People in their 30's - future financial plans?

adonis10

AlanP wrote: »

I would suggest anybody UNDER 40 opens a LISA, even if only with a notional amount, whilst it is on offer to them as it is "time/age limited".

Who knows how useful it may be in the future?

Access to a pension could be put back to 61/62 or whatever at some stage by a future government, especially if access is tied to State Pension Age - 10 years as has been mooted.

If that happened a LISA attracting 25% gov't top up (so equivalent to a pension for a BR taxpayer), accessible at Age 60 would come into it's own.

If you don't already own a property then you have the option of using it for that as well obviously.

Flexibility & Options are what you want - speaking as someone approaching the "take the money" stage of life.

Good point about getting one opened even with a notional amount. No harm in just getting one sorted now and spending the rest of this tax year researching, taking advice and deciding what is the best option. I will do that and then it's done and I can focus my mind on how much to put in and in what funds.

Already a homeowner so would be going for the retirement isa option.

List_Maker

Whilst sorting through some pension admin for work it got me thinking and I have ended up here.

So for me:
30....... 42k
Company Pension: 3% Ep 5% Ee Current Worth = £8500
Private Pension: 2% Current Worth = £1500


Saving for a house is my current aim, after this year is out the way (holidays! opps) should be putting in around £1200-1500 pm away.

Once on the housing ladder £1k per month can be split between different options.
Compared to my peers I am doing pretty well. All around the same salary range, some not saving into a pension at all, others only putting in 1.5% and spending the rest on life.

I'd say I have another 30 years until I would like to retire, so who knows what will happen.

Malthusian

Mutton_Geoff wrote: »

This is a helpful read for the under 40's - http://www.morningstar.co.uk/uk/news/148494/how-to-invest-in-your-20s-and-30s-get-over-the-present-bias.aspx

"Aged 40 or younger? The chances are there will be no State Pension by the time you retire." Decided not to read any further. Then I did, to check whether they're being ironic - they aren't. But it continued with another gem - "Wiping that kind of liability off the Chancellor’s books would be a welcome move for any political party." It would be the death sentence of any political party.

It is more likely that the State Pension will be expanded to all working age adults (at a reduced rate) to solve the benefits trap - it's called Universal Basic Income - than eliminated.

I realise that the aim of that sentence is to shock under-40s into paying into a pension, but I have never believed that bullcrap is a good foundation for financial planning.

RuleTheWorld

not sure why there are always comments about oh but the state pension is not going anywhere?

means testing it starting it off at something like HR tax payers don’t receive it is hardly that unlikely and would gain as many votes as it would lose imo.

also I would see at some point a complete break from any link between personal pension and state pension i.e. take your own pension at 55 (or 57) but your not getting the state one until 71

carlskinner1

Really enjoyed this thread, I'm 26 so much closer to my age than the majority of threads.

I'm been extremely fortunate in a sales role which is giving us a big early boost in our financial wealth:

Me- Basic £56,000 + Commission between £50-100k extra
OH- Salary- £31.5k

House- £350k (£110k equity)
Stocks and Share ISA- £75K
BTL- £230k (£80k equity)
Plus two paid off nearly new BMW's.
My pension- £25k (only started 18 months ago)
OH Pension- £15k

We just remortgaged and decided against moving with uncertainty (in my eyes) around the global market and house prices, mainly with Brexit and US/ Korea playing battle.
We hope to be in a position in 2-4 years to be able to sell my BTL, raise a bigger cash sum to enable us to buy our forever home which would cost circa £650-700k and put down a £250k minimum deposit.
With a bit of luck house prices will drop a bit and our forever home will come down in a price, 5 years ago they were under £500k! This will mean we have our forever home by 30 and will be paying off the mortgage like mad to hopefully get it paid off in 20 years, before we are 50.

My current goal is to be in the position to retire at circa 55, which means investing heavily in my pension now. A lot of variables with my job though, high turnover of staff and commission isn't guaranteed, but we're very lucky at the start we've had.

Hopefully this thread continues!

stoozie1

carlskinner1 wrote: »

Me- Basic £56,000 + Commission between £50-100k extra
OH- Salary- £31.5k


My pension- £25k (only started 18 months ago)
OH Pension- £15k

To obtain 40% tax relief, would it not make sense for you to move the ISA money into your pension over the next 2/3 years?

Lokolo

Yes pension over ISA for Carl. His OH should be putting money in both ISA and pension. He hasn't gone into the detail of where the money is going and coming from though.

I would also hope that the BTL is in tenant in common with 99% in the OHs name (why pay more tax than you need to). But if selling the BTL in 2-4 years then it won't be too much of an issue.

Other than that it is a good position to be in. But it is a sales role which I suspect will be one of the first incomes to reduce if things get tough in the economy.

Abatement

Myself and partner 34 and 33. Currently fortunate to earn very healthy salaries (180-200k total depending on bonuses, with partner working part time). Current joint position is: 250k in pensions (c. 150k and 100k respectively), 180k in equity investments (mostly in ISAs), 300k in house equity based on purchase price (although probably closer to double that based on current valuation) and around 20k cash.

Currently contributing heavily to pensions, but probably need to ease off on that a bit with the lifetime allowance in mind. Need to make a couple of decisions e.g. where to live in the long term and whether to send kids (x2) to private schools. Don't have a clear goal/path to retirement, but don't see ourselves working into our 60s certainly.

carlskinner1

@Stoozie,

The ISA funds will be used as deposit on our next house purchase, which is why it hasn't gone into my pension, but yes otherwise would definitely make sense.

Merlin's_Beard

Am 30 and a bit depressed reading this thread!

Pension still only has a notional amount in (workplace bare minimum with mandatory enrolment, and a newly opened SIPP this year). So will definitely be working to retirement age, whatever that may be when I get there.

Not a homeowner, will all savings essentially going towards deposit at the minute. Hopefully once I'm a homeowner and not racing against house price rises more can go to pension.

On a career path with no real hope of ever becoming more than a basic rate taxpayer.

And so far behind on £34k, which is a more than average salary!