Starting a private pension - when is 'too late'..?

chucknorris

Charlton_King wrote: »

I guess everyone's path is different. My wife and I invested heavily in acquiring properties for rent throughout the last 25 years and we now have a small stable of (mainly) flats which provide our main income in retirement along with pensions. We had to sell a couple in order to pay off our mortgage and eliminate our kids' student loans.

20/20 hindsight is a great thing but property - in this overcrowded island - never looked to us anything other than a
All in all we're happy with the situation. My wife still has a few years to go, thanks to Mr Osborne, until she too can start collecting her SRP.

Not that different! We have 8 investment properties in London (I bought mainly in the early 90's, my wife a bit later). We have recently put 2 on the market, I am getting out over the next few years (my wife is 11 years younger than me and will stay in longer). But we don't have children, so we have to sell at some point.

But I was asking mainly about lifestyle, hobbies etc. What you originally envisaged doing in retirement compared to reality (maybe too early to comment though). My finances are well sorted, I am thinking more about enjoying my retirement years.

chucknorris

OP you do realise that you can only invest 'relevant income' in a pension? Which is mainly earned income, so I don't think pensions are going to be much of an option for you (given your wealth), apart from (gross) £3,600 per annum for both you and your wife.

Charlton_King

chucknorris wrote: »

But I was asking mainly about lifestyle, hobbies etc. What you originally envisaged doing in retirement compared to reality (maybe too early to comment though). My finances are well sorted, I am thinking more about enjoying my retirement years.

Our needs are fairly straightforward. We're family people and enjoy being with our grandchildren, for example.

I think, if we were the sort for whom three foreign holidays per year and a change of car every other were de rigueur, we'd be finding things difficult. As it is, for an ageing birdwatcher and a charity-shopaholic, we seem to be 'comfortable'!

Charlton_King

chucknorris wrote: »

OP you do realise that you can only invest 'relevant income' in a pension? Which is mainly earned income, so I don't think pensions are going to be much of an option for you (given your wealth), apart from (gross) £3,600 per annum for both you and your wife.

My italics.

Oh, I hadn't realised that. So what then is this 'relevant income'..?

chucknorris

Charlton_King wrote: »

My italics.

Oh, I hadn't realised that. So what then is this 'relevant income'..?

Mainly 'earned income' (salary) there are other things but not relevant to me, so I can't remember what they are, I think that it isn't an avenue that you are going to invest much in.

Charlton_King

chucknorris wrote: »

Mainly 'earned income' (salary) there are other things but not relevant to me, so I can't remember what they are, I think that it isn't an avenue that you are going to invest much in.

Ah, yes... looks like I would be stymied there, then. I wonder how many people aren't aware of that and simply let their private pension contributions continue well past the point when they have stopped receiving enough of this 'relevant income'.

AlanP_2

With no "relevant income" you can pay in £2880 nett which HMRC make up to £3600 p/a.

Whole long discussion here:

https://forums.moneysavingexpert.com/discussion/5580163

Charlton_King

AlanP wrote: »

With no "relevant income" you can pay in £2880 nett which HMRC make up to £3600 p/a.

Whole long discussion here:

https://forums.moneysavingexpert.com/discussion/5580163

This interests me as my wife is planning to stop work for a 12 month period in June. I had been wondering whether there might be any implications for her ongoing private stakeholder pension.

From what you say, provided her nett contributions amount to a maximum of £2880 in any one tax year, she will continue to benefit from the tax relief she's currently getting. Have I got that right? Presumably this also applies to me as a non-earner now: I can make contributions up to £2880 and these will receive the tax top-up...?

chucknorris

AlanP wrote: »

With no "relevant income" you can pay in £2880 nett which HMRC make up to £3600 p/a.

Whole long discussion here:

https://forums.moneysavingexpert.com/discussion/5580163

I did point that out (above) when I first raised the issue:

chucknorris wrote: »

so I don't think pensions are going to be much of an option for you (given your wealth), apart from (gross) £3,600 per annum for both you and your wife.

atush

Charlton_King wrote: »

Surely there is a significant difference between contributions to a pension and those to, say, an investments ISA... or does HMG come along and turbocharge one's ISA contributions in the same way, then..?

Contributions to a pension get tax relief on the way on, and 25% TF on the way out. S&S isas get TR on growth within, and pay out tax free (but money going in has been txed.

Rental properties get neither So are very tax inefficient, both growth and income. So you should be able to do better than property with either S&S isas or pensions, depending on what you choose to invest in.