Pension Advice for a Newbie

crisp

My brother just turned 45. He has no mortgage or dependents and no pension!

He is self employed and can £10k away a year for the next 10 years when he hopes to semi-retire.

Any advice of where he can start in deciding and what he needs to be aware of?

PeacefulWaters

Get a state pension forecast.

Lokolo

When you say no mortgage, is this because he has paid off a mortgage on his current property, or is he renting?

crisp

He has paid off his mortgage now. No debt and about £30k in savings.

xylophone

He should get a state pension forecast to help with planning

https://www.gov.uk/check-state-pension

He can start a pension.

https://www.litrg.org.uk/tax-guides/self-employment/pensions-and-self-employment

https://www.pensionbee.com/pensions-explained/frequently-asked-questions/self-employed-pensions?ast=HglPl2

https://www.cavendishonline.co.uk/pensions/

Linton

Will £100K+investment returns be sufficient for him to semi retire? It doesnt sound much given that he has no other pension and no major savings. I suggest that he puts together a financial plan showing how much/year he needs to live on and where the money is coming from up to an age of 90+.

BLB53

Any advice of where he can start in deciding and what he needs to be aware of?

The longer he puts things off the harder it will be to accumulated a decent amount to semi-retire on so my advice would be to make a start.

There are two basic ways to do this, either pay to get a financial adviser to set things up or, the cheaper option would be a diy plan but not everyone is cut out to do this.

Maybe get hold of the book 'DIY Pensions' by Edwards and he should know which way to go when he has read it.

The third option would be to look at something like Nutmeg which could be a sort of 'halfway house'.

crisp

Linton wrote: »

Will £100K+investment returns be sufficient for him to semi retire? It doesnt sound much given that he has no other pension and no major savings. I suggest that he puts together a financial plan showing how much/year he needs to live on and where the money is coming from up to an age of 90+.

He needs around £15k a year. Moving to part time would give £10k and he is hoping for 5% from his pension pot via dividend income while not dipping into the capital.

I thought he was a little ambitious at 5%. Is it possible?

MallyGirl

Ambitious would be right

PeacefulWaters

crisp wrote: »

He needs around £15k a year. Moving to part time would give £10k and he is hoping for 5% from his pension pot via dividend income while not dipping into the capital.

I thought he was a little ambitious at 5%. Is it possible?

How's he going to achieve a £15k income until he's 85, 90, 95 ...?

How's he going to account for inflation which will inevitably erode the buying power of his capital unless it's growing at 5% over and above inflation?