it this way no one else is willing to pay money into it for me, so the onus falls to me to provide for my retirement

I have thankfully managed to pay the £500 a month for the last two months and hope to continue it for the remainder 34 months


incidentally i should have said it is a SIPP the money is in ... well not all of it tbh some is PP and some is Buyout ( employers) and one is even NEST ( how useless are those things)

elantan

PS i thought it would be £600 but it is 625 which is handy as i keep the 25 for charges lol

edinburgher

It is 20% tax relief, I'm just doing my sums wrong. £125 is 20% of £625

Do you use a SIPP then?

elantan

Yep i use a SIPP its 20% relief going in but still 25% tax free on removal isnt it?

incidentally i should have said it is a SIPP the money is in ... well not all of it tbh some is PP and some is Buyout ( employers) and one is even NEST ( how useless are those things) ( copied from above which was added in later )

Still working out what funds are best to use for the SIPP .... i have some in Vanguard 60 and Vanguard 80 plus a few other things ... i'm looking for growth that beats inflation and charges just maybe 2-3% a year after all costings .... nothing fancy or risky

edinburgher

Yup, 25% tax free on removal, so 15% effective tax rate assuming you can stay below higher rate tax as a pensioner (I know, chance would be a fine thing!)

Also a Vanguard fan, try and keep c. 70% in equities, so roughly a 50/50 split between the two LifeStrategy funds you've mentioned + some bonds to balance out my riskier 100% equities employer pension.

Karmacat

El, thats really really good! I agree on the 500/625 after tax allowance - I put £5k lump sum in last March, and it promptly became £6250

You've done so well from your startup point - and the things you've spent out on haven't exactly been hair extensions and nail varnish, y'know

elantan

edinburgher wrote: »

Yup, 25% tax free on removal, so 15% effective tax rate assuming you can stay below higher rate tax as a pensioner (I know, chance would be a fine thing!)

Also a Vanguard fan, try and keep c. 70% in equities, so roughly a 50/50 split between the two LifeStrategy funds you've mentioned + some bonds to balance out my riskier 100% equities employer pension.

yep thats what i'm doing

i plan on not paying any tax at all on retirement Ed.... keeping my pension drawdown below the tax threshold and topping up with my ISA ( which i will have paid tax on before i put the money into the ISA but wont pay tax on removal )

I have taken a wee punt on some RBS shares recently not much just enough to keep me interested and was thinking of investing in some oil transporter companies ( unsure yet still deciding) but then it will be back to vanguard for a bit.


Have been thinking though of just investing my £500 a month and saving the £100 ( keeping the £25 for fees) so that should i feel something is worth purchasing i will have some funds to purchase rather than having to wait till the monthly money arrives