Get a grip woman!

Suffolk_lass

I think it is the element of future paying for any consumables and fixing the price that is attractive to us Busy Mee1. We bought a 5-year plan when we bought the car new and that finished last July (I had the first "annual" service after 8 months because I used to commute 100 miles a day so my mileage was high and then it has been annual ever since - now below the level they expect, but we are in the loop). They also do the MOT for free, and I have the certainty that (like yesterday) they will fit me in, if I have a problem. We do the same as you for the other two cars (both bought 2nd hand, from the same dealership), so some and some.

In other news, my retirement lump sum arrived in my account this morning, on Day 1 of my retirement. After all the tales of woe I had heard, I can honestly say they (Civil Service Pensions) have been good and done exactly what I expected. The calculation was 10p different to mine, with which I am happy.

Busy Mee1 you asked to be kept updated - I did put my papers in at the end of August, so well ahead of the four months they say they need on their website. I also sent my acceptance of the quote back by recorded delivery as that was in December, just a week before the schools were starting to break up (at least, the private schools) and I thought with the timing I wanted to be sure they had it. Honestly though, I have not had a problem. My annual Statements have all been wrong so I was not hopeful, but I made it easy for them by making sure the best of my last 3 years (I remain on Classic) was starting on 6th Feb 2016 - so was year 1 of my three years. A little bonus there is that it has already been index-linked and came in at over 3% more than my straight accrued benefits, and will also increase my pension (monthly, not my lump sum) in April, by just over 2% (the CPI rate from Sept 2018). Like a little pay rise!

I have already moved the lump sum about a bit. I moved some to instant saver and £20k to the mortgage account, so that no account has anything like £85k in it. I need to sit and read some of the saved financial articles I have on income generating funds

Karmacat

Sorry about the car troubles SL, but your retirement/pension news is fantastic! Well done you - especially on moving your lump sum about a bit immediately. When I realised how much money I'd lost by doing nothing, I got a shift on, but I'm still in the middle of it.

Busy_Mee1

Thanks for the update Suffolk Lass that is all very encouraging. I will be in a similar position to you in that my best years finished on 1 July 2018 so I will need to retire before 1 July 2121 to take advantage of that. I hadn't realised they would uprate that, so that will be a bonus for me too.

Good point about the £85k limit ....I was going to sit more than that in my mortgage offset account but may need to reconsider that too.

beanielou

Good news today

Starmummy

Hi Suffolk,

Lovely to 'meet' you.

I've read your diary from start to finish over the past couple of weeks. It's such a lovely read, a bit like a novel. I'm in Suffolk too so I've been looking for clues as to how local you are. Alas, I have no idea. There is no shortage of thatched cottages with fabulous gardens around here.

It's been an education learning all the complexities of your retirement plans. It is something I have started thinking about and saving for, although aged just 30 I have a way to go.
I would like to take early retirement as Mr S is almost a decade older than me. The thought of retiring at 68 (SPA) to potentially become a carer to my (what will be) 77 year old partner does not appeal, I'd like to retire/ or at least part retire when he does, he is also not planing to work until SPA.

Between us we have got some investments, our house, a rental, and some savings (all his) and I have a fairly healthy pension pot for a person my age.

Anyway enough of a ramble for now.

Enjoy retirement lovely.

SM

Suffolk_lass

Hello Starmummy, nice to "meet" you and welcome to my ramblings. If you want to retire early yourself, you need to look at how you plan to finance yourself in that gap between working and when you draw your pension. It is known as FIRE (Financial Independence, Retire Early) and you are the perfect age to be planning and saving for doing this.

I have spent much of today re-reading articles I have saved from the finance pages of newspapers and bloggers I follow to check out what I am going to do with my lump sum now I have stopped work. I have made some notes on funds to invest in, and although there is no guarantee that past performance is going to deliver in the future, I have come up with a collection of funds I intend putting money into. I think I will post on here as I go so that my investments are transparent (and easy enough for others to see). I am not sure at this stage if my plans are sufficiently diversified, but as I plan to go for funds rather than individual shares, and I am looking primarily for income (that is an age and stage of life thing), rather than capital growth, I think I am nearly there. I need to consider whether I plan to top up our pensions with dividend income or whether we will reinvest it, or hold it in the ISA wrapper to decide later. I have until the beginning of April to put the first lump into a S&S ISA.

I am also going to do some research on which platform to go with (I have a bit of money with Fidelity already, so I will start by looking at them). DH and DS each have a Charles Stanley Direct ISA account and their platform charges are low but I think they charge a minimum fee for each transaction that is relatively high so not a given that this would be my choice. I have also considered Hargreaves Lansdown because their platform is very straightforward to use and I have previously done my research there before buying shares for DS. I have recently read that their relationships with some funds are in some way tied up, which I want to look into. I want any advice to be transparent and honest, not reflecting a relationship where a fund-manager pays a platform to promote them over others. Anyway, you get the idea. More to consider.

What I have done is plunge a £20,000 overpayment into the mortgage so when I report next week, our mortgage will be dramatically less than it was. I have contacted Julicorn, who runs the Mortgage Free Wannabes 2019 thread, to increase my target by that amount

enthusiasticsaver

Suffolk_lass wrote: »

I have spent much of today re-reading articles I have saved from the finance pages of newspapers and bloggers I follow to check out what I am going to do with my lump sum now I have stopped work. I have made some notes on funds to invest in, and although there is no guarantee that past performance is going to deliver in the future, I have come up with a collection of funds I intend putting money into. I think I will post on here as I go so that my investments are transparent (and easy enough for others to see). I am not sure at this stage if my plans are sufficiently diversified, but as I plan to go for funds rather than individual shares, and I am looking primarily for income (that is an age and stage of life thing), rather than capital growth, I think I am nearly there. I need to consider whether I plan to top up our pensions with dividend income or whether we will reinvest it, or hold it in the ISA wrapper to decide later. I have until the beginning of April to put the first lump into a S&S ISA.

I am also going to do some research on which platform to go with (I have a bit of money with Fidelity already, so I will start by looking at them). DH and DS each have a Charles Stanley Direct ISA account and their platform charges are low but I think they charge a minimum fee for each transaction that is relatively high so not a given that this would be my choice. I have also considered Hargreaves Lansdown because their platform is very straightforward to use and I have previously done my research there before buying shares for DS. I have recently read that their relationships with some funds are in some way tied up, which I want to look into. I want any advice to be transparent and honest, not reflecting a relationship where a fund-manager pays a platform to promote them over others. Anyway, you get the idea. More to consider.

What I have done is plunge a £20,000 overpayment into the mortgage so when I report next week, our mortgage will be dramatically less than it was. I have contacted Julicorn, who runs the Mortgage Free Wannabes 2019 thread, to increase my target by that amount

We invested in an income portfolio from pension lump sums plus stocks and shares isas. We went with multi asset, well diversified and low charges when choosing funds. They are all down due to stock market performance but of course that is all good for you as you will be able to buy low. We are getting on average around 4% income so strangely even though the capital values are down on last year the income seems to be holding up.

Good idea to make a lump sum overpayment on the mortgage. Getting lower now.

Karmacat

I think I need to pay particular attention to this information! Good for you on researching properly, SL.

Suffolk_lass

OK, here we go.

I have been looking at dividends from shares and found a list of the top shares in the FTSE for dividend payout. However, then I found an article I had saved that talked about the pressure on some of these companies to maintain or improve their dividends and they are taking away more of their capital to maintain their dividend levels. So for me, this increases the risk exponentially. I can see how you might sacrifice a bit of capital growth for an odd year, but not year on year.

So for me, at this stage, no longer working, and looking to top up a reasonable pension, I think my focus will be on bundled funds, in preference to individual share holdings in companies. So I have been looking at the different types of bundled funds. I have not finished yet but I will report back soon.

Just to add that when we did the draw-down of DH's 25% TFLS from his DC pension last February, the man from Scottish Widows who talked us through it all (and explained that the other 75% would all be taxable), also explained that they wanted to move our (his) residual pot into a lower risk fund (maybe 2) that held a higher proportion of cash and bonds, instead of most being in equities (shares). Our timing for this was excellent, but not by design, as the Stock Market had a bit of a wobble and has still not got back to those levels. This should bode well for this pot but more crucially, it spells out that the professionals who look after our money, are likely to be far better at determining the mix of shares, bonds, gilts and cash that they hold in their funds.

This underpins my decision to choose a range of funds.

More about these a bit later...

enthusiasticsaver

I agree using funds rather than individual shares which is the riskiest way of investing and our thinking too. We keep our main portfolio in passive low cost global index trackers in both fixed term investments and equities. We therefore used the same philosophy with our income portfolio but went for managed on the grounds that when looking for income rather than growth some expertise is needed to decide where is best to invest. We went for Artemis monthly distribution and Premier multi asset in the end as I am too risk averse to invest solely in equities. They are both multi asset which are less volatile and the income received is relatively stable. The overall value of the portfolio is down since last year due to a combination of stock market performance, global economic uncertainty and currency fluctuations. The income is stable though so I am not concerned for now.

Presumably your DH will wait until he retires before drawing down on the remainder of his pension? If he withdraws enough to keep below his PA each year presumably then he won't pay tax on it?