Which way to focus?

OUNN

Hi sages.

I'm running up against a mental block at the moment. So it's to you I turn for thoughts to see if we can break through the block.

Really I'm trying to see if we're going in the right direction or if there's anything else we should be doing/considering.

It's the wife, a 2 year old daughter and myself.
In an ideal world we'd like to retire at 55 - which is 19 years away.

At the moment as one of those caught up in a 60+% tax bracket I'm sacrificing the full allowance into the pension each year. On top of that I'm saving into a LISA (not a cash one).

The wife is part time for three days a week. She earns somewhere around 27k and between herself and the company puts 25% into her pension I believe.

It's where to go now. Should we be using a LISA for the wife? She is better off using the pension probably, but that has limitations in getting it out, although we can probably access that sooner than a LISA.

Should we ignore the LISA and pension for the time being (apart from current contributions) and focus on a S&S ISA for one of us? We'll need something to tide is over from 55 to 57/58 when we can access our private pensions, and then to 60 for LISA I guess.

Daughter is sorted at least :rotfl:

Thanks in advance :beer:

Paul_Herring

In an ideal world we'd like to retire at 55 - which is 19 years away.

If you're basing that 55 figure on the current age one may access their personal pension, one additional focus you may want to consider is funding the gap between 55 and [your likely state pension age - 10], the latter of which is going to be when you, personally, are likely to be able to access your own personal pensions.

The tie to SPA is likely to be in 2028, and SPA itself is likely to increase a year or so in that 20 years.

bostonerimus

Maxing out the pensions is probably better from a strictly financial stand point as you are in a high tax bracket right now. However, flexibility is also important and the ISA would give you that and might help to bridge a gap if you are thinking of retiring early. I tend to think that people try to maximise tax benefits and absolute pension pot size at the expense of practicality sometimes so I would strongly consider the ISA if you are already making decent pension contributions.