Ideas for saving for retirement

Cecily40815

Hi

I'm single and 53, with savings of about £50k. I own my home with no mortgage.

I plan to work for at least another ten years. Can anyone give me any ideas on how to use my savings to boost my pension income? I will get a state pension and a (very small) private pension.

I'd be grateful for any suggestions. Thanks

MX5huggy

Are you employed, self employed, or director of a limited company? 

tacpot12

Do you know if you are going to get a full State Pension? If not, making up the NI contributions necessary will be probably the best way to boost your income once you reach the state retirement age. 

Cecily40815

I'm an employee. I have a few more years' NI contributions to go, but I will have a full state pension when I retire,

sevenhills

If you just add some or all of your savings to a pension(SIPP) you will get 25% tax relief and you can purchase unit trusts, alternatively Premium Bonds?

If you invest £4,000 in a SIPP, the tax relief of £1,000 will be added; you can then invest it in shares or unit trusts. Share can go up or down, but over a 10 year period, they are very likely to increase in value.

A SIPP can be put into drawdown, to withdraw 25% cash-free, when you reach the age of 55.

MX5huggy

So what is your company pension scheme? They have to offer you one, will they match any further contributions? do they offer Salary Sacrifice? Approximately how much do your earn? This will effect what you can do with the £50k is this money currently just in easy access cash? Are you currently adding to this on a regular basis? 

george4064

You need to provide more details on your private pension(s).

Are they Defined Benefit or Defined Contribution based?
How much are they worth?
Are you contributing to your current workplace pension?
How much are you contributing at the moment? (As % of your salary, employer and your contributions).

RG2015

Cecily40815 said:

I'm an employee. I have a few more years' NI contributions to go, but I will have a full state pension when I retire,

In ten years time you will be 63. The state pension currently is not available until the pensioner is 67.

The state pension age will continue to be raised. You may need to wait much more than 15 years to receive the state pension.

Therefore it is a certainly a good thing that you are considering your options now.

eskbanker

RG2015 said:

Cecily40815 said:

I'm an employee. I have a few more years' NI contributions to go, but I will have a full state pension when I retire,

In ten years time you will be 63. The state pension currently is not available until the pensioner is 67.

The state pension age will continue to be raised. You may need to wait much more than 15 years to receive the state pension.

Therefore it is a certainly a good thing that you are considering your options now.

While agreeing with the principle of planning ahead, it seems highly unlikely that OP would have to wait much more beyond 68 - under the current timetable the state pension age will actually still be 67 in the mid 2030s, although there's a possibility the move to 68 could be brought forward to around then:

Under the Pensions Act 2007 the State Pension age for men and women will increase from 67 to 68 between 2044 and 2046.

The Pensions Act 2014 provides for a regular review of the State Pension age, at least once every 5 years. The review will be based around the idea that people should be able to spend a certain proportion of their adult life drawing a State Pension. The first review must by completed by May 2017. As well as life expectancy, it will take into account a range of factors relevant to setting the pension age. After the review has reported, the government may then choose to bring forward changes to the State Pension age. Any proposals to do so would, like now, have to go through Parliament before becoming law.

The government is not planning to revise the existing timetables for the equalisation of State Pension age to 65 or the rise in the State Pension age to 66 or 67. However the timetable for the increase in the State Pension age from 67 to 68 could change as a result of the review.

In the Autumn Statement on 5 December 2013, the Chancellor announced that this government believes that future generations should spend up to a third of their adult life in retirement. This principle implies that State Pension age should rise to 68 by the mid-2030s, and 69 by the late 2040s.

However, the government is not currently legislating for this change – these dates are indicative only, showing a general direction of travel for future State Pension age changes.

Obviously there is an argument that these are extraordinary times, etc, and hence yesterday's announcements, but changes to the state pension age aren't easily pushed through and commitments have been given that adequate notice (at least ten years) would be given....

RG2015

Thanks @eskbanker, This is good to know.

I just wanted @Cecily40815 to be aware of the current position and the possibility of future changes.

It is good though that people can now get a state pension forecast online.

Cecily40815

Sorry it's taken me a while to come back to this.My gross salary is £26k. 

I pay into a NEST pension. I pay in 6% and my employer pays 8%.

I hope this helps!

Thanks