difficult to get the balance right ?

Gary1984

View it as upgrading one lump of metal for a more useful lump of metal.Perhaps if you're debt free then this whole gold thing makes more sense but what sort of interest rate is on the car loan? 

clean_cotton

I have approx £9500 worth of gold put away. The interest rate on the car loan is 5.2% - but I think I can clear that by end of the year if I put my mind to it. That way, even if I don't buy any more gold, iv got potentially a year or so worth of spending (depending on the price increase) just there?

Steve_PL_too

This is a very interesting thread : thanks, all.  I would add that you might want to consider the size of ‘rainy day fund’ that you should keep, in your ISA.  In the fullness of time, when it hopefully hasn’t rained, you could consider releasing it into a pension then.  Ok, so you won’t have had the benefit of any growth on the ‘tax’ element of the payments into the pension, but you can still use the ‘carry back’ provisions to mop up a couple of years’ pension allowance In order to take advantage of the ‘free money’ when you do draw on your pension. There are trade-offs to be considered, and much of it is down to your personal appetite for risk.

clean_cotton

Steve that is such a good point. I didnt know you can use previous years pension allowance ( I have just researched it and apparently its 3 years) - so I can build up money into S&S and then make a decision later down the line. That way I would have access to cash (and not need to take a loan out again). 

I have been reading some American blogs - and they don't seem to be keen on pensions and favour stocks and shares - presumably that is because their pension tax advantages aren't as good as ours?

I will keep reading, but I will invest with something like Vanguard. The more you start to understand it, it seems less and less scary and actually a little exciting. Also, with 18 years left I sense even a small amount each month will provide with a decent pot (hopefully)

been speaking to my partner and he has no interest in all this whatsoever and is happy for me to take control of everything. 

We join our finances (literally have just the one bank account) so whatever investment we have, we hold together. I only say that because all our friends have separate finances with their partners so apparently we are in a minority for doing that. 

Anyway - thank you again to everyone. I can't tell you how much I have learnt and been inspired! 

I have a few books arriving tomorrow about investing and will get on and read them. 

I am also going to look at our income and work out how much we save and how much we spend. We are generally good with not wasting money, but would like to try and use 50% of the monthly income for retirement and debt payments, and the other half for everything else. Will report back once I know the figures.

LHW99

Steve that is such a good point. I didnt know you can use previous years pension allowance ( I have just researched it and apparently its 3 years) - so I can build up money into S&S and then make a decision later down the line. That way I would have access to cash (and not need to take a loan out again).

But be careful on this - you have to have earned enough in the current year to mop up those three years contributions, so to speak - in other words, if you only earn £10000 in a year, that is the maximum gross contribution, even if you made no contributions in the years before, but have suddenly found enough spare savings for a bigger contribution.

Steve_PL_too

 Yes -thanks for clarifying that - but it’s still a useful allowance! 

hugheskevi

Steve_PL_too said:

This is a very interesting thread : thanks, all.  I would add that you might want to consider the size of ‘rainy day fund’ that you should keep, in your ISA.  In the fullness of time, when it hopefully hasn’t rained, you could consider releasing it into a pension then.  Ok, so you won’t have had the benefit of any growth on the ‘tax’ element of the payments into the pension

The tax element is neutral, as you get extra tax relief on the growth from the ISA funds.

Assume you are a basic rate taxpayer and earn £100 - ignore National Insurance for simplicity. You pay £20 income tax, so have £80. If you put that into a pension it is grossed up to £100. Put it into an ISA and you have £80.

Time passes, and investment returns net of charges are 20% (assume same investments and charges in ISA and pension). You would now have £120 in the pension, or £96 in the ISA.

If you put the £96 into a pension, it would be grossed up to £120.

clean_cotton

Yes thanks for clarifying and for the example. 

My view now really is to put some money into a pension, and some more into s&s isa. 

Steve_PL_too

Just a late thought ... if you like the idea of gold, then perhaps put your money into a watch or jewellery. Something you can enjoy for its own sake (if you like that kind of thing), but which has a solid intrinsic value.  It may or may not be a good investment over the long term, but it might provide a bit more enjoyment over the years than a pension!  

enthusiasticsaver

I agree with many of the other comments in forget about the gold (as the price is so variable) and look for a well diversified multi asset fund and start up stocks and shares isas.  The teachers pension scheme is good and you can make good use of your DC  pension by taking the 25% tax free and the rest to be taken each year within your personal tax allowance but pensions cannot be accessed until 55 at the moment so having a second income stream other than pensions is a good idea. 
We retired at 58 and I would suggest the following. 
Start up a spreadsheet and monitor expenditure and pension forecast. I think it is good to maintain the same lifestyle in retirement so if you are only spending 50% of your income and saving 50% then you only need to forecast an income in retirement of 50% (or less with no NI, pension contributions, less tax and no commuting costs) That will give you a pretty good idea of when you can afford to retire. We aimed for 60 but went at 58 when we could afford to without compromising our lifestyle. 

Set up stocks and shares isas and build a good emergency fund so you have a buffer to cover any years before you are able to access pensions and even out any stock market crashes. Carry on investing into your pension as although £100k sounds a lot if you intend going early it needs to cover a long period of time.  We use an IFA who cashflowed our income until the age of 99 as often it is the later years which can cost if you need to buy in help to do things like clean, gardening, personal care etc etc.  I know some people don't like to think that far ahead and we have children so we want to leave an inheritance but often people like yourself with no children think that it is best to just spend it.  The problem with that is you do not know how long you will live and a retirement in penury because you only forecasted up to the age  0f 70 for example sounds miserable.