£150K to invest long term

Albermarle

I have just booked an appointment with a pensions advisor via MSE

I was not aware you could do this ?? Do you mean with PensionWise ?

and am querying whether I should just use an iFA who will charge me (I think quite alot) to manage this for me. Is it possible that I will recoup these costs in savings she will make for me?

A question asked time and time again on this forum, but with no black and white answer.

An IFA can not somehow supercharge your investments. What they can do is make sure you are invested appropriately for your personal situation and tolerance to risk ( going for high growth brings the potential for bigger losses, in the short to medium term at least). They will stop you making a dogs breakfast of it.

On the other side the costs will drag on your funds.

The alternative is to spend some time researching the subject and become more knowledgeable. Reading this forum can help with that. It helps if you are reasonably numerate and happy with doing everything online. 

polyp

Albermarle said:

I have just booked an appointment with a pensions advisor via MSE

I was not aware you could do this ?? Do you mean with PensionWise ?

and am querying whether I should just use an iFA who will charge me (I think quite alot) to manage this for me. Is it possible that I will recoup these costs in savings she will make for me?

A question asked time and time again on this forum, but with no black and white answer.

An IFA can not somehow supercharge your investments. What they can do is make sure you are invested appropriately for your personal situation and tolerance to risk ( going for high growth brings the potential for bigger losses, in the short to medium term at least). They will stop you making a dogs breakfast of it.

On the other side the costs will drag on your funds.

The alternative is to spend some time researching the subject and become more knowledgeable. Reading this forum can help with that. It helps if you are reasonably numerate and happy with doing everything online. 

Hi there
Yes, pensionwise. Apparently the Govt are backing the scheme because of the extended deadline for topping up NI contributions I managed to get a one hour phone appointment for may 23rd this morning, so they are busy but not too bad. And it is free, which is ace.
Yes, I clearly have much to learn. I have never looked at this forum before because I have never had any money before! it is a lovely position to be in and I will do some work over the next few weeks. Thank you.

eskbanker

polyp said:
I have just booked an appointment with a pensions advisor via MSE and that will be mid may when they can review all my pension stuff as I honestly don't have a clue what I am looking at (as with most of the general public!). So hopefully they will be able to advise on that?

polyp said:
Yes, pensionwise.

They're not advisors, in that they simply explain generic aspects of pension planning, rather than reviews of your personal situation with specific recommendations.

We’ll explain the options to take money from your pension pots. [not literally your pension pots, just the different methods generically]

At your Pension Wise appointment our pensions specialists will explain how each option works and the other things you need to think about. They’ll also explain how each option is taxed and provide information about how to look out for scams.

This will help you make an informed decision about taking money from your pension pots.

Albermarle

Yes, pensionwise. Apparently the Govt are backing the scheme because of the extended deadline for topping up NI contributions

It has always been backed by the government and is mainly focused on the options for taking pensions other than the state pension, although I guess they can give guidance on this as well.

The overall government Moneyhelper site may be of interest, especially the pensions section. 

Pensions and retirement | Help with pensions and retirement | MoneyHelper

dunstonh

I have just booked an appointment with a pensions advisor via MSE and that will be mid may when they can review all my pension stuff as I honestly don't have a clue what I am looking at (as with most of the general public!). So hopefully they will be able to advise on that?

Pensionwise do not review what you have or will not tell you what is suitable or best for you. They will provide generic information on some of the main options but not all of them.        Pensionwise do not provide advice.

Pensionwise can be helpful in simple cases but they will tell you to use an IFA if you are looking for advice.

polyp

Thanks guys. That is good to know. I won't wait a month for no help then (although I do want so me info on my NI contributions and whether I should top them up so I will keep the appointment and see if they can help with that.

bostonerimus

Do a budget so you know exactly what you'll need to live on.
After you have paid off all high interest debts and put maybe a year's spending in the bank for emergencies and cash flow you have two options for income, invest or buy an annuity. 

If you invest do it inside a tax advantaged account like a pension or ISA and stick to inexpensive tracker funds. You might also consider a "ladder" of savings accounts with terms from 1 to 5 years (or longer) as interest rates are quite high now. Do not do any planning based on a 7% return as while that is possible you might not get that, so be more pessimistic and see what maybe 2% does to your plan.

If you buy an annuity make sure you understand the implications of inflation, but it will last your lifetime and hopefully that will be a long time.

eskbanker

polyp said:

I do want so me info on my NI contributions and whether I should top them up...

If you get hold of your state pension forecast and NI record, via the link posted earlier, and share the relevant details on here (in particular the forecast based on contributions up to 2022, as well as maximum available if continuing to contribute, plus info about any missing NI years), then posters will be able to offer guidance - it's not as complex as it may seem, at least for those who know their way around the calculation!

Albermarle

polyp said:

Thanks guys. That is good to know. I won't wait a month for no help then (although I do want so me info on my NI contributions and whether I should top them up so I will keep the appointment and see if they can help with that.

Pensionwise can be a useful part of a learning curve about pension options. They will just not advise you directly on what you personally should do. That sort of personalised advice is never free and in any case one hour would be nowhere near long enough. I would still go ahead ( that would be my advice  )

As well as taking the 'advice' of  @eskbanker about posting up your NI figures etc , you could also have a look at the actual pensions forum. There have been numerous questions about NI contributions/state pension on there in recent weeks . So probably worth spending some time reading through some of the answers.
Pensions, annuities & retirement planning — MoneySavingExpert Forum

OldScientist

polyp said:

Cool!! Thank you for responding.
I have a low income (maybe £6k a year). I do airbnb and take in foreign students to supplement my income but would love to stop this!
I am 55 in June. Believe my NI contributions are all maximised, and also have a private pension pot of around 40k.
I own my home (worth £500K) and a beach hut (worth £35k). Single, no dependents.
I just received £250K and after paying off my mortgage, doing house repairs etc...I will have £150K to invest.
What i really want is to factor in living 30 years and trying to make this 150K and my existing property help me give up the students in my house and give me an income (ideally 20kpa but that might be total wishful thinking...).
Because I have no dependents, apart from leaving a bit of cash to nephews and nieces and some to charity, I can eat into this although i would like to keep hold of my house as long as possible.
There you go!!!
Currently it is all sitting in savings accounts earning between 3-3.5% interest (in pots of up to 85K.
 

Just a couple of points.

1) At 55yo, you have (roughly) a 50% chance of living for another 30 years, and a 10% chance of living another 40 or so years (see life expectancy calculator at  https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthandlifeexpectancies/articles/lifeexpectancycalculator/2019-06-07 )

2) You could divide the retirement into two parts

a) Before state pension: You have 12 years until state pension, assuming you can park your money to provide a 0% real (you can, but for the moment let's not get bogged down in details) then over that 12 years, each £1k of inflation adjusted income will cost you £12k. Assuming you will continue with whatever activity brings in the £6k per year (is that in addition to airbnb and students?), adding another £10k of income (roughly the same as the state pension) for a total of £16k per year will cost you about £120k of your current nest egg (leaving about £30k+40k pension).

b) Post state pension: At 67, you'll probably need to plan for a lifetime of another 30 years or so. Investing in stocks and bonds in the UK has historically allowed an inflation adjusted withdrawal of between 3% and 3.5% of whatever funds you have invested at retirement. Assuming, you can downsize and get about £250k from your house and still have the £70k left over, you would have £320k which would allow an income of just under £10k per year in addition to the state pension of £10k.

This is all back of the envelope stuff and depends on a number of assumptions (not all of which are certainties).