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Retirment Planning at (nearly) 30 - Help Please!

Hi - I will be 29 soon and am worried I'm not making the most of my opportunities to plan for retirement. I don't have much spare cash and, as much as I would like to be mortage free, I feel its important to plan for the future when I can no longer work, so here are the basic facts:

Previous pension fund (Cardiff University Pension Fund): £3242.80
(this can be transferred into a new employers scheme, personal pension or approved insurance policy)

Once I left Cardiff Uni I had a year and a bit without paying anything. In Feb 2007 I decided I wanted an Ethical Pension and went through and IFA who recommended Norwich Union. I now pay £50 of my net salary a month, which meant my total contributions (at the time) worked out at £64.10 with tax relief at 22%

According to their estimates I would end up with £64,100 at 5%, 100,000 at 7% and 161,000 at 9% (I'm guessing 9% is very unlikely??). The AFC is 1.4% going down to 0.95% after 10 years.

I admit I don't have a clue when it comes to pensions and don't even know how much is a decent amount of money to retire with. I just want to make sure I don't have to rely 100% on the state pension (if there even is one) when I retire.

If anyone has any tips or advice on whether I should carry on with the stakeholder or not and what I should do with the Cardiff Uni fund (is this not effectively "dead money"?) I would really appreciate it as I have a feeling I could be burying my head in the sand here.

Comments

  • dunstonh
    dunstonh Posts: 118,565 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    According to their estimates I would end up with £64,100 at 5%, 100,000 at 7% and 161,000 at 9% (I'm guessing 9% is very unlikely??). The AFC is 1.4% going down to 0.95% after 10 years.

    Sounds like the NU stakeholder. 9% is not unlikely. Here are the last 5 years discrete performance on the NU Equity Ethical fund. 28.79, 14.34, 22.09, 11.38, 9.94. There was a minus 20 and a minus 18 the two years before that but a plus 38 in its first year. The 8 years it has been available have seen it return 96.77%. So, 9% has been achievable.

    However, it is best to work on 7% as a guide. The industry has learned over the years that rather than give higher projections and come in with less, it is better to do it that other way round. With equities, 5% is a possibilty, 9% equally so with 7% being a sensible projection.
    don't even know how much is a decent amount of money to retire with.

    Everyone will have different opinions based on their own budgets.
    If anyone has any tips or advice on whether I should carry on with the stakeholder or not and what I should do with the Cardiff Uni fund (is this not effectively "dead money"?) I would really appreciate it as I have a feeling I could be burying my head in the sand here.

    Asking the IFA would have been the best option. However, the answer 99% of the time would have been to leave the occupational scheme where it is.

    If you want ethical, then the NU pension does have a good range of ethical funds and the fund based discounts will make it good value later in the term.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Thanks dunstonh - so it sounds like I'm not doing much wrong. It was important to me to invest ethically.

    I did ask my IFA about the CU pension and he said he wasn't allowed to advise on occupational schemes. Based on what you and others have said to me its probably ok to leave it where it is.
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