My plan - thoughts please

ORC

First time poster here. My general financial plan is below – no specific questions, but thoughts welcomed.

I am 35 and my DC pension pot is £165k – all in global equity tracker funds. Current gross contribution (incl. employers) is £22k p.a. – perhaps slightly higher subject to size of bonus to avoid 60% tax! Wife is same age and is part time – pension pot of £85k and gross contributions of £9k (materially all in equities). No set retirement age as too far away – just the knowledge that the more we can save now, the better off we will be.

We have Help To Buy (20% equity) on our house and so have been overpaying mortgage with a view to buying out the Gov’t in June (when the 5 years fee free period expires) and being under the 60% LTV threshold. Even when we are under the 60% LTV, our intention is to keep overpaying the mortgage. I recognise it would be better to redirect this money to the pension on one hand, but the more immediate benefit of flexibility has won this argument given we are quite a long way from retirement.

We also have 2 young children and are saving £2.4k p.a. into a JISA (I am aware of the pitfalls of JISAs!) – again all invested in global equity tracker. We have cash savings of £15k and no other savings (perhaps a bit on the low side for some). We have no debt. We live a comfortable life at the moment – neither of us are extreme savers or extreme spenders!

Marcon

If you are hitting the 60% tax bracket (or could be if you don't take avoidance action!), might be worth spending some money on proper financial advice, based on a full understanding of your situation, objectives, attitude to risk etc?

dharm999

Pensions for your children?

jim8888

Seems to me you're in a good position - wish I'd been thinking about my pension back when I was 35. I chose the ISA route over more pension contributions though, which has worked out quite well. That's because you're taxed on your pension when you take it, whereas the ISA savings are all yours tax free, and my pension did build up over the years. I'd hazard if you keep going the way you are, then when you hit 55 you might well be hitting a 50% tax rate on some of your pension, depending on how badly the government will need the cash (answer: badly).
All I'd do if I was you would be to keep learning - visit these boards, read the recommended books, the websites and podcasts. The popular ones are popular usually because they're good. My personal favourites for retirement plans have been Mr Money Moustache (website) Mad Fientist (podcast) Monevator (refreshingly UK focused investment website), Dave Ramsey podcast (unfortunately very American, but solid financial common sense)....I'm sure others will recommend more. And of course this website/forum, which is a fantastic UK resource.

ORC

Thanks for the comments. It seems like we're generally on the right course, which is reassuring.



I'll have a look at some of those resources you suggest Jim.



Good thought on pensions for the kids - but at the moment I think I have better uses for that same money.

somethingcorporate

ORC wrote: »

Thanks for the comments. It seems like we're generally on the right course, which is reassuring.



I'll have a look at some of those resources you suggest Jim.



Good thought on pensions for the kids - but at the moment I think I have better uses for that same money.

Whilst pensions for the kids may be a good idea there is plenty of thinking that suggests saving for things like house deposits/wedding etc should also be considered. If you save in your name then there is no opportunity for it to be squandered like a JISA!