Should I employ a financial advisor?

Coed

Hi team,
I am trying to juggle savings/investments with retirement planning. I appreciate this is a vague question, but assuming my limited knowledge of financial matters, should I employ a financial advisor? What 'ball park' should I expect re charges?

Richard

somethingcorporate

Crikey, give us a clue!

You should ring around a few advisors with your situation and requirements and get a few quotes. It depends on a number of things (none of which you have told us!).

bigadaj

You either do some research and learning and diy or employ an ifa.

Oft quoted charges for an ifa are 3% initial and 1% annual reducing to 0.5% for larger sums. Minimum charges are probably £1000, though could be lower if there is ongoing fee potential.

If you supply make detail then you will get some better ideas.

Coed

Hi Folks,
We have around £120000 of which, £40000 in a Maps (growth) portfolio with Best Invest.nthe rest in cash ISA. I plan to retire at 58, next year. I have lump sums and other pensions to cover the time to state pension. What best to do with £80000. I know nothing of stock market! I have opportunity to buy £2000 of additional pension from teachers scheme. Cost £38000. Is this good value for money? Thoughts?

Rich

kidmugsy

Coed wrote: »

I have opportunity to buy £2000 of additional pension from teachers scheme. Cost £38000. Is this good value for money?

For a 58 year-old, more than 4% p.a. after 20% income tax, index-linked, sounds jolly good value to someone who knows nothing about investing. Hassle-free return. You could view it as being the bond-like part of your portfolio, and therefore keep proportionately more of the rest in equities. So good does it sound that I'd check it carefully. Will it really pay out at that rate to a 58 year-old?

But also: Health? Family longevity? Spouse? Ditto for him/her?

atush

Well you have a pension but are a "we'? So does the OH? Are you married? Do you intend to retire early?


As far as I can see, your pension provision is insufficient

Coed

Again, thank you. I will also have around £17000 (after tax) in DB schemes. My wife will have a pension pot of around £80000 in a DC scheme at 59 when she retires (1 year younger than me).
Sadly, the £2000 additional pension is before tax
Coed

kidmugsy

Coed wrote: »

Sadly, the £2000 additional pension is before tax
Coed

Yes, but as I said it's still returning more than 4% p.a. after tax. Index-linked.

While you are at it, should you be topping up your wife's pensions? You would still have £40k available. How much does she earn?

Coed

Hi Kidmugsy,
Wife earns around £30k. I guess if we can add to her pension, this will be taken tax free as she will take home less than £10600?

kidmugsy

Coed wrote: »

Hi Kidmugsy,
Wife earns around £30k. I guess if we can add to her pension, this will be taken tax free as she will take home less than £10600?

If you mean that she can withdraw money from her pension tax-free, in the gap between retiring and drawing her State Pension - yes, exactly.

She could, for instance, contribute to a personal pension an annual £30k, that being her earnings, less the amount she's already contributed to her existing DC pension. For illustration: say the latter is a GROSS £2.5k. So she can now contribute gross 27.5k, which is a net £22k. The provider claims back the difference, £5.5k, from HMRC. So in two tax years, that other £40k or so would be tucked away.

Since she'd start drawing the money out pretty soon, you wouldn't want to invest it in equities within the pension. She could leave it as cash or perhaps invest in short-dated gilts.

P.S. I'm still worried that that figure for your proposed extra pension is wrong. Are you certain that it applies if you retire early, or does it apply only at Scheme Retirement Age (65, presumably)?

Coed

Hi Kidmugsy, my idea is to not take the pension early, but wait until my ordinary retirement age (for the scheme) of 60.
Thank you for the 'heads up' regarding my wife's pension