Complete newbie - mid 30’s, no pension, what and where to invest?

Millyonare

coastline said:

Albermarle said:

Figures suggest around 1/3rd of homes are either rented from council or private rent. With the introduction of NEST government pension many will be paying in all their lives and giving it to their landlords. It's difficult I know.

You will have to explain this statement a bit more?

NEST is very similar to all other pensions. Same rules, laws & tax apply. It just happens that NEST was set up by the government to help kick start auto enrolment. So it is not a 'government pension' in the normal understanding.

Why would paying into NEST/any pension, be giving it to Landlords?

If you don't own your home you'll be paying rent to someone. There'll be a cut off point for support over and above the state pension. ? Let's say your rent is £600 a month and that's not as expensive as some. So  £7,000 a year. You'll need to find this out of your pension pot. Well most of it surely ? Realistically you'll need a pot of £300,000 and the rent would eat up most of that. ? £300,000 in years to could be nearer a million. ? Not saying pensions are bad they're a good thing. People need to benefit from them . No doubt the government encouraged people into pensions but it's not clear why ? In many cases as I've tried to explain all it will do is reduce the state help people get today. They'll be wondering why they've bothered. Some will win but not all.

Rent = rent from a landlord
Mortgage = rent from a bank

Owning vs. renting is about the total cost of lifetime ownership (TCLO) and the sums are much more marginal than many realize.

This example is from Canada, but the market is broadly similar to the UK.

https://youtu.be/Uwl3-jBNEd4

Duncannnn

Eyeful said:

As others have said start a Pension

For now forget the books but have a look at these:

I’ll give that a good read thanks 

eskbanker said:

If you're paying into a HTB ISA then that would imply that you want to buy a property at some point, what's stopped you from doing so thus far?

Lack of pension is the biggest red flag here, so rectifying this should be a priority....

I was going to buy this year, however I couldn’t see much value in the market with properties in our area selling for 10 to 20k above asking. We decided to hold off and see what happens.

Although the intention is to buy in the next year.

I guess the advice will be to see a financial advisor but can anyone recommend a pension to pay into?


Thanks 

xylophone

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/personal-pensions

You have a very wide choice of pension providers.

Just a few shown here  by way of example.

https://www.money.co.uk/pensions

Or you might find that the Vanguard Target retirement option would suit you.

https://www.vanguardinvestor.co.uk/investing-explained/what-are-target-retirement-funds?cmpgn=PS0220UKPAGTR0001EN&s_kwcid=AL!11156!3!575252445541!e!!g!!target retirement funds&gclid=EAIaIQobChMI5Y-e6Ji4-QIVtpBoCR0ElA4wEAAYASAAEgJPj_D_BwE&gclsrc=aw.ds

Or you could try finding an IFA here

https://adviserbook.co.uk/

You would tick "confirmed independent" and such other options as required.

pjread

Duncannnn said:

Eyeful said:

As others have said start a Pension

For now forget the books but have a look at these:

I’ll give that a good read thanks 

eskbanker said:

If you're paying into a HTB ISA then that would imply that you want to buy a property at some point, what's stopped you from doing so thus far?

Lack of pension is the biggest red flag here, so rectifying this should be a priority....

I was going to buy this year, however I couldn’t see much value in the market with properties in our area selling for 10 to 20k above asking. We decided to hold off and see what happens.

Although the intention is to buy in the next year.

I guess the advice will be to see a financial advisor but can anyone recommend a pension to pay into?


Thanks 

I know someone who has been 'waiting for the crash' for 10+yrs though, and has just decided to buy now - they'd be half way to paying off a mortgage by now with the rent they've paid in the meantime, even without commenting on any change in asking/sale prices. 

Albermarle

A financial advisor would probably not be interested at this level for pension contributions etc and not really necessary to have one anyway just to get started.

 Firstly you need to be clear that the pension provider is more of a facilitator/administrator, and your money is invested in funds within the pension, which you have to choose. Some will point you in the right direction( as will this forum ) but they will not directly say an investment is suitable for you , as that is personal financial advice. A pension is just a tax beneficial way of investing.

There are many pension providers that are reputable and safe, but whatever investments you choose may go up or down ( but hopefully up in the long term) 

Suggest as a starting point you read up about the basics of investing. Investing in stocks for beginners: how to get started - MSE (moneysavingexpert.com)

Investing for beginners: Why do we invest? - Monevator

If you go to the websites of these pension providers, they all have sections giving general info for newbie investors.

Hargreaves Lansdown; Vanguard; Fidelity; A J Bell ; Standard Life etc

inflationbuster

Buy a house renting is for mugs.

Steve182

inflationbuster said:

Buy a house renting is for mugs.

I agree. Last thing you need in retirement is to pay half your pension in rent.

Additionally if you rent it's never your home.  I own my own home and my wife and I have spent thousands of pounds and hundreds or thousands of hours making the house and garden to our liking, We've added landscaping, paths, planted borders, gazebo, summer house, sheds etc etc. 

Point is, if you buy it it's yours, if you rent it it's never yours and any time or money you spend on improvements are ultimately going to benefit someone else in the end....

Steve182

Millyonare said:

coastline said:

Albermarle said:

Figures suggest around 1/3rd of homes are either rented from council or private rent. With the introduction of NEST government pension many will be paying in all their lives and giving it to their landlords. It's difficult I know.

You will have to explain this statement a bit more?

NEST is very similar to all other pensions. Same rules, laws & tax apply. It just happens that NEST was set up by the government to help kick start auto enrolment. So it is not a 'government pension' in the normal understanding.

Why would paying into NEST/any pension, be giving it to Landlords?

If you don't own your home you'll be paying rent to someone. There'll be a cut off point for support over and above the state pension. ? Let's say your rent is £600 a month and that's not as expensive as some. So  £7,000 a year. You'll need to find this out of your pension pot. Well most of it surely ? Realistically you'll need a pot of £300,000 and the rent would eat up most of that. ? £300,000 in years to could be nearer a million. ? Not saying pensions are bad they're a good thing. People need to benefit from them . No doubt the government encouraged people into pensions but it's not clear why ? In many cases as I've tried to explain all it will do is reduce the state help people get today. They'll be wondering why they've bothered. Some will win but not all.

Rent = rent from a landlord
Mortgage = rent from a bank

Owning vs. renting is about the total cost of lifetime ownership (TCLO) and the sums are much more marginal than many realize.

This example is from Canada, but the market is broadly similar to the UK.

https://youtu.be/Uwl3-jBNEd4

If you have some ambition for your property and you want to make your house and garden the way you want it for the rest of your life, it's not about rent £ vs purchase £. You need to own it before you can improve it. Otherwise you are just going to waste money and effort improving someone else's investment, until you eventually leave or are kicked out, and all you've put in just enhances someone's rental return....total !!!!!! really...

If you own it you can build things like this, and they're yours forever -



Or rent from a landlord this is likely what you will get. If you're happy with that garden, that's OK.

barnstar2077

Buying a house is a no brainer imo.  I bought my property about twenty years ago.  I currently pay £54 for my mortgage where as my ex pays £900 a month rent for the same size house with a smaller garden.

Some people will try and tell you that the upkeep on a home will offset the savings, which is madness.  Even when I first bought my house the mortgage payments were cheaper than renting and that gap has just widened every year.  I'm saving ten grand a year compared to my ex, and will be saving that (and more) for the next forty'ish years with a bit of luck.  I think that should cover the cost of a few boilers and the odd bit of decorating.

It also unlocks the possibility of earlier retirement as your monthly living expenses are so low.

I wouldn't worry about trying to save ten or twenty grand, I would get on it now if I were you!

Exodi

Duncannnn said:

Eyeful said:

As others have said start a Pension

For now forget the books but have a look at these:

I’ll give that a good read thanks 

eskbanker said:

If you're paying into a HTB ISA then that would imply that you want to buy a property at some point, what's stopped you from doing so thus far?

Lack of pension is the biggest red flag here, so rectifying this should be a priority....

I was going to buy this year, however I couldn’t see much value in the market with properties in our area selling for 10 to 20k above asking. We decided to hold off and see what happens.

If I had a penny for everytime I had heard this...

For my personally, just going by what Nationwide would auto-value my property in a remortgage scenario (not optimistic estate agent valuations), my house has appreciated by over £80k in 3 years.

This is on top of the £36k of principal I've paid off through mortgage payments in the same period. The icing on the cake? My mortgage payment is less than I would pay in rent for the same thing.

At this point I think the only people that suggest renting over buying only seek to validate their own decision not to buy.