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  • Welcome to this thread :)

    The hardest thing to do is to get your head round the figures and it probably took me a couple of years to fully get to grips with the gaps in our savings and devise a plan to address these.  I woke up to active pension saving at 40 ish when the desire to retire at 55 became really strong.  Six years on I still find things to tweak with the plans, say to make them more tax efficient.

    My approach is to be clear about my annual income target in retirement. Others have comfortable and luxury levels - but I am simply aiming to maintain our current lifestyle with a bit of scope for more discretionary spending. We have also set ourselves a lump sum savings target (£75-£100k) for an emergency fund, car replacements, the occasional big holiday etc.  I've kept things simple by setting our annual income target to be the same as we spend as a family of 4, less retirement savings and any (0%) debt, so there should be some contingency built into our figures.

    The next stage for me was to create a simple forecast for each year of retirement (a column for each year), recording the different types of income for myself and my husband on the left hand side of the spreadsheet and the values expected against the years/ages the income will be payable from.  I do this in todays money as I find this more relatable. From there I could work out where my savings gaps were. So we are now playing catch up with my husbands DC works pension to ensure he has enough in the pot to drawdown what we need from 57ish to state pension age. And we're saving into ISAs (to fund years 55-57) and a personal pension for me (to fund years 57-59) before I take my LGPS pension at 60.

    One big consideration for us was the 'what happens if one of us dies' scenario. The plan is for my husband to use the bulk of his DC to help fund years 57-67, which could leave him financially vulnerable if I die. But he'd get half my DB pension (around £7.5k now, possibly £10k if I stay in the scheme another 7 years). And he should have a decent amount left in his pension too, but this is being monitored. If we need to we'll save more we will.  
  • Suffolk_lass
    Suffolk_lass Posts: 10,270 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Hi @earthgirl2 and welcome (lots of different views and experience on here and lots of lovely support).

    I think in your position I would plan to work at least until your youngest is minimum 18 (10 years time?) and in that time I think you need to consider a number of areas.

    Building up your existing S&S ISA with Vanguard. I would not be higher than 60% equity (based on financial advice we have received) if you are within 10 years of finishing work. Some will argue for 40%. It will be interesting to see if their advisor agrees with that. I would be putting a slightly increased amount into this now, as although you don't get the tax relief on it going in, you can get it out when you need to. If you have enough in there to let you boost your income ICE across your gap years, you may well be sufficiently secure.

    2nd area is a SIPP - I also have high confidence in Vanguard retirement pension plans - if you go for a nearer date, the growth is lower because the risk profile is lower - you could consider two Vanguard plans in your new SIPP, one for earlier and one for when you might actually want to access it (the earliest for either is likely to be 10 years before State Pension Age (SPA) but could be changed - as could SPA) - that's why boosting your S&S ISA is a good idea.

    By the way, when my DH and I inherited a small pot we bought him about £2500 per annum (and £1250 survivor benefits) of extra Teacher's pension so it is an additional option but only up to the point where you take it (them).

    And I believe if you wanted to you could sacrifice some of your accrued lump sum benefits to buy extra income (this is something you could decide upon when the time comes if you are concerned about your husband's longevity) - it's called inverse commutation - there's loads of information about people doing the opposite, increasing their TFLS to the full 25% but I am sure you certainly could under the FS version. It is very poorly advertised. 

    The other thing for both of you to consider is how you maintain your NI Contributions towards State Pensions after stopping work. I note that the lowest payment option is Class 2 voluntary and this includes exam invigilators. This might be something for your DH to consider when he stops work. For you, it might be that if your DH had a health condition, you could additionally/alternatively claim carer credits, if he is able to claim the attendance allowance equivalent benefit. 

    I am always aware that the rules are changed with insufficient time for people's long term plans to adapt fully, as I have said in previous posts on here, (as my goalposts were moved with the New and Basic SP penalising those of us formerly in occupational pensions where we opted out of SERPS, as well as the SPA increasing from 60 to 66 when I had less than ten years to go). I am in the position where I don't have enough time to get back to a full pension, even buying the years up to the end of the tax year before I reach SPA. So you do need a bit of contingency and to be able to shimmy as the rules change.

    Very interested in what the advisor says (in general terms, not too specific to you, obviously), if you are happy to share.


    Save £12k in 2025 #2 I am at £4863.32 out of £6000 after May (81.05%)
    OS Grocery Challenge in 2025 I am at £1286.68/£3000 or 42.89% of my annual spend so far
    I also Reverse Meal Plan on that thread and grow much of our own premium price fruit and veg, joining in on the Grow your own thread
    My new diary is here
  • Cheery_Daff
    Cheery_Daff Posts: 17,108 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Thank you all for continuing to share. All your wisdom is slowly seeping into my brain. 

    I think I've shared before that we have a large age gap (18 years), and Mr Cheery has already taken his works pension (early, but he left work years ago so wasn't paying into it anyway). 

    I created a spreadsheet with several different scenarios - me dropping to four days, dropping to 3 at certain points, giving up work altogether at 50 (I'm 41 now). I absolutely do NOT want to be working til 68 - Mr Cheery will be 86 at that point.

    I checked the spreadsheet last night and was pleased to see that my wages have already increased compared to my modelling, and will likely increase again later this year. I've dropped to 4 days already so my full time scenario is already out 😂

    I do need to go back to regularly overpaying the mortgage though - most scenarios were based on at least some overpayment and I temporarily stopped that when I dropped my hours, as we were also in the middle of work being done to the house.

    Our plans mainly rely on overlapping wages/pension at various points.

    2022 - my wages, Mr C's LGPS pension

    2029 - my wages (down to 3 days??), Mr C's LGPS and state pension

    2038 - both Mr C's pensions, and the earliest I can take my works pensions (the lump sum would pay off the remainder of the mortgage if it's not gone already)

    2048 - add in my state pension, although as I say by that point we'll be 68 & 86.

    If I die, we've got life insurance to pay off the mortgage, a hefty death in service payout if I'm still working, and Mr Cheery will have both his pensions, plus whatever he'll get out of mine, so he'll be fine. He'd likely sell up and move to a smaller less ridiculous/rural house which would free up a load of cash.

    If he dies first (more likely I guess) I'll get a bit of his works pension (about £400 a month), and that's it. So I'd have to keep working, which is fine - and I'd also have the option of selling up and going somewhere smaller.

    Anyway, all this waffle is just a reminder that I need to
    * update my spreadsheet
    * change the mortgage DD to include regular overpayments again
    * figure out once and for all how to pay Mr C's class 2 NI contributions 
    * check (again) our missing NI years and pay them off

    If I want to give up work at 50 (in 2030), I think I worked out we'd need an extra £36,000 to keep a reasonable level of spending before my works pension kicked in at 58 - but I want to check that figure. Needless to say we don't have it at the minute, but it feels manageable to save it within the next 9 years or so!
  • Suffolk_lass
    Suffolk_lass Posts: 10,270 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    I'm going to have to place a query with Contributions Agency over my two missing NI years - I was at Uni but I worked through the hols and part time in a restaurant throughout. I also never had any correspondence suggesting I needed to pay anything to make them up to full contribution years. It would be the difference between a full SP and not from what I can see.
    Save £12k in 2025 #2 I am at £4863.32 out of £6000 after May (81.05%)
    OS Grocery Challenge in 2025 I am at £1286.68/£3000 or 42.89% of my annual spend so far
    I also Reverse Meal Plan on that thread and grow much of our own premium price fruit and veg, joining in on the Grow your own thread
    My new diary is here
  • earthgirl2
    earthgirl2 Posts: 498 Forumite
    Part of the Furniture 100 Posts Photogenic Name Dropper
    edited 17 February 2022 at 1:38PM
    Retireinten and SL thanks so much for your help and advice. Totally invaluable and I'm off to make spreadsheet and research the NI's now. Yes I'll let you know what the advisor says. Cheery we are in a very similar position with ages and gaps!

    Retireinten - congrats on the job!
    Save £20,000 in 2025. April 2k, May 3.5k
  • I'm going to have to place a query with Contributions Agency over my two missing NI years - I was at Uni but I worked through the hols and part time in a restaurant throughout. I also never had any correspondence suggesting I needed to pay anything to make them up to full contribution years. It would be the difference between a full SP and not from what I can see.
    I would be interested in the reply you get to this.  Like you my gap is the university years, which are marked as incomplete contributions.
    Mortgage Free November 2018
    Early Retired June 2020
  • CCW007
    CCW007 Posts: 1,081 Forumite
    Sixth Anniversary 1,000 Posts Name Dropper
    I'm going to need to recalculate my projections for a very nice reason.  I've been offered a job with a £10k+ increase - still under LGPS and all the same conditions so I assume my LGPS will just continue but under a different management organisation. 

    My contributions percentage will increase but even if I get to the top of this salary band they won't increase again. 

    Unlike my current role (where I have had one performance related pay rise in 6 years when I achieved my professional qualification) I have the opportunity for incremental increases each year so could hit the top of my band in 4 - 5 years.   

    It is a scary grown up job though - I am hoping (if I enjoy it) this will see me through to retirement.  If so, the chance of retiring in 10 years at 55 has just become more realistic.   

    Working my three months notice, start mid May, by which time I will hopefully have an updated LGPS statement.
  • Cheery_Daff
    Cheery_Daff Posts: 17,108 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    CCW007 said:
    I'm going to need to recalculate my projections for a very nice reason.  I've been offered a job with a £10k+ increase - still under LGPS and all the same conditions so I assume my LGPS will just continue but under a different management organisation. 

    My contributions percentage will increase but even if I get to the top of this salary band they won't increase again. 

    Unlike my current role (where I have had one performance related pay rise in 6 years when I achieved my professional qualification) I have the opportunity for incremental increases each year so could hit the top of my band in 4 - 5 years.   

    It is a scary grown up job though - I am hoping (if I enjoy it) this will see me through to retirement.  If so, the chance of retiring in 10 years at 55 has just become more realistic.   

    Working my three months notice, start mid May, by which time I will hopefully have an updated LGPS statement.
    Fantastic,  well done! 😊😊😊
  • Suffolk_lass
    Suffolk_lass Posts: 10,270 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Congratulations @Retireinten and @CCW007
    how great for both of you! Well done.

    @Staffordia
    I have drafted my letter to the Contributions Office, part of HMRC, using the address that Citizens Advice suggest (it is a generic post-handling location but I think it will be rerouted to Newcastle). The advice is to send it registered (receipted or tracked, so proof of delivery) by post, so we need to go to the Post Office when the weather permits.

    I have set out who I worked for, when and said I never received any notification that the years were incomplete and was never given the opportunity to make good the shortfall. I have said they are only important to me because they have changed the state pension level of qualification so that my SERPS years don't fully count any more. I will post an update when I receive one (expect months, rather than days or weeks)
    Save £12k in 2025 #2 I am at £4863.32 out of £6000 after May (81.05%)
    OS Grocery Challenge in 2025 I am at £1286.68/£3000 or 42.89% of my annual spend so far
    I also Reverse Meal Plan on that thread and grow much of our own premium price fruit and veg, joining in on the Grow your own thread
    My new diary is here
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