Only have a State Pension

smokingsxr1000

Justme111

I've massively oversimplified my determination and you're right without all the numbers it's not a full answer.

The OPs mortgage has a rate of ~2.3% and my fix would have cost an additional £10 per month. Small change looking at the full picture and cheap insurance against rate rises.

Triumph13

A quick calculation shows that if you put £50 a week into a pension, plus tax relief, for 20 years and averaged a reasonable 4% pa real growth you'd be looking at a pension fund of around £100k. At a 4% withdrawal rate that would give you £4k per year, plus your state pension so basically £1,000 a month at today's prices. How does that compare to the number you came up with when you stripped out your non-continuing costs? Scary?
Don't worry, it gets better. In 8 years your mortgage is paid off. It may be better not to do that, but for the sake of argument let's say you pay it off as normal, then divert that £640 a month plus inflation into your pension for the last 12 years. That gets your fund up to about a quarter of a million and your overall income including state pension to around £18k. Better?

justme111

I actually think OP would been ok with £1000 as she is unlikely to get £3000 net monthly now for her expenses with no mortgage and children related ones to be 1/3 of it.

BLB53

I have been having some very sleepless nights worrying about my future as a pensioner! 'The future' is not something I've ever worried about - I'm a hard worker and have always had enough work/monies to pay for 'the now'.

First of all, don't panic - you can do a lot over the next 15/20 yrs to put a decent pension pot together.

If you can put £300 pm into a sipp the taxman will add an additional £75 pm so that will be £4,500 per year - factor in some investment growth and you could well have over £100K to bolster your state pension.

Do a bit more reading around the subject - some good articles on Monevator http://monevator.com/ and also diy investor http://diyinvestoruk.blogspot.co.uk/ (pensions tab) and then when you are ready make a start - you basically need a low cost sipp provider and something like the Vanguard Target Retirement fund (or Lifestrategy fund) - set up your monthly direct debit and thats about it.

Horsin

Justme111 - Yes, I could live on £1000...but with £3000 I could live like a lady . And I know that my poor heart will not be able to resist a 'younger model' once my old boy has lolloped off to doggy heaven .
Okay, so I have a little.....maybe a lot...of reading to do to become my own IFA. Do you agree with BLB53's points, basically needing 'a low cost sipp provider and something like the Vanguard Target Retirement fund (or Lifestrategy fund)'?
Mortgage rate is currently 1.99%
Savings: some are in a bank account and some are in Premium Bonds. I realise that neither are great, but while getting to this point I have been very unsure about what to do with any monies!?!:o

Triumph13 - I hadn't really thought about the fact that without the mortgage to pay, I could put that money to good use boosting a pension! Is there a particular reason why I may not want to run my mortgage to finishing in 8 years?

BLB53 - how do you make it all sound so simple??? But thank you for reassuring me that I can make a good fund starting from now. I will look at those links...can I come back to you if I have any 'sorting' questions????

nellis10 - wow, you are savvy! 'Living on an egg less' is a great way of putting things I'll keep that one in the front of my mind.
Can I ask why you have gone for an S&S Isa rather than any other investment/pension options?

Horsin

Xylophone - meant to say, I had a look at Cavendish before and found it all reaaaaally confusing made me panic a bit more .
Basic question; what is the difference between a SIPP and a Personal Pension? :think:

nellis10

Horsin wrote: »

nellis10 - wow, you are savvy! 'Living on an egg less' is a great way of putting things I'll keep that one in the front of my mind.
Can I ask why you have gone for an S&S Isa rather than any other investment/pension options?

I have 2 pensions already - 1 is previous work pension and 1 is current work pension. They will see me fit from 67 onwards. What I need to save for now is the years 61-67 (I want to retire at 61, 15 years from now - nice round number of years to save for!!)

So I am spreading my finances across 3 areas - Emergency Fund for immediacy (still accumulating this!!) and that will go in the regular saver accounts.

S&S ISA to maximise non pension savings tax free. I have no savings bar the pension at the moment. And my house is tiny so no downsizing income going to come from that alas.

Pensions for the big long term savings from pension age onwards.

So I figure I need 18K (£1500/month) x 6 years (61-67) = £108K to get me to my state pension age.
Which, if I start today = £600/month needed to save until retirement! Now, that should be very doable without too much hardship and doesn't include any interest I might get on that investment.

colsten

nellis10 wrote: »

So I figure I need 18K (£1500/month) x 6 years (61-67) = £108K to get me to my state pension age.
Which, if I start today = £600/month needed to save until retirement! Now, that should be very doable without too much hardship and doesn't include any interest I might get on that investment.

Also doesn't include inflation. You might need to save/invest a little more unless your interest/growth will at least keep up with inflation.

Calculator: https://www.vertex42.com/Calculators/inflation-calculator.html

BLB53

BLB53 - how do you make it all sound so simple??? But thank you for reassuring me that I can make a good fund starting from now. I will look at those links...can I come back to you if I have any 'sorting' questions????

I think the industry likes to make out it is more complex than necessary but at the end of the day its just a long term savings plan. The more you read around the subject, usually it becomes clearer but keep it very simple.

Choose a SIPP provider (I use AJ Bell Youinvest)

Choose a fund ( I have used Vanguard Lifestrategy 60) but the Vanguard Target Retirement is probably easier.

Set up you starting amount and Direct Debit.

Thats really just about the simplest plan but you can put it together however you want. The important thing is to understand what you are trying to do and have a solid plan you can stick with for the next 20 years.

justme111

Yes I agree with BLB53.
You may want to read this, very similar
https://forums.moneysavingexpert.com/discussion/5613975