We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Starting pension contributions at 43.

letspretendforaminute
Posts: 95 Forumite

I'm looking to start pension contributions of £240p/month (net) from April (next financial year) and continue until aged 60 (17 years). It'll be a mix of Vanguard FTSE 100 tracker and my own stock picks. I transferred £8k from old pensions into this pot 8 years ago and it's increased in value to £28k. Trying to keep the yield at 4%+ the online savings calculator suggests this could be £140k
I'll also refinance my debt £24.5k over 7 years at £350p/month (5.9%) and hope to be debt free at 50.
I own 25% (£50k) equity in a shared ownership home, no mortgage and rent the remainder for ~£375p/month with no plans to staircase.
I'm a single parent with £2,250p/month income including universal credits (UC £1,100, Child Maintenance £650, CB £137 and £375 salary).
Question: Do I inform anyone of my pension contributions? Is it sensible to pay into a pension at the same time as refinancing debt or just focus on paying the off the debt that includes the financing of a new car (£10k and good for 7 years).
Am I doing enough?
I'll also refinance my debt £24.5k over 7 years at £350p/month (5.9%) and hope to be debt free at 50.
I own 25% (£50k) equity in a shared ownership home, no mortgage and rent the remainder for ~£375p/month with no plans to staircase.
I'm a single parent with £2,250p/month income including universal credits (UC £1,100, Child Maintenance £650, CB £137 and £375 salary).
Question: Do I inform anyone of my pension contributions? Is it sensible to pay into a pension at the same time as refinancing debt or just focus on paying the off the debt that includes the financing of a new car (£10k and good for 7 years).
Am I doing enough?
1
Comments
-
You could go the whole hog and put in £300 net.
They may well impact UC, might be better posting on the Benefits board about that aspect.1 -
Personally, I'd not be spending £10K on a car if I needed a loan to finance it. Historically, I've spent less than half that an 8+ year old Mondeo, with 80-100K on the clock. They're tended to last around 5-7 years before repairs have become uneconomical.
Many would argue that paying off debt should take priority of pension, but I think you definitely need something going into the pension - particularly if it's affordable. Could you confirm whether you have access to an employer's scheme, and if so, whether this is salary sacrifice or not?
I'd also stick to one low cost globally diversified tracker such as Fidelity World Index or one of the Vanguard VLS funds. At £300 a month (gross), you're going to have very high transaction costs on individual stocks."Real knowledge is to know the extent of one's ignorance" - Confucius1 -
kinger101 said:Personally, I'd not be spending £10K on a car if I needed to a loan to finance it. Historically, I've spent less than half that an 8+ year old Mondeo, with 80-100K on the clock. They're tended to last around 5-7 years before repairs have become uneconomical.
Many would argue that paying off debt should take priority of pension, but I think you definitely need something going into the pension - particularly if it's affordable. Could you confirm whether you have access to an employer's scheme, and if so, whether this is salary sacrifice or not?
I'd also stick to one low cost globally diversified tracker such as Fidelity World Index or one of the Vanguard VLS funds. At £300 a month (gross), you're going to have very high transaction costs on individual stocks.
The employers pension scheme isn't terribly good with only matched contributions and on such a low salary. I'll look into those funds thank you and with regular savings the transaction costs on individual stocks can be very low... from £1.50 trading costs.
As of today I have £4.5k in IQE, £4.25k in SSE, £4k in BAE, £4k in VOD, £3.5k in EMG, £2k in KHC (kraft heinz), £2k in JLP, £1.3k in both HMZ and EFR (energy fuels) and £1k in LLOY for me the sweet spot for dividend income is £4k so my first task will be to bring this up to £4k and that'll be my first monthly savings instruction then I'll look to the funds.
0 -
Guess you're well below paying NI anyway, so salary sacrifice is not relevant. But make sure you're getting the maximum employer match at least. The transaction costs aren't the only problem with individual stocks. Lack of diversity is too. At the end of the day, it doesn't really matter if pension income is derived from dividends or capital growth."Real knowledge is to know the extent of one's ignorance" - Confucius1
-
kinger101 said:Guess you're well below paying NI anyway, so salary sacrifice is not relevant. But make sure you're getting the maximum employer match at least. The transaction costs aren't the only problem with individual stocks. Lack of diversity is too. At the end of the day, it doesn't really matter if pension income is derived from dividends or capital growth.
*£8k to £28k in eight years suggests I've targeted growth quite well.0 -
It's good growth, but that 8 years has been in a bull market. I wound't necessary equate it with an innate ability to pick winners."Real knowledge is to know the extent of one's ignorance" - Confucius0
-
kinger101 said:It's good growth, but that 8 years has been in a bull market. I wound't necessary equate it with an innate ability to pick winners.0
-
As others have said, any matched employer contributions should be taken advantage of but minimum wage may also come into play.
You are also limited to your gross pension contribution into your sipp not exceeding your gross salary so £375pm max after tax relief.
I have an economics degree but believe in rational markets so would never try to pick individual stocks.
You can deduct all pension contributions from your income that is assessed for UC purposes (I get tax credits and pension contributions reducing income increases tax credits by 41% of the amount paid into the pension) and of course pension holdings are not treated as capital in UC calcs.I think....1 -
michaels said:As others have said, any matched employer contributions should be taken advantage of but minimum wage may also come into play.
You are also limited to your gross pension contribution into your sipp not exceeding your gross salary so £375pm max after tax relief.
I have an economics degree but believe in rational markets so would never try to pick individual stocks.
You can deduct all pension contributions from your income that is assessed for UC purposes (I get tax credits and pension contributions reducing income increases tax credits by 41% of the amount paid into the pension) and of course pension holdings are not treated as capital in UC calcs.0 -
Why the FTSE 100? As a base I'd suggest a much broader investment fund to start with. I'd use the stock picks to select the 4% plus yielders. Though on what basis are you going to select these. Ideally they need to meet a set range of criteria not just look attactive on what they currently pay out. You need to ask yourself why others are the shunning the stock given the low level of interest rates these days. Dealing costs mount up. Which would greatly reduce your yield/return on smaller sums.1
This discussion has been closed.
Confirm your email address to Create Threads and Reply

Categories
- All Categories
- 351.8K Banking & Borrowing
- 253.4K Reduce Debt & Boost Income
- 454K Spending & Discounts
- 244.8K Work, Benefits & Business
- 600.2K Mortgages, Homes & Bills
- 177.3K Life & Family
- 258.4K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.6K Read-Only Boards