Cash SIPP advise

[Deleted User]

Hi all,

Currently 50 and looking to retire at 60. Plan is to build a fund to draw on for 7 years income.

I am looking for a product which I can pay into to get the 25% uplift without the stress of watching my balance fluctuate as time goes on. I just want to put in £400 per month, get the £100 uplift, and at the end of 10 years have £60000 in the Sipp to draw on for the 7 years between retiring and accessing State Pension and company pension.

Not interested in investing so to speak, just want to know that if I pay in £x in 10 years I will have £y.

Links to any suitable products would be great and any information on charges too.

Thanks.

Marcon

Deleted User said:

Hi all,

Currently 50 and looking to retire at 60. Plan is to build a fund to draw on for 7 years income.

I am looking for a product which I can pay into to get the 25% uplift without the stress of watching my balance fluctuate as time goes on. I just want to put in £400 per month, get the £100 uplift, and at the end of 10 years have £60000 in the Sipp to draw on for the 7 years between retiring and accessing State Pension and company pension.

Not interested in investing so to speak, just want to know that if I pay in £x in 10 years I will have £y.

Links to any suitable products would be great and any information on charges too.

Thanks.

Useful reading just in case you might want to consider if your 10 year horizon is the most sensible (always your call, obviously): https://www.ii.co.uk/ii-accounts/sipp/holding-cash-in-a-sipp

Otherwise pretty much any SIPP will do the trick - these guides might help: https://www.thetimes.co.uk/money-mentor/article/best-self-invested-personal-pension-sipp/ and https://www.money.co.uk/pensions/sipps?track=885118&gclid=Cj0KCQjwj7CZBhDHARIsAPPWv3dwfJW2qJ0nUIg0a-BzcvBapiKTU8zR0QH7rJRDwLL7wC41wGYvkzQaAhl6EALw_wcB

Dazed_and_C0nfused

Deleted User said:

Hi all,

Currently 50 and looking to retire at 60. Plan is to build a fund to draw on for 7 years income.

I am looking for a product which I can pay into to get the 25% uplift without the stress of watching my balance fluctuate as time goes on. I just want to put in £400 per month, get the £100 uplift, and at the end of 10 years have £60000 in the Sipp to draw on for the 7 years between retiring and accessing State Pension and company pension.

Not interested in investing so to speak, just want to know that if I pay in £x in 10 years I will have £y.

Links to any suitable products would be great and any information on charges too.

Thanks.

Don't forget your £60,000 will be worth less in real terms due to inflation.

[Deleted User]

Dazed_and_C0nfused said:

springy2611 said:

Hi all,

Currently 50 and looking to retire at 60. Plan is to build a fund to draw on for 7 years income.

I am looking for a product which I can pay into to get the 25% uplift without the stress of watching my balance fluctuate as time goes on. I just want to put in £400 per month, get the £100 uplift, and at the end of 10 years have £60000 in the Sipp to draw on for the 7 years between retiring and accessing State Pension and company pension.

Not interested in investing so to speak, just want to know that if I pay in £x in 10 years I will have £y.

Links to any suitable products would be great and any information on charges too.

Thanks.

Don't forget your £60,000 will be worth less in real terms due to inflation.

Yes I know. I just want to know that my account has in it what I think is in it and won't crash the day before I go to access it. I am basically looking for the 25% uplift without the risk associated with it being invested. 

NannaH

Then you can increase contributions in line with inflation to counter this, as long as you aren’t limited to MPAA or £3600, which I unfortunately am - it’s high time the non earner limit was raised to £5k or even £6k. 

[Deleted User]

NannaH said:

Then you can increase contributions in line with inflation to counter this, as long as you aren’t limited to MPAA or £3600, which I unfortunately am - it’s high time the non earner limit was raised to £5k or even £6k. 

I was planning that too. I could use the last couple of years to boost it by as much as I would need over the 7 years, Subject of course to Annual Allowance limits.

Secret2ndAccount

Do your own research. There are many SIPPs out there, almost all would allow what you want to do. However, search for one which doesn't charge to hold cash. Some charge a fixed fee annually; some charge a percentage of your pot every year; but some don't include cash when measuring the size of your pot. So I wonder if you will find one that is free.
Here:
I see AJ Bell doesn't charge to hold cash, and pays 0.2% interest on your cash balance. Can you find one to beat that?

[Deleted User]

Secret2ndAccount said:

Do your own research. There are many SIPPs out there, almost all would allow what you want to do. However, search for one which doesn't charge to hold cash. Some charge a fixed fee annually; some charge a percentage of your pot every year; but some don't include cash when measuring the size of your pot. So I wonder if you will find one that is free.
Here:
I see AJ Bell doesn't charge to hold cash, and pays 0.2% interest on your cash balance. Can you find one to beat that?

I've seen Hargreaves Lansdowne mentioned elsewhere, will have a look. Thanks.

dunstonh

I am looking for a product which I can pay into to get the 25% uplift without the stress of watching my balance fluctuate as time goes on. I just want to put in £400 per month, get the £100 uplift, and at the end of 10 years have £60000 in the Sipp to draw on for the 7 years between retiring and accessing State Pension and company pension.

Using cash for a 10 year period (or at least the first 5 years worth) is risky.  Indeed, potentially riskier than than taking a sensible spread of assets.

You seem to be nervous about investment risk but are increasing shortfall and inflation risk to a level that is likely greater than sensible investment risk.   Increasing your risk to reduce risk is not a good idea.

Yes I know. I just want to know that my account has in it what I think is in it and won't crash the day before I go to access it. 

Why would it do that?    You would de risk as you get closer to the withdrawal point.  Some of this money is going to be there for 17 years.  (10 years building up and then drawn over 7 years).  You just prepare the cash float as you get closer to the time of withdrawal covering x number of years of income.

[Deleted User]

dunstonh said:

I am looking for a product which I can pay into to get the 25% uplift without the stress of watching my balance fluctuate as time goes on. I just want to put in £400 per month, get the £100 uplift, and at the end of 10 years have £60000 in the Sipp to draw on for the 7 years between retiring and accessing State Pension and company pension.

Using cash for a 10 year period (or at least the first 5 years worth) is risky.  Indeed, potentially riskier than than taking a sensible spread of assets.

You seem to be nervous about investment risk but are increasing shortfall and inflation risk to a level that is likely greater than sensible investment risk.   Increasing your risk to reduce risk is not a good idea.

Yes I know. I just want to know that my account has in it what I think is in it and won't crash the day before I go to access it. 

Why would it do that?    You would de risk as you get closer to the withdrawal point.  Some of this money is going to be there for 17 years.  (10 years building up and then drawn over 7 years).  You just prepare the cash float as you get closer to the time of withdrawal covering x number of years of income.

So I think I need to stop worrying about what can go wrong and focus more on the fact that historically my investment will go up and not down. Best to just automate my contribution and stop checking and let the pension do what it does.

Thanks.

dunstonh

Deleted User said:

dunstonh said:

I am looking for a product which I can pay into to get the 25% uplift without the stress of watching my balance fluctuate as time goes on. I just want to put in £400 per month, get the £100 uplift, and at the end of 10 years have £60000 in the Sipp to draw on for the 7 years between retiring and accessing State Pension and company pension.

Using cash for a 10 year period (or at least the first 5 years worth) is risky.  Indeed, potentially riskier than than taking a sensible spread of assets.

You seem to be nervous about investment risk but are increasing shortfall and inflation risk to a level that is likely greater than sensible investment risk.   Increasing your risk to reduce risk is not a good idea.

Yes I know. I just want to know that my account has in it what I think is in it and won't crash the day before I go to access it. 

Why would it do that?    You would de risk as you get closer to the withdrawal point.  Some of this money is going to be there for 17 years.  (10 years building up and then drawn over 7 years).  You just prepare the cash float as you get closer to the time of withdrawal covering x number of years of income.

So I think I need to stop worrying about what can go wrong and focus more on the fact that historically my investment will go up and not down. Best to just automate my contribution and stop checking and let the pension do what it does.

Thanks.

Go with a sensible risk level on the investments and load a diary note for around 5 years time.  At that point, reduce the risk on the contributions and start building a cash float in the pension instead (e.g. x% into cash and y% into investments).  Then when you retire, draw on the cash float first.  That will leave the investments for another 3 or so years.  Then periodically sell some investments to refloat the cash.  

That way you are not one way or the other and you are making sure that the money that is going to be there the longest is invested and the money that is going to be there the shortest is in cash.  Best of both worlds.