Retirement Plan Sense Check

Tom_Brine

AlanP wrote: »

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?

I have now opened a LISA last night after much research. I decided to go with Hargreaves Lansdown as though they have a higher platform fee they don't charge to trade in funds like AJ Bell do. Starting small with a more risky fund for the hell of it. £50 a month into Lindsell Train Global Equity (Class D) Income (the small monthly payment is what made me go with no trading fees over a slightly lower platform fee. I can always revisit it at a later stage if I start putting more into it.

I do have a partner and we will be married in June this year. Children are probably 2 - 3 years away and i'm aware I need to scurry away as much as I can before one arrives to bleed me dry for 18 years thereafter!

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.

Yes it is with Fidelity and I agree its quite misleading but the break down shows that there actually a far bigger reliance on north america than the UK across the three sub funds. Last night I set a new instruction for all future payments to go into the "Global Equities Active" fund. A mix of "Ardevora Global Long-Only Equity Fund" (33.6%), "Pzena Global Expanded Value Fund" (33.3) and "Baillie Gifford Long Term Global Growth Investment Fund" (33.1%). Slightly higher charge but also much better performance over the last 5 years. But as we all know that's no indicator of future performance. Ill put a few years into this fund to get to around £50,000 then look to swap again in order to ensure the pension is diversified.

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
Maybe consider property.....not clear if you own somewhere....as Mark Twain once said, “buy land, they aren’t making any more”!

This has given me pause for thought, the age at which I can access the pension will only rise as time goes on. Perhaps more should be going into my Stocks and Shares ISA in order to make up for that fact. I will need to have a look at the numbers and what I could switch to as theres no sense in me taking money out of the pension if it will be taxed at 40%. The increase in April to the threshold at which 40% is paid will enable me to do just that.

We have recently brought a large house in Derbyshire. Previously I owned a new build in Birmingham that was a goldmine as I rented out three rooms in the property. It paid for itself. The new house is more a ready for family home. Though we do have a lodger moving in in a few weeks time so we can use the rent to overpay the mortgage after the wedding is paid for. Mortgage currently is 25 years though we can overpay 10% each year (An overpayment of £1000 in January knocked four months off the total payback time!!) realistically we wont be able to start hitting that until next year, a house move and a wedding has hit the old wallets quite hard.

Thanks for responses everyone great advice and some things that have spurred me into action I may not have taken otherwise

MallyGirl

"Children are probably 2 - 3 years away and i'm aware I need to scurry away as much as I can before one arrives to bleed me dry for 18 years thereafter!"

and the rest! My DD is looking at a 5 or 6 year uni course. We will have to significantly contribute to her maintenance as our salaries mean she will only get the minimum.

Alexland

Tom_Brine wrote: »

Yes it is with Fidelity and I agree its quite misleading but the break down shows that there actually a far bigger reliance on north america than the UK across the three sub funds. Last night I set a new instruction for all future payments to go into the "Global Equities Active" fund.

My fund options are slightly different to yours but it looks like Fidelity are adding horse meat cheap filler into some of their workplace funds. I just phoned them up to ask for the discharge paperwork to partially transfer another lump sum into my SIPP where I have better and lower cost options.

Alex