Retirement nest egg building

loullew

If you had 5 years until retirement, with no personal pension but £5000 -£10000 to invest, what would you do? Pension or other?

Baron_Dale

To receive helpful suggestions and comments you really need to give more information. For example are you a homeowner, do you have other savings, have you a partner/ spouse with a pension? Is this the only money you have to put into a pension? Are you earning a salary at the moment? Do you have any debt? Have you checked your national insurance record and on course for a full state pension? 

Sorry about all the questions, but they will enable others to be helpful with your situation.

Floss

loullew said:

If you had 5 years until retirement, with no personal pension but £5000 -£10000 to invest, what would you do? Pension or other?

Depends on how risk averse you are, what your housing situation is, whether you are single or will have a partners income, if you have a pension from employment....

Baron_Dale

If, for example, that £10000 is all you have, it may be an idea to put some into an emergency fund before you do anything else.

Albermarle

loullew said:

If you had 5 years until retirement, with no personal pension but £5000 -£10000 to invest, what would you do? Pension or other?

You might be better with this forum. In any case worth a look through it for ideas.
Savings & investments — MoneySavingExpert Forum
People often ask similar questions and the answer is always the same - you need to supply more detail to get a sensible answer.
For example to add £10K to a pension you need to be earning/in employment, but we have no idea if you are, or not.

loullew

Thank you all for your comments. A little more detail: I have fully pain up my National Insurance but not due my state pension for another 11 years; I own my home (last mortgage payment in Feb this year); I am self-employed and earn about £1200 monthly; am married and husband due his pension in 6 years; no other debt; have emergency savings too. Medium interest at the most I think but would like to look at how best to increase £5,000- £10,000 within 10 years so I may retire earlier! Look forward to your input if that is enough info.

Baron_Dale

Thank you for the update. When you say your husband is due his pension in 6 years do you mean his state pension or a works pension? What will his total pension income be?

You both need to discuss and decide how much you need to live on in retirement. Having your own home that is paid for is a big plus. Are you able to put any of your income into a personal pension or ISA each month? Could you the money you have ‘ spare’ to start a personal pension? Having emergency savings in place is also a plus. 

Best wishes.

Organgrinder

Yes sound advice.

To add a little more I think there are three phases leading up to and including retirement.

1.Income and needs whilst in work
2.Income and needs between actual retirement and State Pension Age
3.Income and needs from State Pension Age onwards,

Many people plan for retirement thinking that an annuity or pension income has to last them the rest of their life and is their only source of income in addition to the State Pension. For some this may indeed be the case but I'll try and explain via an example.

Assume person A is 57 has an income of £20,000 a year and has built up a pension of £6,000 with a projected pension of £,8000 at 67. They want a retirement income of £15,000. At age 67 their needs  will be met as they have the state pension £11,500 plus their own pension. In fact they have an excess.

Let's assume they want to retire early and at age 64 have a projected pension of £7000. This would still be enough at 67 due to the state pension, but they need to cover the shortfall between their needs (£15,000) and their income (£7,000). So they have a 3 year requirement of £8,000 pa or £24,000. Provided they can find this in the 7 years to 64 they could in theory retire early and get the income they want from 64 to 67 and from statepension age onwards. The money they need could come from an ISA, from savings/investments or from a pension plan they draw down on. But it's only needed for 3 years to fund the gap from 64 to 67.

I would suggest you look first at your needs at SPA and work backwards to create a plan that would allow you to retire early and provide you with the income you need in phases 2 and 3 above.