Pension Idiot...that's me!

lucknnow

Desperately seeking retirement advice.
I have total savings including a stakeholder pension of approximately £260,000 (at present). Last valuation of stakeholder is £87000.
I thought I would work to 65 (5 years away) but health is dictating I should stop now. Always been self employed. I own my own home with 2 years of mortgage payment left and lives alone. No dependents.
How do I consolidate all my funds into one fund to give an income? Can I achieve £10,000 per annum? Most of my savings are in peer to peer and stocks and shares isa with Fidelity.
Should I seek help from IFA? Fees prohibitve?
Appreciate any advice.
Thank you.

AnotherJoe

£10k from £260k is [STRIKE]2.6%[/STRIKE] sorry 3.9% so that should be a safe withdrawal rate, eg all other thinsg being equal, growth in the investments, in the long term, would cover the withdrawals.

The money doesnt need to be all in one fund, nor does it need to be an income fund, you coudl sell off units as well as take natural income. BUt even a modest income fund will pay out 3% plus. There is also the possibility of an annuity, which with health issues then even at age 60 might not be too bad value.
Probably worth paying ?£500? to an IFA to go over the possibilities with you,

JoeCrystal

You would need to bear in mind that your income might have to increase by inflation otherwise £10000 now would be worth £6,700 in twenty years. You also may be getting the state pension by 66 as well which will go a long way in covering that £10,000 per year retirement.

AnotherJoe

Oops my maths was wrong its about 3.9%. Still doable especially if £10k is all you need because when you are 67 state pension will make up half that so you only need withdraw 4% for the first 7 years.

lucknnow

Thank you for the quick replies.
What I cannot get my head around is how and what should I do with all my different pots? Other than my stakeholder pension I have about 6 or 7 different savings averaging £30K.

GibbsRule_No3

Have you checked your State pension to see if you get the full amount or can, if you pay extra years, if you are finishing early?

AnotherJoe

lucknnow wrote: »

Thank you for the quick replies.
What I cannot get my head around is how and what should I do with all my different pots? Other than my stakeholder pension I have about 6 or 7 different savings averaging £30K.

There's no particular reason you have to do anything. Though obviously you should try and move them all into the ones paying the most interest. You could also leave some alone and burn the others down.

You could post them here for comments or pay an IFA for their time might be worth exploring an annuity if you don't want to be juggling alll that. It doesn't have to be a life time annuity either, for example 7 years at £10k and then whatever's left keep investing and you'll have SP. poor health can make a big difference to annuity rates.

Albermarle

Most of my savings are in peer to peer and stocks and shares isa with Fidelity.

If I understand correctly you have approx. £170K that is not in a pension.
You refer to these as savings, but then say they are in P2P and S&S isa's.
Savings means protected /safe money in bank building society accounts .
What you have is investments , which means potentially risky .
At least some of your non pension money should be in safe savings , in case the investments go through a bad patch . Especially P2P is unpredictable as to how it might develop in future ,

xylophone

Would it give you peace of mind to pay off your mortgage from savings?

Have you obtained a state pension forecast?

What do you expect your "relevant earnings" to be for the current tax year (when you expect to be giving up paid employment)?

You might leave your pension untouched (and continue to contribute - even with no relevant earnings you can make a net contribution of £2880 per annum to your stakeholder) and take as much as you need to finance daily living from savings?

In view of your ill health, would you be entitled to any benefits?