Best way to invest about 200k

2

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  • ColdIron
    ColdIron Posts: 8,980 Forumite
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    london21 said:
    xylophone said:
    I am a higher rate tax payer and pay into my pension but not a large amount about £400pm 

    But as a higher rate tax payer, pension contributions are very tax efficient - you might do well to consider increasing your pension contributions and using some of the £200,000 as income replacement.

    You have a cash ISA - are your investments held in a stocks and shares ISA?

    It's just the lack of access until near retirement age, I somewhat like flexibility but need to change my mindset.
    This is a strength not a weakness in my view
    57 will roll round quickly enough. Is early retirement in your plans? A healthy pension gives you options
    The importance of a pension becomes clear as you near retirement and many people greatly increase their contributions. I increased mine to £40,000 for 3 years. Great for tax but not so good for growth
    Do you have a spouse or children? Pensions are very tax efficient from an IHT point of view as they do not form part of your estate
    The current 100% tax relief is very generous but may not last forever. Make hay while the sun shines?
    You are looking for a home for money you don't immediately need, it's an excellent home, your older self will thank you
  • london21
    london21 Posts: 2,096 Forumite
    First Anniversary First Post Name Dropper
    ColdIron said:
    london21 said:
    xylophone said:
    I am a higher rate tax payer and pay into my pension but not a large amount about £400pm 

    But as a higher rate tax payer, pension contributions are very tax efficient - you might do well to consider increasing your pension contributions and using some of the £200,000 as income replacement.

    You have a cash ISA - are your investments held in a stocks and shares ISA?

    It's just the lack of access until near retirement age, I somewhat like flexibility but need to change my mindset.
    This is a strength not a weakness in my view
    57 will roll round quickly enough. Is early retirement in your plans? A healthy pension gives you options
    The importance of a pension becomes clear as you near retirement and many people greatly increase their contributions. I increased mine to £40,000 for 3 years. Great for tax but not so good for growth
    Do you have a spouse or children? Pensions are very tax efficient from an IHT point of view as they do not form part of your estate
    The current 100% tax relief is very generous but may not last forever. Make hay while the sun shines?
    You are looking for a home for money you don't immediately need, it's an excellent home, your older self will thank you
    No spouse or children currently. In the future yes.
  • london21 said:
    It is the state pension age that keeps increasing.  you can retire earlier than that on your private pensions, currently age 55.

    The age that you can withdraw from a pension is increasing to 57 and maybe will be 58 at some point.

    However 40% tax relief is very generous and should be taken advantage of whilst it lasts. Which maybe forever but it costs the Treasury many Billions, so....

    currently base is 70k and last bonus was 25k.

    currently put in 420 which equates to 525 and employer puts in 466 monthly.

    Will increase to between 1000-2500 still undecided.
    420 to 525 is only 20% relief? 

    £1,000 - 2,500 should become £1,724 - 4,310 in your pension as you save 40% tax and 2% NI 
    No one has ever become poor by giving
  • london21
    london21 Posts: 2,096 Forumite
    First Anniversary First Post Name Dropper
    london21 said:
    It is the state pension age that keeps increasing.  you can retire earlier than that on your private pensions, currently age 55.

    The age that you can withdraw from a pension is increasing to 57 and maybe will be 58 at some point.

    However 40% tax relief is very generous and should be taken advantage of whilst it lasts. Which maybe forever but it costs the Treasury many Billions, so....

    currently base is 70k and last bonus was 25k.

    currently put in 420 which equates to 525 and employer puts in 466 monthly.

    Will increase to between 1000-2500 still undecided.
    420 to 525 is only 20% relief? 

    £1,000 - 2,500 should become £1,724 - 4,310 in your pension as you save 40% tax and 2% NI 
    Didn't even know there was also NI savings but get benefit twice in that less tax (my tax code changes extra allowance to the personal allowance) 25% gets added to the pension so currently the £420 is £525 in my pension.
  • Albermarle
    Albermarle Posts: 21,914 Forumite
    First Anniversary First Post Name Dropper
    london21 said:
    It is the state pension age that keeps increasing.  you can retire earlier than that on your private pensions, currently age 55.

    The age that you can withdraw from a pension is increasing to 57 and maybe will be 58 at some point.

    However 40% tax relief is very generous and should be taken advantage of whilst it lasts. Which maybe forever but it costs the Treasury many Billions, so....

    currently base is 70k and last bonus was 25k.

    currently put in 420 which equates to 525 and employer puts in 466 monthly.

    Will increase to between 1000-2500 still undecided.
    420 to 525 is only 20% relief? 

    £1,000 - 2,500 should become £1,724 - 4,310 in your pension as you save 40% tax and 2% NI 
    There is only a NI saving if pension contributions are taken via a salary sacrifice scheme. 
    Looking at the OP's last post it would seem his employer has a Relief at Source scheme, so no NI saving.
  • london21 said:
    It is the state pension age that keeps increasing.  you can retire earlier than that on your private pensions, currently age 55.

    The age that you can withdraw from a pension is increasing to 57 and maybe will be 58 at some point.

    However 40% tax relief is very generous and should be taken advantage of whilst it lasts. Which maybe forever but it costs the Treasury many Billions, so....

    currently base is 70k and last bonus was 25k.

    currently put in 420 which equates to 525 and employer puts in 466 monthly.

    Will increase to between 1000-2500 still undecided.
    420 to 525 is only 20% relief? 

    £1,000 - 2,500 should become £1,724 - 4,310 in your pension as you save 40% tax and 2% NI 
    There is only a NI saving if pension contributions are taken via a salary sacrifice scheme. 
    Looking at the OP's last post it would seem his employer has a Relief at Source scheme, so no NI saving.
    My bad, £1,000 - 2,500 should become £1,667 - 4,167 then 
    No one has ever become poor by giving
  • london21
    london21 Posts: 2,096 Forumite
    First Anniversary First Post Name Dropper
    london21 said:
    It is the state pension age that keeps increasing.  you can retire earlier than that on your private pensions, currently age 55.

    The age that you can withdraw from a pension is increasing to 57 and maybe will be 58 at some point.

    However 40% tax relief is very generous and should be taken advantage of whilst it lasts. Which maybe forever but it costs the Treasury many Billions, so....

    currently base is 70k and last bonus was 25k.

    currently put in 420 which equates to 525 and employer puts in 466 monthly.

    Will increase to between 1000-2500 still undecided.
    420 to 525 is only 20% relief? 

    £1,000 - 2,500 should become £1,724 - 4,310 in your pension as you save 40% tax and 2% NI 
    There is only a NI saving if pension contributions are taken via a salary sacrifice scheme. 
    Looking at the OP's last post it would seem his employer has a Relief at Source scheme, so no NI saving.
    My bad, £1,000 - 2,500 should become £1,667 - 4,167 then 
    When i was contributing £420 per month my code changed from the usual personal allowance so was 1572L.

    And when i log into Aviva the £420 is £525.

    I have contacted my HR to increase the contribution to £1500 but my tax code won't change immediately. HMRC said to write in a letter as its a large increase but once January pay contribution is deducted will then contact them. 
  • london21
    london21 Posts: 2,096 Forumite
    First Anniversary First Post Name Dropper
    New ISA allowance soon  :)

    The advice to invest in Vanguard FTSE global all cap index has been working well.

    I have increased my pension contribution to £1500pm

    Still have cash in instant access account paying around 4.84 / 4.9%




  • dunstonh
    dunstonh Posts: 116,237 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    london21 said:
    New ISA allowance soon  :)

    The advice to invest in Vanguard FTSE global all cap index has been working well.

    I have increased my pension contribution to £1500pm

    Still have cash in instant access account paying around 4.84 / 4.9%




    Still be a bit light on the pensions considering you are a higher rate taxpayer.

    Pension beats LISA and ISA.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • london21
    london21 Posts: 2,096 Forumite
    First Anniversary First Post Name Dropper
    dunstonh said:
    london21 said:
    New ISA allowance soon  :)

    The advice to invest in Vanguard FTSE global all cap index has been working well.

    I have increased my pension contribution to £1500pm

    Still have cash in instant access account paying around 4.84 / 4.9%




    Still be a bit light on the pensions considering you are a higher rate taxpayer.

    Pension beats LISA and ISA.
    You are right. I went from contributing £400 to £1500

    Income about £70k base £25k last bonus not sure what I will get next month but feels weird working and not getting much monthly due to pension contribution but guess that is a mindset thing.

    I am currently 34 feels like a long way away from retirement.


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