Retirement Plan Sense Check

Tom_Brine

Hello everyone

I'm hoping for a little sense check on my retirement plans, I am currently 35 years old.

£51,000 invested in workplace DC Scheme in a "Global Equity Passive" Fund comprising of

Blackrock ACS World ex UK Fund (61.5%)
Blackrock ACS UK Equity Fund (28.9%)
BlackRock Emerging Markets Index Fund (9.6%)

Currently investing 33% of my salary into the pension each month (£1745.95)
With employer contributing a further £529.08

I also have two stocks and shares accounts which I save into in order to provide some funds should I want to retire before I can access my pension moneys. Or at least go part time should I feel the need to.

I invest £150 a month into a Vanguard Investor ISA. Currently a total value of £1668 going into the FTSE Global All Cap Index Fund (Accumulation)

And finally £125 a month is invested into Scottish Mortgage Investment Trust directly through Baillie Gifford. I currently have 800 shares and have invested £3750 to date. These shares are not sheltered from tax.

Basic plan is that the Investment Trust shares and ISA can provide income to bridge a gap between wanting to retire or at least reduce working hours and the pension to pick up when pension age kicks in (whatever that will be when i'm older)

Interested in thoughts on the approach

Marcon

Sounds as if your employer doesn't offer salary sacrifice, which could give you/the a useful NI saving (although be aware of the impact this could have on any salary linked benefits such as death in service life cover). Worth asking!

More info: https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/salary-sacrifice

atush

I also have two stocks and shares accounts which I save into in order to provide some funds should I want to retire before I can access my pension moneys. Or at least go part time should I feel the need to.

Are these in ISAs? If not transfer the to one.

The approach in general is solid, esp if you shelter all you can (that isnt in pension) in Isas. Ballie Gifford might offer one, if you have enough annual allowance in future.

AnotherJoe

Too much in the U.K. Whilst some of that will be overcome because the U.K. companies will be large and global, by the nature of selecting a passive fund of large U.K. companies you'll end up with a very restricted set of company sectors.

Zorillo

You could get a bonus of approximately £15k if you opened a LISA now and put £4k a year into it until you're 50.

Thrugelmir

Tom_Brine wrote: »

Interested in thoughts on the approach

Only time will tell if you picked the right funds and sectors. As your pension pot grows in size, diversify it further. Property, infrastructure, smaller companies, renewables, private equity etc etc. The best portfolios make a net gain every year. Irrespective of the performance of the component parts. As some will rise and some will fall.

Tom_Brine

Thanks for the replies. Its definitely Salary Sacrifice. One of the reasons for the high percentage contribution is to avoid paying 40% tax on my earnings

The UK exposure i agree with. It was only the other day that I realised my "global equities passive" fund contained almost 30% uk exposure. I will have a look at other funds available and start investing in one of the other baskets for future contributions.

One of the stocks and shares accounts is in an ISA, the Vanguard Global All Cap is in an ISA through Vanguard Investor, which is currently the cheapest option for me with such a small monthly amount being invested.

As I understand I can only pay into one ISA per tax year which limits my options for purchasing SMT and a vanguard fund to a more expensive platform option. My thinking with the Investment Trust share plan through Baillie Gifford was that if everything else is sheltered fro tax I can come to a point where i remove the annual capital gains allowance from the fund each year. Maybe to pay off the mortgage in the years approaching retirement or if its paid (We are overpaying) help move to part time work etc.

The LISA is an interesting one, ive not considered them due to restrictions on accessing your money going against my plan of pension for retirement with additional savings to access before that kicks in giving me more flexibility near the time.

AlanP_2

Whether you actively build up the LISA or not would be worth opening anyway before Age 40 so you have a choice.

Do you have a partner, is their a family unit focused dimension to consider as well?

atush

My thinking with the Investment Trust share plan through Baillie Gifford was that if everything else is sheltered fro tax I can come to a point where i remove the annual capital gains allowance from the fund each year.

That is fine for the gains, but will you be over the dividend allowance at any point? Isas shelter income too, not just gains.

Alexland

Tom_Brine wrote: »

It was only the other day that I realised my "global equities passive" fund contained almost 30% uk exposure.

Out of interest is your workplace pension with Fidelity? They have a similar 'passive global equities' fund option in my pension which uses Blackrock trackers with heavy UK allocation. I consider it genuinely misleading.

Alex

cfw1994

Tom_Brine wrote: »

Hello everyone

I'm hoping for a little sense check on my retirement plans, I am currently 35 years old.

£51,000 invested in workplace DC Scheme in a "Global Equity Passive" Fund comprising of

Blackrock ACS World ex UK Fund (61.5%)
Blackrock ACS UK Equity Fund (28.9%)
BlackRock Emerging Markets Index Fund (9.6%)

Currently investing 33% of my salary into the pension each month (£1745.95)
With employer contributing a further £529.08

I also have two stocks and shares accounts which I save into in order to provide some funds should I want to retire before I can access my pension moneys. Or at least go part time should I feel the need to.

I invest £150 a month into a Vanguard Investor ISA. Currently a total value of £1668 going into the FTSE Global All Cap Index Fund (Accumulation)

And finally £125 a month is invested into Scottish Mortgage Investment Trust directly through Baillie Gifford. I currently have 800 shares and have invested £3750 to date. These shares are not sheltered from tax.

Basic plan is that the Investment Trust shares and ISA can provide income to bridge a gap between wanting to retire or at least reduce working hours and the pension to pick up when pension age kicks in (whatever that will be when i'm older)

Interested in thoughts on the approach

If you are putting 33% of your salary away at your age, PLUS your employer is putting what looks like about 10%, AND you’re popping another ~5% into other places, I think you can crack on without any help here: that’s a HUGE amount of savings! :T

Keep that on for another 15years, you’ll be wondering what to do with it all

Or.....consider saving a little less, and living a little more?

Sorry, that sounds rude...I’m kind of pulling your leg a bit - well done on what you have saved! - but seriously, you are packing away FAR more than the average person at your age: :beer:

I’d consider popping maybe a bit less into the pension and a bit more into ISAs....as you understand, you may reach a point (at the rate you’re going!) where you cannot get at the DC money, but want other tax efficient monies to put your hands on....max out those ISAs!

The question of family is a key one....that can soon such the money away:rotfl:
Maybe consider property.....not clear if you own somewhere....as Mark Twain once said, “buy land, they aren’t making any more”!