Pension and retirement planning

Redscope77

Hi everyone,

About two years ago I posted my situation and got some incredibly helpful and insightful advice that really helped me focus and improve my financial position – so a big thank you to those who contributed!

I thought I’d post an update with my new numbers and see if the collective wisdom has any fresh perspectives or tips for the next phase.

The Goal: Retire as early as possible, ideally by 57. I'm 49 in June.

Monthly Expenses: Mortgage-free. My comfortable lifestyle costs £1,800/month all-in (food, bills, car, entertainment).

The Portfolio:

• ISA: £116k in a 60/40 fund. It's been performing well, with a consistent ~7% growth rate.

• General Investment Account (GIA): £61k in the same fund. My plan is to bed-and-ISA £10k/year into my ISA for tax efficiency.

• Private Pension (PensionBee - Tracker): £220k. I contribute £20k net (£25k gross) annually and claim the higher-rate tax relief back from HMRC.

• Ex Employer Defined Benefit Pension: £153k (RPI-linked). This is ring-fenced, and I can start drawing from it at 55.

• Current Workplace Pension: £3.1k. Not huge, but £6k/year goes in via salary sacrifice and employer contributions.

• Cash Savings: £51k total.

  • £25k is going into Premium Bonds this month. I know the expected return is lower (~4.1%), but as a higher-rate taxpayer with a £500 interest allowance, it seems like a tax-efficient, fun, and accessible emergency fund.

  • £26k is currently sitting with ATOM bank earning ~4%. This is my main question – what would you do with this chunk?

Monthly Savings (from salary): £2,900 / £34,800 per year
This is allocated as:

1. £20k to PensionBee pension

2. £10k to my ISA (which, with the £10k from the GIA, maxes out the £20k allowance)

3. £4,800 for holidays/fun money

The Plan: I'm aiming for a post-tax retirement income of at least £36k per year by 57. It feels within reach, but I know there's always something to learn.

My Questions for You:

1. Given everything above, what would you do with the £26k in ATOM? Keep it as cash, invest it, or something else?

2. Is there anything in my overall strategy you would do differently? Any tips, tricks, or potential pitfalls I'm missing?

I really appreciate any thoughts you have

Isthisforreal99

The DB pension you state as £153k and 'can start drawing from it at 55'. If it's a DB you don't have a pot to draw from - you may be able to access it at 55 but it will be a pension of £x per annum with maybe a tax free lump sum.

You need to clarify what you will actually get.

And the return rate on Premium Bonds is now 3.6%

Redscope77

apologies according to the forecasting tool at 57year old,  I could expect to have an annual sum of circa 8k. 
I have not factored in any tax free drawdowns yet

thanks for the update on the premium bonds.  AI suggest I could get 4.1%, but it's probably wiser for me to use 3.6% as you suggested

wolvoman

The Premium Bond estimates are too high. You’ll be lucky to get 2.5%.

And what’s your plan if you keel over a day after retiring at 55?

Redscope77

wolvoman said:

The Premium Bond estimates are too high. You’ll be lucky to get 2.5%.

And what’s your plan if you keel over a day after retiring at 55?

Hoping I make it past 55 buddy. 

DRS1

Is there a reason you like the PensionBee pension more than the current workplace pension?  Are they invested in the same sort of investments?  Or is the workplace scheme limited as to its investments?

Does the salary sacrifice give you the benefit of any employer NIC savings?  Would there be any advantage to you if the salary sacrifice was increased (and maybe the PensionBee contributions reduced)?

Redscope77

I tend to move around jobs quite a bit and I usually work for myself via umbrella companies.  I've only recently moved into a role where I am employed as a permanent member of staff.
I like the flexibility Pension Bee gives me.  By contributing 20k net, 25k Gross and then claiming the tax relief back from HMRC I have managed to adjust my tax code up to 2288.  


Also my employer doesn't do matched contributions, so I am getting the full "free" cash from them. The WBP plan is also fix so I can't swap it to other funds sadly.  

I take onboard what you said about the NIC savings and will investigate if I want to adjust my current plan 

jimjames

Redscope77 said:

Hi everyone,

About two years ago I posted my situation and got some incredibly helpful and insightful advice that really helped me focus and improve my financial position – so a big thank you to those who contributed!

I thought I’d post an update with my new numbers and see if the collective wisdom has any fresh perspectives or tips for the next phase.

The Goal: Retire as early as possible, ideally by 57. I'm 49 in June.

Monthly Expenses: Mortgage-free. My comfortable lifestyle costs £1,800/month all-in (food, bills, car, entertainment).

The Portfolio:

• ISA: £116k in a 60/40 fund. It's been performing well, with a consistent ~7% growth rate.

• General Investment Account (GIA): £61k in the same fund. My plan is to bed-and-ISA £10k/year into my ISA for tax efficiency.

1. Is there anything in my overall strategy you would do differently? Any tips, tricks, or potential pitfalls I'm missing?

I really appreciate any thoughts you have

I would definitely not be putting money into a cash ISA when you have money in a GIA. My priority would be to get everything into an ISA asap so at the rate of £20k pa not £10k which would be far more tax efficient.

Cobbler_tone

DRS1 said:

Does the salary sacrifice give you the benefit of any employer NIC savings?  

I always wonder the terminology on this. Our brochure says you get them (company NI savings) but is clearly wrapped in the company contribution. i.e. you get double match to 12% max. Eg you put 6% they put 12%, you put 50% they put 12%. You can’t get the full saving.

Redscope77

jimjames said:

Redscope77 said:

Hi everyone,

About two years ago I posted my situation and got some incredibly helpful and insightful advice that really helped me focus and improve my financial position – so a big thank you to those who contributed!

I thought I’d post an update with my new numbers and see if the collective wisdom has any fresh perspectives or tips for the next phase.

The Goal: Retire as early as possible, ideally by 57. I'm 49 in June.

Monthly Expenses: Mortgage-free. My comfortable lifestyle costs £1,800/month all-in (food, bills, car, entertainment).

The Portfolio:

• ISA: £116k in a 60/40 fund. It's been performing well, with a consistent ~7% growth rate.

• General Investment Account (GIA): £61k in the same fund. My plan is to bed-and-ISA £10k/year into my ISA for tax efficiency.

1. Is there anything in my overall strategy you would do differently? Any tips, tricks, or potential pitfalls I'm missing?

I really appreciate any thoughts you have

I would definitely not be putting money into a cash ISA when you have money in a GIA. My priority would be to get everything into an ISA asap so at the rate of £20k pa not £10k which would be far more tax efficient.

Ah - its a stocks and shares isa.  The fund is with vangaurd.

MallyGirl

I didn't get the ER NI savings but OH does and it is separate from the cap on matching