Future Proofing my life: Deposit saving then MFW journey in under 13 years

LadyWithAPlan

dawnybabes said:

Don’t forget that rate of drawdown is if you don’t want to touch the capital - you’ve no dependents (I think ??) so could use some of it too. My sister and her DH intend living off a mix of interest and capital - they plan to use the majority before they are 80 as they don't anticipate holiday / spending to be as much post 80 ! 

I think some fabulous holidays are great, they should enjoy the money - I have been lucky enough to travel and live abroad already and do still travel a lot for work and intend to do more which of course is tax deductible which helps . I think the home needs to be my focus this next decade.

Indeed I have no dependents though my property (if it ever gets bought), art etc will left to nephews/nieces etc.
You have reminded me as well that  on they say (Trump-horror economics  aside)  that ones investment doubles every 7 years in the markets on average so then my current £62k SIPP will be worth £124k in 7yrs  and £248k in 14 years which is when I would need it. £250k 4% is an extra £10k a year (so £7.5k more than my calcs above) so £27.5k pa.. or the SIPP would provide a lump sum towards the mortgage
its all a bit back of fag packet maths as I do intend to keep investing into the market.. however its good to have some kind of idea to motivate me.
I am not sure what I am getting paid before the tax year end so I will move some out of savings anyway - I have my own ltd company so the pension tax advantages are great

Doing my MB today including extra place horse and had a couple nice ones come in (its not gambling but building EV - i use software). I do however also have 2 winning horses in a 4 way horse acca (again this is a EV bet not me cherry picking horses) , unlikely all 4 will come in but they may place so thinking if i cash part of that out now or let it run which is better for EV.

Suffolk_lass

Have you looked at how much your DB pension would grow by if you delay taking it past the scheme's normal pension age (NPA) and compared this with sinking more of your income into SIPP if you continue working. Saying you are delaying it for tax reasons prompted this comment. A few people on here ensure they stay below the higher rate of tax by contributing more to their pension pot. Presumably as a contractor you also do a proportion of this through your own company and have set up an occupational scheme for yourself, in order to be able to contribute a bigger percentage tax free?

Watty1

This year I've been moving more money directly from my limited company into my pension pot. I should have been doing this years ago but i did not, and that is OK.  With PPH the focus was not on me and that is an issue I will always pay the price for.   (There really does need to be education around this stuff).

Anyway moving directly from my company to pension saves corporation tax. My accountant thinks if I did the sums it would be the same as the tax reclaimed if I paid myself and did it that way but paying direct from company to scheme seems a win for me somehow.  (it also meant I could track course sales direct into pension pot and that seemed such a win).

LadyWithAPlan

@Watty1 as you say at least you started now and you have time and the focus - I only started my SIPPs  5 years ago myself ! 

now it’s the house deposit v SIPP balance at least you sorted there 

I started paying into my SIPP April 2020 (£500 April 5th 2020) first as SE and then as soon as I started my ltd company direct from 
 that - it’s now £62k ish 
It’s Vanguard and I also have a HL small SIPP 
- a couple of years when it’s clear I wasn’t buying I moved some decent sums from my saved house deposit £15k one year . 
this year it’s really small contrib so far due to unpaid invoices so I will again move savings over if things don’t get paid 

Both HL and Van allow both personal and company contributions - I note my HL is about 10% of the size of my V one and yet the platform fees are about the same annually ! 

@South_coast on the years I have been HR tax payer since 2020 yes I added every penny over £50k into my pension as SE to become BR 
I also am finding some cash now to help with my tax bill 

Good idea SC on figuring out the ££ impact of deferring my DB - though I haven’t worked out though how to calculate that .. as I don’t know how they pay /amortise the extra back  so if it’s £7k a year and deferred for 5 to the max 6 years 

i do know that once I hit SP age they actually claw a bit back (I have seen online court cases went on about it )
I will google the amortisation of the deferment 

SURVEY MONEY 

£13.74 taken out prolific and added to TT cash isa alongside some interest so £17.69 moved over and £3.69 in interest in there 
current balance 
£1146.98 
this is my TT acct to keep me pushing forward 

TST 
I am thinking of stopping taking the TST from today and wait for the new  prescription from the doctor / put on 6-7 lbs in as many weeks and feel huge though I am not overeating - did have some absolute junk cravings but normally when I start more exercise my weight stabilises quick 
Also my mood and sleep is difficult plus the  Allergy reaction, I also feel super inflamed and bloated and constipated 
I will see if I have side effects from stopping it will probably take a week at least to feel the difference 

KajiKita

Tbh, I was wondering if you should just stop the TST for a bit, as a lot of issues seem to have started for you at about the same time, though it has also brought some benefits. Give your system a break from it. Might be worth waiting that week to clear it from your system before starting the new prescription so you can accurately assess the effect of the new one? 

KK

LadyWithAPlan

KajiKita said:

Tbh, I was wondering if you should just stop the TST for a bit, as a lot of issues seem to have started for you at about the same time, though it has also brought some benefits. Give your system a break from it. Might be worth waiting that week to clear it from your system before starting the new prescription so you can accurately assess the effect of the new one? 

KK

I took it this morning - I am determined to train every other day at least so I can  see if I can get these extra pounds off - many will be water I assume and bloating etc. hmm 
I do have more energy on it though so maybe using some up in daily exercise will get rid of other symptoms. Will give it til Wed as I have a busy week ahead  so then tackle any withdrawals next weekend 

EXERCISE 
I did my Insanity again tonight - thats 5 times in 8 days inc both Sundays. I guess I will start counting from Sunday so say 4 x last week and today os day one of this week.
I have to be in the office all week but late start Monday 10.30 so I will aim to train first thing, Its also walkable - about 40 mins so unless I am late or its raining I plan to walk there and back each day to get the steps in and also save on the £1.75 ew bus fare. Lots of traffic on the route and tube , i'd have to change lines so easier to walk.

Saw a friend Sunday eve as we cooking up an idea, he cooked and I brought over a bottle of that Giordoso rose prosecco, only had a glass though 

Suffolk_lass

LadyWithAPlan said:

@South_coast on the years I have been HR tax payer since 2020 yes I added every penny over £50k into my pension as SE to become BR 
I also am finding some cash now to help with my tax bill 

Good idea SC on figuring out the ££ impact of deferring my DB - though I haven’t worked out though how to calculate that .. as I don’t know how they pay /amortise the extra back  so if it’s £7k a year and deferred for 5 to the max 6 years 

i do know that once I hit SP age they actually claw a bit back (I have seen online court cases went on about it )
I will google the amortisation of the deferment 

I think it was me that queried this. Two things this prompts -

1. the scheme rules will set out what happens to your DB pension if you defer taking it. The key thing to consider in my view is the loss of income versus the amount it increases by deferring it. If it comes with a lump sum you can often use reverse commutation (take less lump sum, and more income) or commute this (increase the TFLS) to be 25% of the value of the pot. While commutation is readily available in scheme literature, you are likely to need to speak to the scheme administrators if you want to use reverse commutation
2. the "SP" age at which your DB pension may be clawed back (reduces) may be embedded in the rules too. I recall a female early retirement pensioner had hers reduced at 60 because the scheme had embedded that age rather than current SPA in their rules. So not only did her state pension disappear off into the distance for several more years before she could claim it, her occupational pension reduced to a point where she could no longer live on it, as soon as she was 60. I noted this was one of the big banks too.

LadyWithAPlan

@Suffolk_lass ah yes it was you - my mistake, apologies. 
I am not sure what 'commute this (increase the TFLS) to be 25% of the value of the pot.' means practically. I havent got my head around pension drawdown as yet. However I have now googled reverse commutation  and see its early lump sum and giving up tax advantages.
As far as I am aware my (big bank) small DB pension does not come with lump sum option and as its a DB one I assume its best to just keep it constant - its just under £7k pa i think - not bad for something I completely was unaware of at the time and I only worked there a few years. 

Practically I am not sure what my income will be at 60/65 (which seems to be getting surprisingly nearer)  however the bank 'clawback' at 67 is annoying and may indeed also then affect my calculations if i have deferred my pension, can they clawback more of my deferred peniosn - they probably can!!
. I guess worse case scenario I take the DB at 60 and add it straight in via my company SIPP as long as I earn more than that 

Allergies
I am still waking up with swollen eyes etc and feel huge (water retention/inflammation) so i stopped the TST yesterday and am back on anti-histamines as the dr prescribed. At least I have no wrinkles as my face is swollen. I have definitely put on 3kg since the TST but maybe some is water weight. I am only using 'safe' face products.

WORK
Busy week juggling various contract stuff. i am working in central London so I am walking 40 min each way there and back and with the cold spring sunshine its lovely and getting 14-15k steps in a day - think I need to keep exercising to help support my system. Not done any insanity since Sunday so planning to do so when I get home today.

Yesterday I worked in the day then saw a friend to help him understand this PPI tax refund as deadline is April 5th and then did a side hustle in the evening, a long day!
The company he used for PPI refund  (All&y) did take 25% cut of over £2.5k but have not sent him (wrongly) the final certificate so he has no clue how much tax they paid to HMRC on his behalf, apart from texts that their new company (TH&N Tax) are sending saying we can claim nearly £700 back. So he has now written to all the companies and also did data subject access request as the HMRC form 40 needs proof of what he paid them. I guess we can also look at tax return worse case if the company does not get back/

MONIES - joys of self employed continue
I am apparently being paid a decent amount Thursday and another company by end of week - i really hope so as want to add to my SIPP before tax year end. My Ynab is looking bare.

PIP  budget etc - just seeing the budget bits, I cant believe they are cutting/freezing disabled benefits for people. Seems incredibly unjust - we all pay into the system to support those that need help. Maybe looking at those 1% who hardly pay any tax due to all the  avoidance schemes  they use and shoeld companies etc..

Suffolk_lass

Commutation in my occupational pension scheme was taking a slight reduction in income to increase the lump sum (at a rate of £1 income = £12 additional lump sum). Reverse commutation would let you buy more income by sacrificing lump sum.

 You may well find, if you check your scheme rules, that there is either an automatic lump sum, or an option to take one, tax free, by giving up a bit of income. Also, in my scheme, if you had never married, at the point where you take it, you can ask for your spousal benefits contribution to be refunded. We paid a nominal 1.5% for this, but better than a poke in the eye, with a sharp stick, as Grannie used to say. I suspect your benefits are also index linked in some way, so £7k p.a. may be a bit more when you take it. As you suggest, you would need to still be earning more than that pension to be able to legally put it in your SIPP, and given the tax benefits of doing so, it might work well for you. That, or paying down your mortgage

savingholmes

Hope the money comes in for your pension investments. 

I a hoping that if I get my business up and running - and am successful - that I can put most of my earnings after costs into pension. Time will tell.