cash alternatives / retirement

pauline115

@Stargunner starting to scale back, fully retire 55-60. i have a source of passive income around 10k per year  so i suppose 15-20k per year would be ideal

pauline115

i went to unbiased for a reccomendation  of an IFA - they sent me a place called the private office but reviews are pretty poor, ill see if any more turn up

Archerychick

Check out “vouched for” as another site that you can location an IFA

Stargunner

pauline115 said:

@Stargunner starting to scale back, fully retire 55-60. i have a source of passive income around 10k per year  so i suppose 15-20k per year would be ideal

Your excess of £500k in cash savings will be generating over £20k a year in interest, so although you currently have no pension you are in a very good position. You also have £200k in your business and when you reach state retirement age you will get your state pension.
Every year that you continue to work will allow you to grow your pot more and it would  be a good idea to start to pay in the maximum contributions that you can into a SIPP. 

AlanP_2

pauline115 said:

i went to unbiased for a reccomendation  of an IFA - they sent me a place called the private office but reviews are pretty poor, ill see if any more turn up

From the comments some of the IFAs who post on MSE say don't bother with unbiased and similar. They started off as a good idea with smaller local IFAs having entries on there but over time there charges have increased dramatically and now the local firms can't afford it. In the same way as there is no national directory for local butchers.

They also make the observation that most small, local IFAs do not advertise as they have enough business and aren't pushing for additional customers.

Just google "IFAs in xxx location" and get a list to start looking at. Check their websites and make sure they are IFA and not FA.

Then check the company name on the FCA register and see if there are any records of complaints etc. upheld against them. There may be and some may be "not a problem" in reality but as you will probably need to reduce down to a shortlist why take the chance?

In the meantime open a SIPP and pay a few quid in with any of the low cost platforms e.g. Fidelity, Vanguard, A J Bell etc. Don't worry about what you invest in any multi-asset fund like HSBC Global Strategy Balanced will do for now.

As mentioned in an earlier post you need to be a pension scheme member in the tax year you want to Carry Forward FROM.

So what this will do is allow for an IFA, once a plan is developed, to make use of any applicable Annual Allowance Carry Forward into the 25/26 tax year and beyond if things don't get sorted before the end of this 24/25 tax year. 

MEM62

@Pauline115 The good point is that you have accumulated some wealth.  The negative is that it is not in the best place to serve you well over the coming years (and over the years you have missed out on a considerable gains in terms of investment returns and tax relief)  An IFA will take an overview of your situation and guide you in what steps can be taken to make the most of what you have, which is not an insignificant amount  :-)  I expect that that would involve getting as much of the cash into a pension as you can in the years that you have left working /earning and as much of the remainder in a tax-free wrapper (ISA) as your allowances permit.         

Albermarle

pauline115 said:

@Albermarle should i be concerned about the 'overvalued ' stock market ie wait to investim any % equities given when i am starting

As neither I or anyone else can see into the future, then any answer can only be a guess.

There are some indications that parts of the US stock market ( basically the Big Tech giants, like Apple and Google etc) are a bit frothy.
However I reduced my US holdings some years ago on similar fears and wished I had not.

The key point is that if you invest today and hope to utilise that money in 10,20,30 years time, what happens tomorrow in the markets is not that relevant. 

As said you do not have to be 100% equities, most people have a mix of equities and bonds/gilts/cash.

also what would be considered a reasonable fee so i can make sure  im not overpaying

Typical initial fee would be 1% to 3% ( although the very first meeting is free normally)
Ongoing advice fee 0.5% to 1% pa

Having a higher level of finds should mean the % fees should be at the lower end.

This is separate to the actual cost of investing.

Regarding  competency etc. they are all highly regulated and someone in your position is pretty straightforward bread and butter business for an IFA. Of course you may prefer dealing with one person rather than another, but they will all probably suggest something similar as there is a kind of template on how to do things.

Sam_666

Stargunner said:

pauline115 said:

@Stargunner starting to scale back, fully retire 55-60. i have a source of passive income around 10k per year  so i suppose 15-20k per year would be ideal

Your excess of £500k in cash savings will be generating over £20k a year in interest, so although you currently have no pension you are in a very good position. You also have £200k in your business and when you reach state retirement age you will get your state pension.
Every year that you continue to work will allow you to grow your pot more and it would  be a good idea to start to pay in the maximum contributions that you can into a SIPP. 

I completely disagree with your opinion. Being cash rich only is not good  position to be in long term.
Generating £20k in intrest is waste of time, as inflation eats in most of it.
Wealth  needs to grow from investment, not from "continue to work", as  that is very low floating variable. None knows when you might have to stop work suddenly.

Many good advices in this tread, but some (like this post) forgot that OP is  working for his ltd. He cant just dupm cash in SIPP  from his personal accounts, it will most likely get very few tax credits. Payments in  pension need to come from  ltd in properly setup pension. That was clearly mention in my first advice to OP.
To OP, dont put any  money in SIPP until you first discuss that with good accountant. Suprised your current accountant hasnt already advised you on that subject.

pauline115

@Sam_666 my accountant is terrible. i opened a sipp this week and have put in 30k to start with. as you rightly point out the cash is outside the business, would you reccomend putting this into a fund?

i do have 10k coming in per year  and the cash in my business could pay my 1250 salary for 10 years, along with the interest from my savings i think i could be ok but at the same time know that i need to make more of the cash ive saved, would you have any reccomendations? ive also thought about buying a property, as it would be mortgage free would be a good source of regular income if i had to stop working

Albermarle

Sam_666 said:

Stargunner said:

pauline115 said:

@Stargunner starting to scale back, fully retire 55-60. i have a source of passive income around 10k per year  so i suppose 15-20k per year would be ideal

Your excess of £500k in cash savings will be generating over £20k a year in interest, so although you currently have no pension you are in a very good position. You also have £200k in your business and when you reach state retirement age you will get your state pension.
Every year that you continue to work will allow you to grow your pot more and it would  be a good idea to start to pay in the maximum contributions that you can into a SIPP. 

I completely disagree with your opinion. Being cash rich only is not good  position to be in long term.
Generating £20k in intrest is waste of time, as inflation eats in most of it.
Wealth  needs to grow from investment, not from "continue to work", as  that is very low floating variable. None knows when you might have to stop work suddenly.

Many good advices in this tread, but some (like this post) forgot that OP is  working for his ltd. He cant just dupm cash in SIPP  from his personal accounts, it will most likely get very few tax credits. Payments in  pension need to come from  ltd in properly setup pension. That was clearly mention in my first advice to OP.
To OP, dont put any  money in SIPP until you first discuss that with good accountant. Suprised your current accountant hasnt already advised you on that subject.

Few points here.
I guess ' Pauline 115' is probably a she not a he ( not that it matters really)

More importantly although there maybe well be better uses for all the cash, some perspective is needed. Your average person would consider someone with in excess of half a Million Pounds in cash available, to be rich beyond their wildest dreams. The OP is in a very good financial position, although seemingly could be optimising her assets better.

The OP should be aware that accountants are not necessarily very good with personal finance. We see many examples of that cropping up in the forum. If you want financial advice then it is better to go to a financial advisor ( or learn about it yourself) .