no pension

strongboes

age 38 salary 65k

house worth 180k, mortgage 90k.

1.5k in an old sipp.

30k short term debt

stock investments worth 100k.

I pay nothing into a pension, because up until now I have needed every penny of my income. partner and 3 children, partner doesn't contribute financially at the moment, children are young.

Company owner, looking at selling 400k worth of equity very shortly. Plan to move house with this. We live in a very nice coastal location, current property could generate an easy 10k per year holiday rental, possibly more.

Looking to pay off short term debt, will need 40k for cgt in 18 months time.

Should I think about pensions? I really dont like the fact that I cant access the money when i choose, I don't want to buy an annuity, happy to be educated though.

Paid full allowance last year into isa and 2 junior isas.

I also feel like I waste money but not relevant for this thread I suppose. Run expensive car etc.

MallyGirl

There are big tax breaks to contributing to a pension- your accountant should be advising you about this.

LHW99

MallyGirl wrote: »

There are big tax breaks to contributing to a pension- your accountant should be advising you about this.

Particularly if you have a limited company and the company pays into a pension for you.

Dazed_and_confused

salary 65k

I pay nothing into a pension

partner and 3 children

partner doesn't contribute financially at the moment, children are young

I know people often subsequently provide more detail which means the original post turns out to be very misleading but at face value this means you are missing out on about £2.5k in Child Benefit (or are getting it and later repaying it).

xylophone

You and partner do have life insurance to cover the repayment of the mortgage etc in the unfortunate case of your early demise?

You could look into contributions to a pension for you and for your partner - in her case, as she has no relevant income, this would be limited to a net £2880 - the pension provider would claim tax relief of £720 and add it to her pot.



You might consider the implications for Child Benefit of pension contributions.

https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/reduce-high-income-child-benefit-charge/

https://www.limitedcompanyhelp.com/paying-into-a-pension-from-your-limited-company/

Marcon

strongboes wrote: »

Should I think about pensions? I really dont like the fact that I cant access the money when i choose, I don't want to buy an annuity, happy to be educated though.

Of course you should think about pensions, if only to decide they really aren't for you (although from what you've said, it's hard to see why they wouldn't be).

You don't have to buy an annuity.Where've you been since the famous pension freedoms were introduced four years ago? Have a look at https://www.pensionsadvisoryservice.org.uk/about-pensions or (better still) take some proper, paid-for advice to ensure you are on the right track financially.

kinger101

Marcon wrote: »

or (better still) take some proper, paid-for advice to ensure you are on the right track financially.

THIS!

It will probably be the best money you've ever spent, as you'll save an enormous amount in tax and national insurance once you have a proper pension in place.

FatherAbraham

strongboes wrote: »

Should I think about pensions? I really dont like the fact that I cant access the money when i choose, I don't want to buy an annuity, happy to be educated though.

On your personal balance sheet, there's an important item missing.

That item is a liability.

It's called "provide an income for myself when I'm too old to be able to work any more, or don't want to", and it's a big liability.

Whether you balance that liability with assets in pension funds, or ISAs, it doesn't matter - the assets you've assigned to meet that liability are fettered. If you spend those assets on something else, then the liability remains unsatisfied.

My point is that money you assign for your retirement should always be viewed as inaccessible for pre-retirement consumption.

Once you've made that mental adjustment, it becomes a no-brainer to accept the hard access limitations of pensions arrangements, in order to exploit the taxation benefits.

If you really can't accept that you have to irrevocably put money away for your elderly self now, then your financial future is likely to be a catastrophe.

Thrugelmir

strongboes wrote: »

We live in a very nice coastal location, current property could generate an easy 10k per year holiday rental, possibly more.

Excess of holiday lets generally. Seems to be an increasing amount coming onto the market for sale. Far from a high safe return.

dunstonh

Should I think about pensions? I really dont like the fact that I cant access the money when i choose, I don't want to buy an annuity, happy to be educated though.

You havent had to buy an annuity at all from 2015 and prior to that, bar some very small exceptions, you were not required to buy an annuity before age 75 for many decades.

You can access the money after age 55. It is a pension after all.

You need to start considering your life as a whole and not just now. Pension is geared for later life.

Looking to pay off short term debt, will need 40k for cgt in 18 months time.

Just think how much lower it would have been had you been using a pension.

Paid full allowance last year into isa and 2 junior isas.

Yet the pension has the same investment funds and the same charges and better tax efficiency than the ISA. You paid corporation tax or income tax/NI (as your salary seems high for a director - most shareholding directors only take income to the primary threshold or the personal allowance with dividends above that. A salary of £65k is very inefficient. How much in dividends to you take above that?) A pension would reduce corporation tax and get money out of the company with no income tax/NI.

Maybe you can still reduce the impact before you sell up as you are able to use carry forward as well as this years allowance.

You are missing a trick through lack of knowledge and understanding and perhaps some anti-bias that is misplaced. At least you have posted here to learn more. Now it will depend on whether you take in what is being said or just ignore it.

strongboes

Dazed_and_confused wrote: »

I know people often subsequently provide more detail which means the original post turns out to be very misleading but at face value this means you are missing out on about £2.5k in Child Benefit (or are getting it and later repaying it).

I don't claim, eldest lives with me 50% of the time, I believe his mother claims.

Our 2 we don't claim for, my salary did used to be higher but I reduced it for tax and some other reasons.