advise for a doctor with zero financial IQ

ridingrodeo

Hi,
I just want some advise to start with. I am a radiologist working in the nhs since 10 years. 45 years, 2 kids, teenagers
1. I have my mortgage paid off, so sorted out the house,car paid off
2. I have a nhs pension, part 2008 scheme
My financial goals are simple
will need around 2 to 3 K a month post retirement
some issues.
1. I do not with to invest more in the nhs pension as whatever people say about it, the pension is getting delayed and the retirement age is postponed. ERBBO seems to be too much money for less returns.
2. Should one invest in ISAs or SIPPs? If SIPPs, how does one get the money back?? some help here would be very very welcome...would just parking some money in a vanguard fund be enough
3. I thought about an IFA but the charges just put me off...
4. considered a BTL house to give on rent ..

thanks in advance

jennyjj

ridingrodeo wrote: »

Hi,
I just want some advise to start with. I am a radiologist working in the nhs since 10 years. 45 years, 2 kids, teenagers
1. I have my mortgage paid off, so sorted out the house,car paid off
2. I have a nhs pension, part 2008 scheme
My financial goals are simple
will need around 2 to 3 K a month post retirement
some issues.
1. I do not with to invest more in the nhs pension as whatever people say about it, the pension is getting delayed and the retirement age is postponed. ERBBO seems to be too much money for less returns.
2. Should one invest in ISAs or SIPPs? If SIPPs, how does one get the money back?? some help here would be very very welcome...would just parking some money in a vanguard fund be enough
3. I thought about an IFA but the charges just put me off...
4. considered a BTL house to give on rent ..

thanks in advance

At 45, you seem in a sound position.
Obviously, you won't get any kind of binding advice here, because we are not 'qualified' and we don't know enough about you anyway. But here's my starter......
ISAs or SIPPS:-
Both, they are both great tax shelters, each with different limitations. With ISA You can invest £20K per year, per adult, and if that is in stocks and shares, could shelter you from a lot of capital gains tax ( and troublesome calculations ) over the next few decades. Consider looking at HL's offerings, maybe trackers.
For a SIPP, you can invest up to what you earn. There's a wider choice of investments. Consider funds run by Lindsell Train, research HL's top funds and their SIPP platform. Not the cheapest, but pretty good all round. The issue with SIPPS is you lock your money in till you are 55 ( as things stand ) So if you plan to retire before then you'd need other funds such as from your ISA's.
Aspire to avoid paying income tax, certainly avoid 40%. If you can throw most of your salary into Pension AVC's, then you might have a zero paye bill each year as you live on bread and jam. Get it right and maybe not pay tax when you draw the pension.
Use spouse's financial position in your plans.
IFA in your current position might be a bad decision and lead you to invest badly. far better to do your own research and have a dabble. Maybe read investors chronicle, though I think it's not brilliant value nowadays. Scour hl site for guidance.
Good luck in your quest.
BTL, I would suggest you avoid. It's no longer an easy route to riches. Ignore Homes Under The Hammer on TV, which makes it look so so easy.

HappyHarry

Just checking, you’re not opting out of the NHS scheme are you?

jennyjj

HappyHarry wrote: »

Just checking, you’re not opting out of the NHS scheme are you?

OMG. Don't do that. It might be pants, but it's gold plated pants.

hugheskevi

2. Should one invest in ISAs or SIPPs? If SIPPs, how does one get the money back?? some help here would be very very welcome...would just parking some money in a vanguard fund be enough

A SIPP is just a type of personal pension. It is best to start by asking whether pension or ISA, and if the answer is pension then consider whether you want a normal personal pension or a SIPP.

You should assess how much of your Lifetime Allowance you have already used up, and how much you will have used up by the time you retire.

You also need to assess how much of your Annual Allowance you are using each year. The easiest way to do this is to look at any Pension Saving Statements you have been sent (which are different to Annual Benefit Statements). If you have not received one, you can ask your pension administrator for one.

Once you have your Lifetime and Annual Allowance positions, you will know how much extra you can put into a pension.

Generally, a pension will be good if you remain within Annual and Lifetime limits, but you should be prepared not to be able to access the money until age 57. If you can contribute to a pension to recoup lost Child Benefit or lost Personal Allowance then pension contributions are especially desirable. ISAs give flexibility and ease, but no particular benefits aside from tax free growth.

dunstonh

2. Should one invest in ISAs or SIPPs? If SIPPs, how does one get the money back?? some help here would be very very welcome...would just parking some money in a vanguard fund be enough

SIPPs are the advanced pension option. ISAs and pensions have pros and cons. Which tax wrapper fits your objective best?

You have not mentioned spouse/partner. Is there one? If yes, why are you not involving them in your financial planning.

3. I thought about an IFA but the charges just put me off...

I thought about a doctor but it was cheaper to self medicate. I dont know what the illness is or what medication is best but its cheaper...... or is it?

Getting the wrong tax wrapper could cost you far more than the cost of an IFA. Not involving a spouse/partner could cost tens of thousands of pounds or more. The costs of getting it wrong can massive compared to the cost of an IFA.

There is nothing wrong with DIY but you need to do it well to save money. DIY badly and it can be very costly.

4. considered a BTL house to give on rent ..

Do you like paying tax?

Gnoley

Hi, I am also a radiologist , a bit older than you so I was in the 1995 pension scheme. I have taken my NHS pension early as I was nearing the lifetime allowance and also getting increasingly fed up with what is happening in the NHS. Whatever you do don't opt out of the NHS scheme, its still good! I found it quite a learning curve to educate myself about money, never having really thought about pensions etc much before my early 50s. I found it really helpful to read the Monevator website, loads of stuff there about investments etc. If you are in the BMA you can get a free first chat with their pension advice people, was Chase DeVere a few years ago and I did this after educating myself a bit. I also want to a BMA retirement planning meeting which does spell out your options. Others have already said to involve your partner, we have used some of my lump sum to top up my husbands pension and to open a SIPP for him. We also fill up ISAs for both of us. Given that you have kids, you also might have a junior Isa option, which might help when they get older. I found a lot of really useful advice about money in general on some FIRE blogs ( Financial Independence Retire Early). The likes of Simple living in Somerset, FireStarter, The Escape Artist, Finance Zombie, SexHealthMoneyDeath. All UK writers. All different but intelligently written and interesting comments on their articles from readers as well. The finance and pensions fora on Drs Net is occasionally useful, especially about some of the complexities of the NHS pension, which not all financial advisors understand.
Good Luck!

letspretendforaminute

Avoid property like the plague... I know a fair few doctors and along with teachers they have all sunken money into BTL not one has come away smelling of roses. One GP has had to take a second job (GP OOH) just to keep the plates spinning on his Manchester flat empire, he looks knackered. The tax rules are hardly favourable for higher rate payers either. SIPPs are brilliant on the way but access to the pots are tracking the state retirement age less 10 years so you’d be best going half and half making use of your ISA allowance too.

ridingrodeo

Hi,
Thanks for the replies...
1.I am staying in the nhs pension.
2. My spouse works part time, 2 days a week so I am the main earner
3. From the replies I will avoid property . Got enough problems
4. will look into SIPPs ,need some details...
5. Wesleyn seems like a good option for a pension ,plan to look into that..
Dunston has suggested an IFA, but I am a but unsure....

MallyGirl

ridingrodeo wrote: »

Hi,
Thanks for the replies...
1.I am staying in the nhs pension.
2. My spouse works part time, 2 days a week so I am the main earner
3. From the replies I will avoid property . Got enough problems
4. will look into SIPPs ,need some details...
5. Wesleyn seems like a good option for a pension ,plan to look into that..
Dunston has suggested an IFA, but I am a but unsure....

Can you articulate what draws you to Wesleyan- if not then either some reading up or an IFA might be worth considering

dunstonh

2. My spouse works part time, 2 days a week so I am the main earner

Doesnt matter who is the main earner. Are you planning to stay together in retirement?
Why don't you want to use your spouse's allowances?

Dunston has suggested an IFA, but I am a but unsure....

Your plans, as they stand, are likely to be costing around £2000 a year or more (in todays terms) in retirement. 30 years in retirement and that is £60,000 lost.

use of Wesleyan is a strange choice. Not one that inspires confidence.

Remember the comment about DIYing being good if you do it well but costly if you do it badly. You are heading down the badly road at the moment.