Where to save beyond annual allowance

Plu2370

I am looking for some opinions on approaches to investment if you are using up all of your annual allowance, and more.

As a result of some final salary element to my DB pension and a few decent pay rises I will breach the annual allowance this year and have used all my carry forward. This will likely be the case each year going forward. The contributions are still relatively low so this is costing me less than £10k a year. Happy days! Unless I hit the taper, but that is a worry for another day.

This leaves me with a decent amount to save for the future. I assume with no annual allowance further pension savings are pointless? I don’t have a LISA, so could be worth setting one up?

Any other ideas of ‘wrappers’ I should be looking at? I’ve considered setting up a Ltd company to buy a house or two and retaining the money in the company as I have no current need for any more income.

Brynsam

Why, if you've got so much money, do you not spend some of it on getting proper financial advice - the sort you pay for, where the person advising has all the relevant facts?

Plu2370

Thanks for the reply. I am certainly not averse to paying for professional advice and may well do. It seems like I don’t fit the standard advice model though. As a result of my relatively young age and recent climb up the ‘corporate ladder’ almost all my ‘wealth’ is held within a DB pension and my house.

So any advice, I assume, would have to be on an hourly basis rather than % ongoing fee as I have hardly any investments. If this is even possible?

I would just add too that due to the final salary aspect and a large amount of luck I find myself in the position of adding over £4K of annual DB pension for less than £10k of contributions. Which is great but doesn’t flow proportionally into monthly disposal income, as it might appear.

tibbles209

If you will be consistently using up your full annal allowance it would indeed not make sense to save more inside pension wrappers. If you qualify for one, a LISA would provide a bonus equivalent to 20% tax relief; I assume you are a 40% tax payer, but this is better than nothing. You would of course however not be able to access this money until you are 60+.
If you want to make investments that you can access earlier than this then a S&S ISA would be the way to go.

dmelife

What makes you think you will breach the annual allowance each year if there is no taper. What is your salary now are how much do you expect it to increase by each year?

Plu2370

Salary this year will be just over £100k + bonus. Increases are difficult to predict but I would assume an extra £10k+ each year in the short term.

dmelife

Then you are not likely to breach the £40k annual allowance until you start to taper.

Plu2370

On what basis do you think the annual allowance won’t be breached?

My sums are:

£105k salary = £34k of annual allowance used through 1/49th CARE
£10k pay rise = £20k of annual allowance used through final salary increase

Ignoring any potential bonus.

Brynsam

Plu2370 wrote: »

Thanks for the reply. I am certainly not averse to paying for professional advice and may well do. It seems like I don’t fit the standard advice model though.

The whole point of individual advice is that it takes into account your particular circumstances, rather than trying to shoehorn you into a 'standard' model.