Highest Return/Lowest Risk Pension Options

Albermarle

Just to partly repeat a couple of points already made.

I am also thinking of using a pension wrapper to buy a small commercial property, at some point,

Normally on this forum when we talk about using a pension provider, we mean one that offers a range of investment funds of various types. Some have a small range and some have a big range. However they are pretty easy to operate with, most things can be done on line, they are cheap,  and normally everything runs smoothly ( of course the investment values can go up and down) 
As soon as you start talking about bringing commercial property into a pension, it gets more complicated and you need a more specialised and expensive provider. So think carefully before doing this.

my problem with DC pensions stems from my husband having paid into a company one for around 30 years and his pot being around £50,000.00 and it seems to have dropped a lot recently. 

Probably during the last decade it went up a lot more than it has gone down recently. It is probably worth noting that a £50K pot is relatively small beer in pension terms, and will not buy any decent kind of income. Typically people greatly underestimate what they need to fund a decent retirement, whether that is just a pension alone, or a mixture of pension/savings/property. For example your £400 a month of DB pension, would cost around £125K to buy as an annuity in your fifties.

scrooge2008

Thanks everyone, you have given me loads to think about and I will proceed with care ...... I would never have thought that it would cost £125k to buy a £400.00 a month annuity.  

Albermarle

scrooge2008 said:

Thanks everyone, you have given me loads to think about and I will proceed with care ...... I would never have thought that it would cost £125k to buy a £400.00 a month annuity.  

A couple of years ago it would have cost nearly double that. Also you are taking income at quite an early age, so it might be paying out for another 40 years.
However the approx figure is based on an annuity with some kind of inflation linking and 50% for spouse on death.
If you have an annuity with no inflation increases, and/or no spouse payments, it would be significantly cheaper.

scrooge2008

Thanks Albermarle,  my £400.00 are both linked to inflation and give spouse payments on death - I never realised they were quite valuable.

I have just spoken to my accountant.  He was unwilling to advise on pensions and is giving me the number of a financial advisor that many of their clients use, who I will book an appointment with.  

My accounts year ended 31st July 2022 and he is finalising the accounts now.  He is advising that the profit will be around £30,000.00 and corporation tax will be around £5,000.00.   I asked whether the £30,000.00 could be put into a pension scheme and he seemed to think it would have needed to be put in before the 31st July 2022 and it is too late now, but he is checking with a senior colleague.  I will defnitely be more pro-active this year, once I have read up on everything and got the best advise.

He also advised that my PAYE salary would be going up to £1047.50 this month, from £850.00, as discussed in the thread earlier.

Albermarle

I have just spoken to my accountant.  He was unwilling to advise on pensions and is giving me the number of a financial advisor that many of their clients use, who I will book an appointment with

Your accountant quite rightly is unwilling to advise on investing/pension matters, many accountants are not very well informed in this area. 

You should be a little bit wary though of any financial advisor recommended. Firstly they should be an Independent financial advisor. Secondly you will need to weigh up the potential cost involved. It might be more worthwhile if you are needing financial advice in other areas, such as family matters, inheritance etc 

In itself investing via a pension is not rocket science and you may wish to consider handling it yourself, with a bit of research (  this forum can be useful) 

Dazed_and_C0nfused

I have just spoken to my accountant. He was unwilling to advise on pensions and is giving me the number of a financial advisor that many of their clients use, who I will book an appointment with.  

Be very wary.  You really want an IFA, not a salesman

scrooge2008

Yes - to be honest, I have found reading the pension threads very interesting and informative.  Is it appropriate, in this forum, to read up around everything that has been mentioned over the next few weeks and then post a plan on this thread, for feedback?

Albermarle

scrooge2008 said:

Yes - to be honest, I have found reading the pension threads very interesting and informative.  Is it appropriate, in this forum, to read up around everything that has been mentioned over the next few weeks and then post a plan on this thread, for feedback?

If there is a gap of a few weeks better just to start a new thread.

scrooge2008

Spoke to SMART pension lady, which I have been enrolled in, for many years, but have contributed nothing.  There is a do-it-yourself investment option which has cash funds and gilt funds in it.  She said that the pension was not suitable for payments directly from LTD company but was linked to PAYE and the tax relief was not paid into the pension account because the relief was at source.  When I said that I did not pay tax through PAYE, she indicated that the pension was probably not the best option for me, but would not advise on what was or what pension took payments directly from a limited company bank account.

So, first of all, I would like to find out how I can pay in £8000.00 of wages and get £10,000.00 back into a pension fund.  I am sure I have read it on these threads, but can't find the link.

Secondly I would like to know what Sipp wrappers accept payments from Limited Company Bank Account.

I do actually pay tax through self assessment too as my pensions are added to my income and some other bibs and bobs that are not accounted for through business, so it is not only corporation tax that I pay. 

Thanks for help - on a mission here

Dazed_and_C0nfused

She said that the pension was not suitable for payments directly from LTD company but was linked to PAYE and the tax relief was not paid into the pension account because the relief was at source. 

That means it isn't relief at source.

Relief at source is where you pay a net contribution into a personal pension or SIPP and the pension provider adds 25% to what you paid.  So £8,000 would become a gross contribution of £10,000 (20% of £10,000 being the £2,000 basic rate relief that is added).