Do I need to speak to an IFA?

taper

Hi,

I’m having a few little panics about how best to plan for our financial future so thought I’d post here. I regularly read these posts and find them a great source of information.

A bit about me, I’m 51 and about to be made redundant. I have a dc pot in a lifestying fund with Aegon currently worth £475k. I will be adding £80k from my redundancy to that pot. That is £60k for this tax year and utilising unused allowance from the previous couple of years.

With a pot that size is lifestyling the right option? Should I seek the advice of an IFA and invest? The lifestyling is aimed for a person to go into a drawdown pension at retirement.

I am very good at budgeting but no clue about investments. I don’t know if the cost of an IFA is worth it?

Also a tax question, as I will be utilising previous years unused allowance do I need to speak to HMRC or anything? My redundancy is a large sum so although £80k is going into my pension I am still expecting to receive £60k after deductions. If I don’t work again this tax year I assume I will have to do a self assessment as I will probably have overpaid some tax?

One final question is my partner, age 61, has £120k in a pension with SJP. I have read negative reviews on them and wondering if he should consider moving that? He is likely to start drawing on that pension in the next 3/4 years.

many thanks in advance for any help!

Moonwolf

It depends how much work you want to put in,  Everything is doable by yourself.  I was wondering the same when I first visited here and I have learned enough to be happy with my choices from people on here, either asking for direct help or just reading the forum and the links.

The main complaint about SJP is the charges.  They have high charges which is money that could be growing for you.  Over a number of years this can make a huge difference.

JohnWinder

The aspect of an advisor's assistance, 'how best for me to invest?'  is one that can be readily replaced by DIY with some knowledge of personal investing. One of few UK focussed very good books on that subject is Tim Hale's Smarter Investing which is likely in your local library. If you've got the inclination it's all you need, but has nothing on taxation.

Dazed_and_C0nfused

taper said:

Hi,

I’m having a few little panics about how best to plan for our financial future so thought I’d post here. I regularly read these posts and find them a great source of information.

A bit about me, I’m 51 and about to be made redundant. I have a dc pot in a lifestying fund with Aegon currently worth £475k. I will be adding £80k from my redundancy to that pot. That is £60k for this tax year and utilising unused allowance from the previous couple of years.

With a pot that size is lifestyling the right option? Should I seek the advice of an IFA and invest? The lifestyling is aimed for a person to go into a drawdown pension at retirement.

I am very good at budgeting but no clue about investments. I don’t know if the cost of an IFA is worth it?

Also a tax question, as I will be utilising previous years unused allowance do I need to speak to HMRC or anything? My redundancy is a large sum so although £80k is going into my pension I am still expecting to receive £60k after deductions. If I don’t work again this tax year I assume I will have to do a self assessment as I will probably have overpaid some tax?

One final question is my partner, age 61, has £120k in a pension with SJP. I have read negative reviews on them and wondering if he should consider moving that? He is likely to start drawing on that pension in the next 3/4 years.

many thanks in advance for any help!

Do you mean you will receive £140k+ in taxable income and then you will then add £80k (gross) using the relief at source method?

Or will you be sacrificing some of the redundancy info additional employer contributions?

Until you know which method is being used it's hard to say if Self Assessment is relevant.  Quite possibly not.  But taxable income of £150k or more means it could well be.

tacpot12

Are you sure the lifestyling is aimed at drawdown? Most lifestyling schemes I have seen are aimed at buying an annuity at your retirement age and are not suited to drawdown. 

taper

No it’s not relief at source. I will be doing an avc via the payroll so I will only receive the £60k in my bank. Does that make sense?

taper

tacpot12 said:

Are you sure the lifestyling is aimed at drawdown? Most lifestyling schemes I have seen are aimed at buying an annuity at your retirement age and are not suited to drawdown. 

Yes it was changed a couple of years ago so more of the funds stay invested opposed to cash etc

Clive_Woody

tacpot12 said:

Are you sure the lifestyling is aimed at drawdown? Most lifestyling schemes I have seen are aimed at buying an annuity at your retirement age and are not suited to drawdown. 

Many of the lifestyling ones that I've seen in recent years have the option to choose between drawdown or annuity. 

MEM62

taper said:

I have a dc pot in a lifestying fund with Aegon currently worth £475k.

What is your reason for lifestyling?  Is this an appropriate tactic for your retirement planning?  

kempiejon

taper said:

Hi,

I’m having a few little panics about how best to plan for our financial future so thought I’d post here. I regularly read these posts and find them a great source of information.

A bit about me, I’m 51 and about to be made redundant. I have a dc pot in a lifestying fund with Aegon currently worth £475k. I will be adding £80k from my redundancy to that pot. That is £60k for this tax year and utilising unused allowance from the previous couple of years.

DON'T PANIC as the guide said. Take a breath, being made redundant is upsetting I've not long been through a terrible time at work that ended with an acrimonious settlement. Don't take it personally and try and reset and move on.

Well with £0.5+M in a pot and a pay-out of another £60k+ I would take the time to invest in myself and take stock, learn about the tax implications, SIPPS&ISAs, investing basics, budgeting and think about how much longer you want to be in the work place and what you want to do with the later stage of your life. I'd take a few months to do that.

Not knowing your specifics you might have a massive mortgage, commitments and outgoings that mean you've got to get back to work as quick as possible.

I've learnt all about the FIRE movement - financial independence retire early. I've taken control of my own finances and would advise that route over and IFA but I like DIY, cooking from scratch, teaching myself instruments, so prefer to be self reliant.

I wouldn't assume you need to do a tax return, let HMRC work that out. I over paid tax and am expecting it to come back to me automatically but not until last tax year is accounted. You can check this online with an HMRC account.

Here's a few starter questions.
Life-styling is based upon your retirement date when have you set yours with Aegon?
How much are Aegon charging you for your pensions? Where is it invested? Will that change after redundancy?
How's your state pension entitlement looking? (check with HMRC again)
Do you and SO have other pensions from other employers?

St James's Place are expensive and do not necessarily add value. A bit of learning and I'd say you do not need them. Some would not be interested in upskilling and happy to pay (perhaps over pay) for someone to take responsibility for them.

Good luck.

Sarahspangles

I think in your circumstances I would want to use an IFA. It sounds like you are going through a stressful enough time and need to make sound decisions quickly. I expect the cost of advice will pay for itself over time.