Planning for the future with 2020 vision

FunLovinCriminal

barnstar2077 said:

Don't just concentrate on your pensions.  I am a broken record I know, but I always tell people to give themselves options as you may end up wanting to retire earlier than you think.  I can say this as I struggle with a few ailments at the moment myself, and I am younger than you.

Take a good look at all of your finances, bills, mortgage, pensions, more accessible savings like ISAS or premium bonds etc.  A few tweaks now could make a big difference fifteen years or so down the line.

Don't stress about it though, most people seem to suddenly think about it in their late fifties, early sixties (if at all.)  You still have enough time to really make a difference to your retirement.

Thank you barnstar2077 
We have two young kids (4 and 6) and never really get any time.  Pensions have been in my mind for a while, as we really did maximise our mortgage repayments to the most we could afford to pay it off sooner....then wife was made redundant! Its a struggle at present financially, and we are tied in till 2022. 
We would take any advice going, as we don't want all our eggs in one basket.
We have an ISA with £2k in it at present.
My wife has retrained as a classroom assistant, this is only a term time position, and as such not paid during school hols (though we hope this contract will be changed soon!).
As a consequence the ISA is there to pay us, when she is not being paid.
So you think we should look more at ISA's?

barnstar2077

FunLovinCriminal said:

barnstar2077 said:

Don't just concentrate on your pensions.  I am a broken record I know, but I always tell people to give themselves options as you may end up wanting to retire earlier than you think.  I can say this as I struggle with a few ailments at the moment myself, and I am younger than you.

Take a good look at all of your finances, bills, mortgage, pensions, more accessible savings like ISAS or premium bonds etc.  A few tweaks now could make a big difference fifteen years or so down the line.

Don't stress about it though, most people seem to suddenly think about it in their late fifties, early sixties (if at all.)  You still have enough time to really make a difference to your retirement.

Thank you barnstar2077 
We have two young kids (4 and 6) and never really get any time.  Pensions have been in my mind for a while, as we really did maximise our mortgage repayments to the most we could afford to pay it off sooner....then wife was made redundant! Its a struggle at present financially, and we are tied in till 2022. 
We would take any advice going, as we don't want all our eggs in one basket.
We have an ISA with £2k in it at present.
My wife has retrained as a classroom assistant, this is only a term time position, and as such not paid during school hols (though we hope this contract will be changed soon!).
As a consequence the ISA is there to pay us, when she is not being paid.
So you think we should look more at ISA's?

I'm saying you should look at everything, including pensions and ISAS.  Pensions are going to be the best bang for your buck, but the money will be locked away until you are 58+ (for a private pension, taking your age into consideration.)

Obviously you are in a tricky situation at the moment with your wife's work, but I would start by examining all of your expenses.  Do you know what the easiest way to guarantee that you make x percent on your savings is?  It is to cut your expenses and put x percent more away every month! (Yes, it is a bit silly, but you get the idea! :  )

Then saving an emergency fund, three to six months living expenses (This just has to cover your bills, as you wouldn't be going out on the town every night if you weren't working for instance.)  Then decide what sort of income you think you want in retirement and start paying into your pensions accordingly.  Many people also have an ISA for the money they may need to retire on before they can access their pensions.  Even if you decided to work well into your sixties it would just become extra spending money!  Don't forget to include your mortgage within your planning too.  There have been many discussions on here about whether paying the mortgage off asap is the right thing to do in the long run as interest rates are so low at the moment.

So, basically decide what your goals are in life and then look at the big picture and try to give yourself options, don't just concentrate on one area would be my advice, for what it is worth :  )

Albermarle

I thought the common belief was there would be no state pension sooner rather than later?

Not sure where you have got this idea from - Facebook or similar maybe ?

Currently the SP has the triple lock , which means it has pretty much guaranteed increases over and above the average worker.

Any rational person knows this is too generous and costly, but anytime it is mooted to even just tinker with this there is a massive outcry ( especially in the Daily Mail ) and the idea is quietly dropped. Can you imagine the reaction to actually stopping the SP ? It would be political suicide and the Party that proposed it would never be voted in again. Hence it will never happen . At worst the annual increases will be delinked from inflation but even that would take a very brave ( foolhardy even ) PM

kangoora

Assuming you both qualify for SP (currently £19k for a couple) then you should be in a reasonable position when you start to add it all up based upon your £18k (which I would class as a minimum for a couple to be honest, others more frugal than me may disagree).

Add in Civil service pension, Tesco pension (a portion should be DB, they only went DC a few years ago) and your wifes local government Teaching assistant pension (also DB?) and any other pensions she has. With the pensions you mention I would be surprised if you weren't looking at mid 20k's in guaranteed pension assuming you retire at SP age and were full-time employed when accumulating pensions.

Once you understand how much potential income you will have in retirement you can then look at what you can do to improve it/retire earlier than planned.

What you also need to consider is the situation if one of you passes away, how much income (and expenses) would the survivor have?

Thrugelmir

FunLovinCriminal said:

So roughly, if we eliminate the mortgage, we would need £1500 a month for food, petrol, gas, elec, living expenses etc - and that would leave us with a couple of hundred for fun, hols etc. 
So we would need £18k pension a year, between us.

Over 20-30 years of retirement. You'll need money for one off items of expenditure.