10 Year Goal Putting Away £1000 Per Month

Martico

rob3770 said:

Emmia said:

AlanP_2 said:

Emmia said:

rob3770 said:

AlanP_2 said:

rob3770 said:

MX5huggy said:

rob3770 said:

Where would be the best place to put £1000 per month for 10 years, a stocks and shares ISA?

Without any further information £1000 per month for 10 years would be better in a pension by probably 6.25% than an ISA. You can hold the same investments in a pension or ISA. 

That is an idea. Place the £1000 per month in my pension and in 10 years use my entitlement to draw 25% tax free

So broadly what I suggested in Post 4 on Page 1 and you seemed to discount at that time 

Would the 25% TFLS be enough for the planned property purchase?

In your response to me on Page 1 you said only one of you had a pension. That is likely to be tax inefficient in the future if your OH is not going to be able to utilise her full personal allowance. Adding some to a pension in her name would be worth consideration.

If they have no earnings they are limited to a £2880 net contribution each tax year which HMRC will top up to £3600.

I'm just looking for somewhere to place £1000 per month for 10 years and at the end of that period draw it out, sell our 25% stake in our current property and downsize to buy a smaller place outright.
I'm concerned that this is getting to complicated for us to understand and comprehend.
I don't want the hassle of checking funds\stocks\shares but just a place to put the money and maybe making a bit on top.
Sorry for any confusion.

Personally I'd put some (50%) in a pension and some in a robot S&S ISA like that offered by Moneybox and other providers - just pick your risk level,  pay the money in and leave it (don't obsessively check)

But the OP wants to withdraw the lot after 10 years to fund the new house purchase which is likely to create a significant income tax bill (on the pension part) unless the withdrawals are carefully managed at that time.

Going with your 50/50 proposal then after 10 years the pension (without any growth even inflation) would be £75,000 including 20% basic rate tax relief. Taking that as 25% tax free and 75% taxable would mean at least some of it would attract 40% income tax (particularly if the OP has other earned income).

What could work is adding this additional £75k to the existing £200k pension fund (either in the same place or at least logically). 

Just rounding up slightly that would give an overall pension pot of £280k and just taking the 25% tax free would be £70k with no income tax due, leaving the balance to fund retirement.

This assumes that you have enough earned income at the moment OP to cover an additional £625 p/m of pension contributions.

Personally I would also try and get some in my OHs pension if at all possible both from an "income in retirement" point of view and the fact that they MAY be able to withdraw more than the 25% tax free lump sum if they are not fully using their own personal allowance at that point in time.

Choosing investments need not be complicated.

Personally I'd just dump the whole lot in a robo S&S ISA (and in fact this is what I'm actually doing, as I've got the pension sorted). But the OP has referenced that they might not be in such a position - splitting the money might offer benefits for them pension wise. 

A robo S&S ISA sounds the way to go. Where can i search for the pros and cons of the best ones please?

Here's the MSE starter guide

Emmia

rob3770 said:

Emmia said:

AlanP_2 said:

Emmia said:

rob3770 said:

AlanP_2 said:

rob3770 said:

MX5huggy said:

rob3770 said:

Where would be the best place to put £1000 per month for 10 years, a stocks and shares ISA?

Without any further information £1000 per month for 10 years would be better in a pension by probably 6.25% than an ISA. You can hold the same investments in a pension or ISA. 

That is an idea. Place the £1000 per month in my pension and in 10 years use my entitlement to draw 25% tax free

So broadly what I suggested in Post 4 on Page 1 and you seemed to discount at that time 

Would the 25% TFLS be enough for the planned property purchase?

In your response to me on Page 1 you said only one of you had a pension. That is likely to be tax inefficient in the future if your OH is not going to be able to utilise her full personal allowance. Adding some to a pension in her name would be worth consideration.

If they have no earnings they are limited to a £2880 net contribution each tax year which HMRC will top up to £3600.

I'm just looking for somewhere to place £1000 per month for 10 years and at the end of that period draw it out, sell our 25% stake in our current property and downsize to buy a smaller place outright.
I'm concerned that this is getting to complicated for us to understand and comprehend.
I don't want the hassle of checking funds\stocks\shares but just a place to put the money and maybe making a bit on top.
Sorry for any confusion.

Personally I'd put some (50%) in a pension and some in a robot S&S ISA like that offered by Moneybox and other providers - just pick your risk level,  pay the money in and leave it (don't obsessively check)

But the OP wants to withdraw the lot after 10 years to fund the new house purchase which is likely to create a significant income tax bill (on the pension part) unless the withdrawals are carefully managed at that time.

Going with your 50/50 proposal then after 10 years the pension (without any growth even inflation) would be £75,000 including 20% basic rate tax relief. Taking that as 25% tax free and 75% taxable would mean at least some of it would attract 40% income tax (particularly if the OP has other earned income).

What could work is adding this additional £75k to the existing £200k pension fund (either in the same place or at least logically). 

Just rounding up slightly that would give an overall pension pot of £280k and just taking the 25% tax free would be £70k with no income tax due, leaving the balance to fund retirement.

This assumes that you have enough earned income at the moment OP to cover an additional £625 p/m of pension contributions.

Personally I would also try and get some in my OHs pension if at all possible both from an "income in retirement" point of view and the fact that they MAY be able to withdraw more than the 25% tax free lump sum if they are not fully using their own personal allowance at that point in time.

Choosing investments need not be complicated.

Personally I'd just dump the whole lot in a robo S&S ISA (and in fact this is what I'm actually doing, as I've got the pension sorted). But the OP has referenced that they might not be in such a position - splitting the money might offer benefits for them pension wise. 

A robo S&S ISA sounds the way to go. Where can i search for the pros and cons of the best ones please?

Robo S&S ISAs are a pick your risk level and just pay in. I use moneybox which allows lumps of deposit and also regular savings - I have a medium risk S&S ISA.

I have no experience with other robo options so I can't advise - and as the ads say, past performance is not an indication of future performance.