FIREside Chats

edinburgher

@Suffolk_lass - the "add it to your DB pension BYOP (bring your own pension) scheme" worked really well. Back in the day I brought a very low 5 figure pension to the Civil Service scheme and got something like £1,500 a year in return. A fab deal IMO.

@Cornish_mum - no need to apologise for your circumstances, I'd never judge somebody who was lucky (unless they were obnoxious) Is your "per child" amount based on anything? I ask as it's a "life distorting"? sum of money to receive (best phrase I could come up with) and there is some evidence to show that some people don't cope so well with these. Still, you know your own kids and their capabilities

Cornish_mum

Thanks Ed, the amount is based on what I received (over the course of 10 years, in gradually increasing amounts from 3 different relatives), I agree it’s an absolutely life distorting amount. For us it has meant we can afford to live very  near to MrCMs work, so he could give up a hideous car commute and can bike to work.

I don’t feel it’s my money (as I didn’t earn it) and the family wish is I pay it forward and prepare the kids to receive it without it making them go bananas. 

Currently the actual money is all tied up in our house equity (we live in a very expensive area which we could not have afforded on our actual salaries). Hence my plan to pay it back into a liquid asset for when it’s my turn to pass it on.

 In real life I find it all excruciatingly embarrassing and hate people knowing about it. Though house makes that sort of impossible.

greenbee

@Cornish_mum - just delurking to say that Ethical Consumer regularly report on ethical funds. I've used them to help with pension/ISA investments and in general they have outperformed the market. Having said that, salary sacrifice is a very efficient way to fund your pension, and as you say, low admin. The information might be handy for ISA investments.

@edinburgher - thanks for an interesting thread. I've got some thinking to do - I'm not sure I'll be able to retire early, as my lack of attention to my pension early in my career means that I didn't invest early on.

I've also got far too many pensions - one from opting out of SERPs for a bit, a small DB pension from when I wasn't earning much, a small DC pension when I also wasn't earning much, two SIPPs that have been both personal and employer pensions at various stages, a bigger DC pension from my last job (but only 2.5 years) and the appalling pension from my current (US) employer where I am paying (and getting from them) less than I have ever paid for an occupational pension, despite being on a very good salary. 

For the last 7 years I've been renovating my house, so most of my spare cash has gone to that. I think I'm on the home stretch (there's some landscaping to do, and then the usual maintenance/redecorating) which should mean increasing savings/pension/mortgage OPs from next year if all goes well. The house situation combined with work meant I took the eye of the ball with my pensions and S&S ISA and wasn't managing them as actively as I had in the past. This means that they are in far too many funds, but I'm nervous about consolidating as it costs so much to do. 

I had covid last March, and still have long covid. This means I didn't top up my pension at the end of the last tax year despite going through the pain of working out my carry over - thankfully they've raised the threshold so that I'm no longer anywhere near the limit! It's a pity, as it would have reduce my tax bill significantly. This year I have paid a lump sum in (having finally had the kitchen done, so felt able to part with some cash savings), although not as much as my carry over allows (I don't have £80k to spare sadly) and also topped my my S&S and cash ISAs - both of which I need to consider transferring this year. The cash one is my emergency fund in case of unemployment while the S&S one is currently with Interactive Investor, but I'm not active enough for it to be the right place for it at the moment. I have a least been OPing the mortgage over the last year while cash-flowing as much as possible in terms of work in the house/garden and some eye-wateringly expensive dental work. That will probably stop, as from May I've increased payments into one of my personal pensions to compensate for my work pension. 

What long covid has brought home to me is the need to be flexible. While I intend to keep working for as long as I can, it might not always be at this level and as well paid (I'm an expensive luxury for an employer right now, although I'm trying to build some more useful long-term skills), and I may well want to work less intensively/fewer hours at some point. Now seems to be the point at which I need to maximise pension, savings and mortgage OPs while I can. As I have no dependents, I am aiming for that tricky balance between having enough to last me, and spending it all during my lifetime!

ETA - thanks to this, I've made the effort to look into pension details from my current employer. I should obviously have checked it earlier, but for the last 6 months they have underpaid both my contribution and theirs significantly. So tomorrow morning is going to be mostly spent sorting that out! Getting the payment right from this month onwards and more importantly getting them to pay in what they owe as an employer contribution. 

edinburgher

@greenbee - well done for checking that. One of my old employers messed that up for nearly 5 years. I checked it, chased them and got them to make up the difference, fix it going forward and pay the lost investment growth by means of an acturial check and additional payment. Might be worth chasing your mob to do the same. Took my then pension from mid 4 figures to 5 figures and I've never felt so empowered

greenbee

Thanks @edinburgher - it's getting their contribution that's the most important, although as you say, compensation for any lost investment growth would be good. My end-of-year activity means I've more than made up for what I would have put in myself (just put it somewhere else). As it isn't salary sacrifice that simplifies things a bit too. 
It just shows how important it is to check these things - electronic payslips/too much paperwork/too busy working make it easy not to spot things. What's most irritating about it is that my last employer made an error with my pension too - I spotted it in the first contribution as their standard was 5% matched but I'd negotiated 8% matched to reflect my previous deal. 
The fact that this c*ck-up is below the legal minimum makes it worse - but I'm well aware of the limitations of our HR dept... I'm not sure they're a good long-term prospect, but it was a job when I was being made redundant, and is giving me some useful experience. 

killerpeaty

It's really interesting to read people from different stages and circumstances. I think it's wonderful for @Cornish_mum to want to pass on life distorting amounts, but it's not something I would plan on for myself. Possibly because I don't have kids!

@greenbee sorry to hear your employer has not paid over the correct amount. Shockingly, it's something that happens a lot and I've come across far too many sets of accounts with unpaid pension contributions, which is why I check my pension is paid every month. A lot of my colleagues are the same, checking their payslip for any miscalculations very month and any deductions. We're a paranoid lot. 

Also sorry to hear that you have long covid, I hope you are taking care of yourself.

Cheery_Daff

I'm enjoying reading about everyone's different circumstances too. I've finished my spreadsheet now, with four different scenarios, and concluded that, in order to be able to work 4 days a week til I'm 50 (9 more years) then leave work entirely, we need to have paid the mortgage off by that point, and have a plan to cover the deficit of £500 a mo th income between us for six years (£36,000). Doesn't matter if that runs our savings right down, as then my lump sum would arrive at the end of it.

Good to have a goal with some actual numbers (although vaguely disappointing in a stupid way that it's pretty much 'carry on doing what you were already doing' rather than anything more dramatic!)

I confess it never occurred to me that pension contributions might be wrong! 😮

killerpeaty

@Cheery_Daff Since your pension is DB, you don't really have an issue because the risk sits with the scheme. The scheme will have an actuarial review regularly to work out what the sponsoring employers should be paying in addition to the usual payments so if they don't pay your personal contributions it doesn't overly affect your pension because it gets mopped up. It matters (to me) for DC pensions because it is the individual who holds the risk of lack of growth and it's out of the individual's control. Usually delays are short but @edinburgher 's experience is the worst I've heard of for lack of contributions and that would have been devastating for growth. (Great work on getting the growth paid up too!)

listoflists

Thank you for this thread @edinburgher.
Why I am investing

We want to retire early. Currently MrLOL has just turned 60 and I am 57 this month. I work in a role that feels as though it belongs to someone much younger (or at least with a much better working memory than I now possess).  MrLOL was made redundant just over a year ago and has been working in a much lower paid role where, on balance, stress > remuneration.

How much do I think I need?

I’ve come relatively late to these marvellous forums and I have loved reading so many of your posters’ advice and comments, which have adjusted what I thought I needed (25 x expenses which seemed unachievable).  From my spreadsheets of the last 2 years I *think* long term we need £34K for our everyday living – clearly I am not as MSE as some, but I am trying to be realistic about what we can achieve, and I am never going to be self sufficient, or a marvellous fixer of things.  This won’t include anything huge (e.g. weddings, cars, new boiler), but does allow for random white goods failure (so long as it’s not more than 1 each year).  The caveat is that for the next 3-4 years I know we need far more as we are still supporting 2 offspring through the uni experience (rent, car expenses) which means £54K this year and possibly next and then hopefully a sliding scale down as they achieve proper separation from the mother ship. Both are very grateful for the support given and both are aware it’s not forever…

How am I going to get there?

This is where it gets blurry. MrLOL has just started to receive DB pensions to the tune of £22.7K (after tax).  If I retire later this year I could take my company DB pension of £10.5K. If I could stick it out until 60, this would become more like £13K. 

On top of the DB pensions, we have 160K (MrLOL) and 95K (me) in DC pensions.  I don’t know what the growth rate on MrLOL’s is but I don’t think it’s marvellous – this thread has made me write it on my to do list to check.  He’s no longer paying into it as it was with his last employment.   I know my Std_Lif one is not great, but I’ve had it since going part time in 1999 and it’s just chuntered on in the background. I’m currently paying in £200 a month with the government adding in their whack. 

We’ve also got £130K in a mix of cash ISA’s, premium bonds and regular savers and around £60K in medium/higher risk funds in a S&S ISA.  So, a confusing mix of risk averse (BIG emergency fund!) and gambler. 

How long do I have?

Well, I suppose none of us know that….  But, if you had asked me 18months or so ago I would have looked surprised and said I thought we were all supposed to work until we drop. Now I wish the answer could be tomorrow.

To add to the mix, we are not being the sensible retirees and ‘down-sizing’.  Well, the size will have to be smaller, but the aim is to move to a more expensive village. It’s still the aim that it will cost about the same though, so moving expenses will need to be factored in. 

Currently the pensions we get (what’s his is mine 😊) and our salaries cover the increased amounts we need to support the not-so-little-LOLs, so sensibly, we should just crack on for 2 more years and Bob’s your uncle.  BUT. Now I’ve started thinking about it, I so want to go earlier…. BUT I am very aware of Mr Micawber’s recipe for happiness.  So; dithering and likely to do so for a while.

greenbee

A friend who knows more than me has pointed out that with auto-enrolment there is a cap as well as a floor to qualified earnings. All of this is only serving to confirm that this employer is not a long-term prospect (we also get no employer-paid sick leave, and can’t carry over annual leave). They aren’t a small business - turnover last year was in excess of $10bn, and profits are healthy. I appreciate that (unlike many of my colleagues) I am very well paid, but as an indicator of whether/how an employer values their employees it is significant. Many of the managers offer a lot of unofficial flexibility (I do too, we’re not in a 9-5 job and I’ve always worked this way) but are very clear that it has to be kept quiet. 

Still, it was a job when I needed it, meant I got to save my redundancy money, and I’m learning some new skills and getting useful experience (including learning even more about pensions!).