A Paupers Pension Tale (Not many nuts to dig up)

Daffodil1234

Thanks @barnstar2077 - it is very helpful to see people's updates.  You mentioned about retiring at 55 - could I ask, do you expect to have no further mortgage or rent at that point ?

Also very interesting to hear your decision to be 100% equities, hope that works well for you.

[Deleted User]

Can I ask how much annual income you are planning to have between the ages of 55 and 67?
The 70000 ISA and 50000 tax free part of your SIPP would give you 10000 a year over 12 years plus another potential 5250 a year from the remaining. SIPP at a withdrawal rate of 3.5%.  Looks a bit tight though. Just being curious as always lol!

barnstar2077

Daffodil1234 said:

Thanks @barnstar2077 - it is very helpful to see people's updates.  You mentioned about retiring at 55 - could I ask, do you expect to have no further mortgage or rent at that point ?

Also very interesting to hear your decision to be 100% equities, hope that works well for you.

I started my mortgage at 24 and extended the term a few years ago to reduce the monthly payments and allow me to concentrate on my ISA and SIPP.  So I am currently paying £70 a month until my 67th birthday.  Doing this should allow me to retire a year earlier than if I were to use my funds to pay it off today.

barnstar2077

[Deleted User] said:

Can I ask how much annual income you are planning to have between the ages of 55 and 67?
The 70000 ISA and 50000 tax free part of your SIPP would give you 10000 a year over 12 years plus another potential 5250 a year from the remaining. SIPP at a withdrawal rate of 3.5%.  Looks a bit tight though. Just being curious as always lol!

My current plan is to spend £40k of the £70k ISA to get me from 55 to 57.  As my outgoings are so low (currently £520 a month for all bills) this will allow me to have a fantastic couple of years doing all kinds of things and really celebrating achieving my goal.  Then I will keep the remaining £30k invested in my ISA as my new boiler/house repairs fund.

From 57 to 67 I can spend roughly £17k a year from my DC pension (with a lot of flexibility), which will give me £30k+ to top up my state pension with until it runs out, probably in my mid to late seventies.

Obviously we are not talking about big numbers here, but this is the Paupers thread after all.

I have a lot of flexibility on when I pull the trigger and worst case scenario (other than me being hit by a bus! :  ) I will work in some capacity, further reducing my hours for instance, until I am 57, which would greatly boost my available funds.

If I worked until I was 67+ I could probably retire a millionaire (including the value of my house), but that money won't help me in the graveyard :  )

Time and health are the only things that I value.  Money is just a way for me to get to where I want to go.

gambleruk

barnstar2077 said:

PS  Has your pension transfer gone smoothly @gambleruk?  As high risk/high reward as I am, I don't think I could move my pension around for signup bonuses, it would definitely stress me out! :  ) 

The pension transfer has gone as planned, did it In Specie so was never out of the market and the £1500 should appear in my account at the end of the month, I will be paying roughly £700 more in charges over the next 12 months but still a nice profit of £800. I just tried to forget it was happening so it wouldn't stress me out, though when I logged into II one day and saw my balance at zero was a little scary as it was a few days before it appeared in my HL account lol.
I am 18 months off turning 55 so I will then start moving my funds tax free into an equvalent stocks and shares isa, I will probably do a separate post nearer the time just to make sure I have all bases covered but since I am with HL I am also thinking of leaving 30k in there when I transfer it out next year then use the small pots rule to withdraw it out alongside the tax free amount from where ever my main pension will be then, if anyone can confirm I can do this it will be much appreciated.

Albermarle

gambleruk said:

barnstar2077 said:

PS  Has your pension transfer gone smoothly @gambleruk?  As high risk/high reward as I am, I don't think I could move my pension around for signup bonuses, it would definitely stress me out! :  ) 

The pension transfer has gone as planned, did it In Specie so was never out of the market and the £1500 should appear in my account at the end of the month, I will be paying roughly £700 more in charges over the next 12 months but still a nice profit of £800. I just tried to forget it was happening so it wouldn't stress me out, though when I logged into II one day and saw my balance at zero was a little scary as it was a few days before it appeared in my HL account lol.
I am 18 months off turning 55 so I will then start moving my funds tax free into an equvalent stocks and shares isa, I will probably do a separate post nearer the time just to make sure I have all bases covered but since I am with HL I am also thinking of leaving 30k in there when I transfer it out next year then use the small pots rule to withdraw it out alongside the tax free amount from where ever my main pension will be then, if anyone can confirm I can do this it will be much appreciated.

What is the reason to move the tax free part of the pension into an ISA? There is often no obvious benefit so why not just leave it in the pension until you need it ?
I am sure you can take 3x small pots from HL, but for what reason? There is no tax benefit, but you will not trigger the MPAA, so will still be able to contribute more than £10K pa to a pension. Is that the reason?

gambleruk

Albermarle said:

gambleruk said:

barnstar2077 said:

PS  Has your pension transfer gone smoothly @gambleruk?  As high risk/high reward as I am, I don't think I could move my pension around for signup bonuses, it would definitely stress me out! :  ) 

The pension transfer has gone as planned, did it In Specie so was never out of the market and the £1500 should appear in my account at the end of the month, I will be paying roughly £700 more in charges over the next 12 months but still a nice profit of £800. I just tried to forget it was happening so it wouldn't stress me out, though when I logged into II one day and saw my balance at zero was a little scary as it was a few days before it appeared in my HL account lol.
I am 18 months off turning 55 so I will then start moving my funds tax free into an equvalent stocks and shares isa, I will probably do a separate post nearer the time just to make sure I have all bases covered but since I am with HL I am also thinking of leaving 30k in there when I transfer it out next year then use the small pots rule to withdraw it out alongside the tax free amount from where ever my main pension will be then, if anyone can confirm I can do this it will be much appreciated.

What is the reason to move the tax free part of the pension into an ISA? There is often no obvious benefit so why not just leave it in the pension until you need it ?
I am sure you can take 3x small pots from HL, but for what reason? There is no tax benefit, but you will not trigger the MPAA, so will still be able to contribute more than £10K pa to a pension. Is that the reason?

My plan is to move all of my pension into an ISA so when I do start to take the money it will be all tax free, I will have 12 years until SP so ideally when I get my SP all my money will be in an ISA and not a pension then I will have no tax to pay, the chances of me ever going back to work are pretty much zero at this stage hence the plan or am I missing something here ?

Simon11

Keeping it in the pension, gives it the best chance of continuing to grow as much as possible (tax free too) and thus give you more money when you do eventually decide to take out your 25% tax free with a specific purpose in mind.

For what reasons do you need the money now or do think you will see it grow more in an ISA -v- pension?

gambleruk

Simon11 said:

Keeping it in the pension, gives it the best chance of continuing to grow as much as possible (tax free too) and thus give you more money when you do eventually decide to take out your 25% tax free with a specific purpose in mind.

Sorry probably not explaining it clearly, my pension is currently in Vanguard Vls80 so the plan is to open a stocks and shares ISA and use my tax free pension money every year to buy Vanguard Vls80 in that so basically all I am doing is changing from a pension to an ISA so when the time comes to access my money which will be before SP anyway it will be there tax free.

michaels

gambleruk said:

Simon11 said:

Keeping it in the pension, gives it the best chance of continuing to grow as much as possible (tax free too) and thus give you more money when you do eventually decide to take out your 25% tax free with a specific purpose in mind.

Sorry probably not explaining it clearly, my pension is currently in Vanguard Vls80 so the plan is to open a stocks and shares ISA and use my tax free pension money every year to buy Vanguard Vls80 in that so basically all I am doing is changing from a pension to an ISA so when the time comes to access my money which will be before SP anyway it will be there tax free.

Makes sense to me, you don't want to leave any personal allowance unused and then end up paying tax once you get your state pension.  Also worth doing as it is a hedge against future govt pension rule changes.

Not sure if the small pots helps or not if the mpaa does not come into play?

I am expecting to get £600 from best invest soon for a switch of some funds to them which I think will then be able to be sent elsewhere, main pot is with II but I may look for a more circuitous route to get in there in return for any incentives - is the incentive thread still around somewhere?