Improving pension position and savings

Albermarle

My thinking was purely about avoid paying tax on interest,

You should have a financial plan first, and then work out how to enact it without paying unnecessary tax ( not the other way around) 

I'm including the state pension in the £30k. I've been thinking about this since yesterday and I'd like to consider £30k as the minimum target, as my £25k didn't include holidays beyond Europe.

Always keep in mind that you have to think in todays money. So if you can buy what you want today for £30K pa, then in 20 years time you will maybe need over £50K pa. So real growth on investments/savings/pensions/houses etc is always actual growth minus inflation.

CrunchyNutCornflakes

MallyGirl said:

I would personally think about somewhere other than Nest - 1.8% is a big hit on every contribution. Just because your employer won't increase their payments if you increase yours then that is not necessarily a reason not to boost your current workplace pension. Who is it with and what are the fees?

I have been lucky with premium bonds (around 8% winnings so far) and they are useful when you become a higher rate tax payer which limits your interest exempt to £500. Interest rates can be found elsewhere that are more reliable but someone has to win big and it could be you.

My current workplace pension is with Royal London, and I'd have to dig out the paperwork for the specific, but I believe the annual charge is close to 1%. Any changes to my contributions would need to be arranged through my employer and their financial advisor. The nest fund has also been performing significantly better.

In conclusion it's looking like it's worth doing some research into other private pensions.

It's possible I might just reach the threshold of being a higher rate tax payer next year depending on changes at work, and what the next government does to tax rates. Considering my savings accounts pay annually I'm trying to limit the tax on interest as much possible. Hence putting money into premium bonds, even if some of it is only for a year 

Albermarle

My current workplace pension is with Royal London, and I'd have to dig out the paperwork for the specific, but I believe the annual charge is close to 1%

Normally RL pensions have discounts, so unlikely you will be paying as much as 1 %.

The nest fund has also been performing significantly better.

'Fund ' is the key word. 

The fund you are invested in within the Nest pension, is growing more than the fund you are invested in the RL pension. If you were invested in different funds within either pension, the result would be different ( you have a choice of funds in both - many more in the RL pension than Nest ) 

How the investment funds are performing in each pension, is no reflection on the actual pension providers themselves. 

penners324

I wouldn't bother with Premium Bonds,

I'd put a large chunk of that into the Pension 

CrunchyNutCornflakes

Albermarle said:

Normally RL pensions have discounts, so unlikely you will be paying as much as 1 %.

According to my most recent statement it's 0.67% but I'll dig out the paperwork this weekend.

Albermarle said:

The nest fund has also been performing significantly better.

'Fund ' is the key word. 

The fund you are invested in within the Nest pension, is growing more than the fund you are invested in the RL pension. If you were invested in different funds within either pension, the result would be different ( you have a choice of funds in both - many more in the RL pension than Nest ) 

How the investment funds are performing in each pension, is no reflection on the actual pension providers themselves. 

Oooh I completely missed this. Because it's a company specific fund with a financial advisor I was under the impression that I could change the fund at all. I'll definitely look at other fund options, thank you.

kimwp

CrunchyNutCornflakes said:

Albermarle said:

Normally RL pensions have discounts, so unlikely you will be paying as much as 1 %.

According to my most recent statement it's 0.67% but I'll dig out the paperwork this weekend.

Albermarle said:

The nest fund has also been performing significantly better.

'Fund ' is the key word. 

The fund you are invested in within the Nest pension, is growing more than the fund you are invested in the RL pension. If you were invested in different funds within either pension, the result would be different ( you have a choice of funds in both - many more in the RL pension than Nest ) 

How the investment funds are performing in each pension, is no reflection on the actual pension providers themselves. 

Oooh I completely missed this. Because it's a company specific fund with a financial advisor I was under the impression that I could change the fund at all. I'll definitely look at other fund options, thank you.

NB, My company pension has a default "lifestyle" fund where they change the proportions of my pension in higher risk and lower risk enterprise as I get closer to retirement or a limited number of other funds - I don't get the option of picking any fund I want. It's probably the same for yours.

Somebody

Whether funds are in default lifestyle funds depends very much on the pro-activity of the employer and/or their advisors.

My ex-employer's retains a firm of IFA following selecting RL as their plan provider and the IFA individually met with all staff members to determine their risk appetite and suggested funds, so not default lifestyling.

After resigning RL have kept the discounted charges for my plan the same (0.29% nett IIRC), plus I receive profit share which effectively reduces it.