some money to invest about 80k new pension

worthless

We have some money to invest about 80k, at the moment is sitting in a standard saving account. We are early 40’s with no pension both self-employed.

Ideally I would like to put money into different pot/areas. Rainy day fund 10k, pension 10k, long term savings 10K and BTL 50k.


I cut a long story short we had been looking into getting a buy to let. But now have changed our minds (out priced in our area, 2nd home tax changes, hassle, missed the boat, etc…)

With the upcoming budget, possible changes to pensions, we have been wondering if the best thing to do. I did get some advice but did not come away with any better plans apart from opening a unit trust, and being charged 3% for doing so. The idea of a DIY SIPP appears to be the best route. Or should we open an ISA before April.

Any ideas, I understand that no one has a crystal ball.

xylophone

With regard to the pensions, you might as well wait to see what the budget brings?

You can check your state pension situation - you might as well wait until after the new system starts on 6 April.

You could both use high interest current accounts for your rainy day money.

maximumgardener

Fill up your isa's and put balance into personal pensions. keep £10k back for emergency fund in cash

keep paying into the personal pensions what you can afford, monthly.......its a long game!

there is plenty choice available to fulfil this for you on DIY basis

kidmugsy

xylophone wrote: »

With regard to the pensions, you might as well wait to see what the budget brings?

You can check your state pension situation - you might as well wait until after the new system starts on 6 April.

You could both use high interest current accounts for your rainy day money.

Entirely agree: unless you are higher rate taxpayers, in which case you might be wise to contribute enough to a pension before the Budget (March 16th) to avoid higher rate tax. If you don't want to invest it in a rush, leave it as cash within the pension to begin with.

worthless

Thanks,all
We are both low rate tax.
My understanding is that you can back date pension contributions, is that correct?
Also can anyone recommend an guide for DIY pensions (already have read the MSE one)

kidmugsy

worthless wrote: »

My understanding is that you can back date pension contributions, is that correct?

No; you can't backdate pension contributions to an earlier tax year. You could once upon a time, but that was decades ago.

There is a feature of pensions that might suit you. You can get tax relief on tax you never paid. Example: say you earn £30k and have no other income. You might think that you'll only get tax relief on (£30k - £10.6k) = £19.4k, the part of your income on which 20% income tax is payable. But no: you can make a "gross contribution" equal to all your earnings i.e. £30k. What you do is make a "net contribution" of £30k x 0.8 = £24k, and the provider claims the £6k tax relief from HMRC and adds it to your pot.

But, as xylophone said, it's probably best to wait for the Budget. Before then you can work out what your earnings will have added up to, perhaps chosen a potential provider, and ensured that your money is readily available for use.

xylophone

Also can anyone recommend an guide for DIY pensions (already have read the MSE one)

Any current guide might be rendered redundant by the budget......;)

dunstonh

Although the scaremongering before the budget is quite probably way off the mark about what will really happen. Just as it has been for the last 30 years when they say the same thing every year around budget time.