Multiple Bank A/C Saving Scheme

caveman38

Deleted post.

caveman38

Unfortunately I cannot seem to cut and paste the plan but it is for example.

103K Yr1 withdraw 5K balance 98K +3% = 100,940
100,940 withdraw 5,150 balance 95,790 +3% = 98,664
98,664 withdraw 5,305 balance 93,359 +3% =96,159

Yr 10 - 75,676 withdraw 6,524 balance 69,153 + 3% = 71,226
Yr 19 - 22,129 withdraw 8,512 balance 13,617 +3%=14,025
Yr.20 - 14,025 withdraw 8,767 balance 5,258


It would be more with 4% and could be increased to 7.5K to start and last only 15 years.


Of course this may only last a few years before something else would have to be used . But at least the capital is safe.
Perhaps I explained badly but my intention was to start with 5K not 8K Andy.

xylophone

Will you be eligible to draw your state pension at the end of 2016?

What is your wife's position in regard to state pension?

caveman38

Yes I will but she has another 4 years officially but may pack up work and draw on this fund if she feels the need to cease working.

xylophone

You are already receiving an occupational pension?

Has your wife obtained a new state pension statement?

Will she be receiving an occupational pension?

If she has no occupational/private pension provision, had starting one been considered?

Changes to tax relief may be on the way but she might consider paying up to her net earned income for this year into a SIPP?

If she opened one with HL she could opt to hold the money in cash and withdraw after a year or later - the tax relief would be more than she could earn in interest on a similar sum?

http://www.hl.co.uk/

Or she might regard it as a three or four year plan and consider using funds?


She could start opening the interest paying current accounts now.

An easy option is opening 3 BOS accounts which can be funded from each other - SO from A to B and from B to C and from C to A on the same day.
This uses £15,000.

A Santander 123 uses £20,000.

2 Tesco uses £6000.

I TSB uses £2000

I Lloyds Club uses £5000.

1 Nationwide Flexdirect uses £2,500.

If she opens a Tesco Internet Saver and Instant Access Saver she can set up the necessary DDs for Santander and Lloyds.

She can cycle £1500 a month from NW to Lloyds, from Lloyds to TSB from TSB to Santander and back again.

She can pick up the monthly interest and pay it into the Tesco Internet Saver or any other savings account.

Goldiegirl

This £100,000. Is it your only capital, or do you both have other money, and other pensions apart from your state pension.

i can't help thinking your plan for the £100000 is flawed.

You don't sound very confident about the admin such a large amount of accounts would generate, with the monthly transfers etc.

I don't think there's any point in looking at what other people do. People's flow charts are easy for them to understand, but look very complicated to other people.

Most people start small, with a couple of accounts, then build up gradually, so they can keep track of their transfer system. That way, it's very simple to build a system where you know exactly what is going on.

As you don't sound very confident with it, maybe it'll end up being a rod for you own back to carry on with this plan?

Also, I don't think I'd build a long term pension plan based on interest on current accounts - who knows how much longer interest will be paid at the current level on current accounts.

I have a few current accounts and I'm gradually opening more. But the interest I earn is just a nice bonus - it's not money that I'm planning to live on.

If I was trying to generate income to live on I'd be looking at other investments. I think you'd be better off talking to an IFA. you can tell him you are very risk adverse, and see what he advises.

caveman38

Thanks for all the information and advice. Although it is long winded and involves a lot of accounts and as has been mentioned a lot of management too. It is the nearest I have come to in achieving a 3% guaranteed interest per year on the drawn down balance.I could quite simply have it in 2%+ ISA's etc. No management and just accept fewer years or less than 5k as the starting figure.
It wasn't till I found the 5% loophole thread that I realised that my 3% was achievable but perhaps without knowing how long it would last. There is not a problem in doing this for a short period and then find another method when they pull the accounts.
I am not as naïve or unsure as I may come across but am risk averse. Since I am not convinced in the buoyancy of the market for much longer.
Again thanks and I am not being ungrateful.
I just wanted confirmation that my plan in post 22 was OK if not a bit heavy in accounts - perhaps some modifications to that will be required plus small amounts in other plans.
I don't think I need to be ambitious to turn 100K into a scheme that will give her the figures I have proposed.
I have my own pension and will have a State one too. We have other funds and all that is wanted is that she along with her State pension will have her own money which will not too different from what she earns now.

Archi_Bald

I still think you and/or your wife should be seeing an IFA. Your arguments against using equities, and for staying entirely in cash show that you have a very limited understanding of investments, and specifically pension investments.

AlanP_2

What happens when the £100k capital gets depleted and there is nothing to draw on?

You are aiming for 15/20 years of withdrawals from what I can see and your wife is ~61/62. Typical life expectancy for a female her age would be more than 77/82 I would think (can't find the relevant data online just at the moment).

The rule of thumb which seems to be used most often seems to be have 2-3 years of retirement income in Cash, with the rest invested somewhere.

Sell a proportion of the investment each year to keep the 2-3 year cash pot topped up BUT NOT if markets have fallen.

So for example you might go 18 - 36 months without selling and then top up. That goes some way to avoiding the situation where you have to sell as you need the cash even if markets have fallen off a cliff.

Income generating ITs and the like can help to smooth this out an, like others have said, I would be talking to an IFA if I was in your position to advise on the options open to you.

caveman38

AlanP wrote: »

What happens when the £100k capital gets depleted and there is nothing to draw on?

You are aiming for 15/20 years of withdrawals from what I can see and your wife is ~61/62. Typical life expectancy for a female her age would be more than 77/82 I would think (can't find the relevant data online just at the moment).

The rule of thumb which seems to be used most often seems to be have 2-3 years of retirement income in Cash, with the rest invested somewhere.

Sell a proportion of the investment each year to keep the 2-3 year cash pot topped up BUT NOT if markets have fallen.

So for example you might go 18 - 36 months without selling and then top up. That goes some way to avoiding the situation where you have to sell as you need the cash even if markets have fallen off a cliff.

Income generating ITs and the like can help to smooth this out an, like others have said, I would be talking to an IFA if I was in your position to advise on the options open to you.

Again thanks for the advice, but. To be honest looking beyond 20 years has not entered my head. I will be 85 if not pushing up daisies and as you say she will be 82. Having this income early in her retirement was so that she wasn't going to lose her spending money. Although she works it is not necessary to the running of the house. Her wages are her money, admittedly she buys some bits for the house but otherwise it is for grandkids, hair, clothes etc.
She will have the house we live in (London Suburbs) 1/2 my company pension, her own state pension and any monies I have left from my pot.
By 2036 I'm sure there will be further changes to the pension system and maybe there won't be any State Pension if you have assets. I'm afraid I cannot/won't worry about any of those probabilities and just plan for the years I believe we will be fit enough to need money.
We may have compulsory house sharing to help with our ever growing population. Or even a Liverpool Pathway for 80 year olds. Who knows what it'll be like 20 years from now.