General advise

GotPrincess

Afternoon guys and gals,
I have posted here before asking for advise on investing etc etc but my situation has changed in the last 18 months and I just want to get a updated opinion.
I started my own business 18 months ago the username says it all it's going extremely well with revenues of £15,000 monthly and on target earnings to surpass the £200,000 mark and I really think I need to start putting money away as I don't have savings as such or a great pension from previous employment.

Below is the current situation
AGE: 40
SAVINGS: £10,000
INVESTMENTS: £0
PENSION: May as well be zero been unemployed most my adult life
I have a disposable income per month of around £2,000 - £3,000 and I would like to start putting this to work even though it most likely is too late to set me up comfortably in the next 20-30 years.
What would your plan be this assumes I have taken care of all debts, taxes etc as a side note I do want to hold on to some gold as in coins mainly for vanity purposes but also with a view to a long term hold 

Sorry if the post come across as newbie in tone but any advice would be great

Linton

Let's assume you put £24K/year gross (£19.2K net), increasing with inflation, into a pension and get an annual return of 3% above inflation, which is not wildly optimistic.  After 20 years you would have a pot of £650K.  This could generate say £22K per year gross at current prices increasing with inflation for the rest of your life.  Then you have to add in State Pension.  Would this meet your needs?

If not, after 30 years you would have over £1M.

Note - it would probably be best if your company pays a company pension rather than you make a personal one.

EthicsGradient

I would say the first thing to think about is owning your own home - if you've been mostly unemployed, and the business is still relatively new, I'd guess you don't yet. But if you're unlikely to want to move around a lot, it's probably a good investment for the long term - pay a mortgage rather than paying rent, and start soon and you can pay it off by the time you get to state pension age. Then your outgoings will go down a lot. And that would probably mean building up some savings over the next year or two for the deposit - find out how long lenders need evidence of the earnings of your business for.

If you have reasons you don't want to own your own home, then paying into a personal pension would seem a good idea - few people find the state pension on its own satisfactory (especially if you'd still be renting by the time you retire), and you can invest in stocks in general via a SIPP, for long enough if you start now, that market fluctuations shouldn't have a big effect. You have enough time to build up a decent-size fund.

Albermarle

If you have been unemployed a lot then you could be missing some years of NI contribution, which would mean a reduced state pension . Check here 
https://www.gov.uk/new-state-pension/your-national-insurance-record-and-your-state-pension
If you are missing years , it would be better to start to top them up as a first priority 

Prism

Do you have a limited company or are you self employed? It can have a very different effect on your tax situation.

GotPrincess

EthicsGradient said:

I would say the first thing to think about is owning your own home - if you've been mostly unemployed, and the business is still relatively new, I'd guess you don't yet. But if you're unlikely to want to move around a lot, it's probably a good investment for the long term - pay a mortgage rather than paying rent, and start soon and you can pay it off by the time you get to state pension age. Then your outgoings will go down a lot. And that would probably mean building up some savings over the next year or two for the deposit - find out how long lenders need evidence of the earnings of your business for.

If you have reasons you don't want to own your own home, then paying into a personal pension would seem a good idea - few people find the state pension on its own satisfactory (especially if you'd still be renting by the time you retire), and you can invest in stocks in general via a SIPP, for long enough if you start now, that market fluctuations shouldn't have a big effect. You have enough time to build up a decent-size fund.

Whilst this is a dream to have a house of my own im currently the owner of a awful credit history all self inflicted I might add

GotPrincess

Prism said:

Do you have a limited company or are you self employed? It can have a very different effect on your tax situation.

Currently the company is reg under a self trader however looking to speak to an account about going limited how would doing so imapct?

Prism

Odinsbeardcare said:

Prism said:

Do you have a limited company or are you self employed? It can have a very different effect on your tax situation.

Currently the company is reg under a self trader however looking to speak to an account about going limited how would doing so imapct?

It can give you a great deal of flexibility about how and when you pay yourself an income. When self employed, you pay tax as you earn and may well end up with disposable income as mentioned in your first post. If you have paid high rate tax on that income then the main way of getting some of that back is to pay into a pension.

When set up as a limited company you get more options. You can pay yourself a wage. You can pay yourself dividends which means you avoid national insurance. You can hold money back in the good years and still pay a regular income should you have bad years. You can pay into a pension directly from the company which completely avoids income tax and national insurance.

TBC15

With the information provided on this thread would someone be able to get an address you are keeping your gold at? Just thinking.