Where do I start?

Username_Is_Unique

So I've never worried about my retirement savings or pensions - I've been paying into a Civil Service pension for over 20 years and thought that would be all I needed to do. Then I was widowed a couple of years ago and now my financial situation has changed a fair bit.

I've covered off the big things:

Mortgage is paid, no debt other than a car PCP which I intend to keep ticking over.

Civil Service Pension with maxed out additional contributions.

£15k emergency fund and I'm receiving my wife's pension which covers all my essential monthly bills.

Savings wise I have £80k in a cash ISA (26/27 allowance untouched), £50k in Premium Bonds, and £250k in a NS&I Bond which matures in July. My savings are growing at c.£2.5k per month.

So I'm not sure what to do when the bond matures this, alongside my CS pension, is my retirement fund - I'm aiming to retire in 13 years. Do I look to pay into an additional pension? Do I look for other investments - S&S ISA? Should I just go to an IFA and say "here's my money, please sort it out for me"?

Any advice gratefully received.

dunstonh

Civil Service Pension with maxed out additional contributions.

Well done on putting £60,000 a year or 100% of your salary, whichever is lower, into the pension.

Savings wise I have £80k in a cash ISA (26/27 allowance untouched), £50k in Premium Bonds, and £250k in a NS&I Bond which matures in July. My savings are growing at c.£2.5k per month.

That paints a very typical civil service scenario. That's not a dig, but you generally find those in the civil service seem to lack investments.

Do I look to pay into an additional pension?

You said you maxed out additional contributions. If you have generally maxed out, then you can't put any more into the pension and get tax relief.

Do I look for other investments - S&S ISA? 

That you may have to if the pension is not a viable option. However, if it's just a phrasing issue and there is pension allowance still available and you're not going to be near the LSA then pension generally beats ISA in most but not all scenarios.

Should I just go to an IFA and say "here's my money, please sort it out for me"?

It's like any job in life. You either DIY or you pay someone to do it for you. If you DIY well, you can save money. If you DIY badly, it can cost you more than getting a professional to do it. Given your high cash balance and lack of investments so far, it's been costing you money.

Marcon

Given the restrictions on how much you can pay into the CS scheme, you're likely to have scope to pay more into another pension arrangement, but impossible to know that without knowing your salary etc etc - and here isn't the place to post too much personal information.

Sounds as if proper (paid for) advice would be an excellent investment.

LHW99

https://forums.moneysavingexpert.com/discussion/comment/82004239#Comment_82004239

I would second this, and add to make sure you consult an IFA, the "I" is important and stands for Independent.

Albermarle

Savings are good for shorter term needs ( < 5 years) and for some a feeling of security.

However in the longer term, the right investments should produce more growth, whether they are in a pension or outside a pension. The pension gives you a tax advantage, but access to the money is not allowed until you reach a certain age ( currently 55 but rising to 57).

The fact you have a backstop of a guaranteed civil service pension, means you can potentially take a bit more risk with your investments to hope to achieve higher growth.

Regarding whether to pay for professional advice, or not, is a common question on these forums.

Many of the regular posters DIY their investments/pensions, some at a more sophisticated level than others.

At a basic level it is not rocket science, and there are many low priced simple funds suitable for the DIY investor. The internet has made access a lot simpler than it used to be many years ago.

If you are reasonably numerate, prepared to do some reading ( these forums can be useful), and not the type to panic at setbacks, then it is worth thinking about.

Even if you engage an IFA, the more you understand, the more you will understand what they are saying. Knowledge is power as the saying goes.

DRS1

You mention having £250k in an NS&I bond which matures this year. Depending on the nature of this bond (eg is it a 5 year Guaranteed Growth Bond held outside an ISA?) you could find you have a hefty chunk of taxable savings interest this tax year. Maybe enough to push you up a tax band? That alone could make it worth thinking about boosting your pension contributions (if you have the room to do that).

Username_Is_Unique

https://forums.moneysavingexpert.com/discussion/comment/82004785#Comment_82004785

It's a 12-month Guaranteed Income Bond - deliberately done for monthly rather than annual income as I worked part time last year and only basic tax but this year is higher rate. It's life insurance money and I wasn't in a place to plan properly so just locked it away. Estimated tax due is being taken through PAYE as a code adjustment so hopefully I'll not have much of a bill to settle.

Due to the scheme limit, I can't pay more into my CS pension as I'm already at the maximum AVC. I do have headroom on the overall limit though.

https://forums.moneysavingexpert.com/discussion/comment/82004363#Comment_82004363

I don't mind taking risks provided I know what they are, but at the moment I think the biggest risk is my own ignorance so I'm researching away. My numeracy is pretty good.

Rather coincidentally, yesterday my bank offered me a free session with an investment advisor so I think I'll take them up on that as an information gathering exercise. It fails on the "Independent" side so I'll not leap to do what they suggest.

DT2001

What research are you doing?

There are some excellent threads on here covering early retirement, the Number (how much you need/want in retirement), etc. There are also good podcasts and YouTube videos. I like Fidelity’s podcasts and James Shack’s videos. Other posters will hopefully point you in the direction of other sources of good guidance.

I used an IFA in the past. Their role, as I see it, was to provide guidance not to get better returns - to avoid costly mistakes. I now have a written plan which helps when the market ‘wobbles’ and the knowledge that my investments are pretty much inline with the IFA’s suggestions. I have a fund for one off advice when our circumstances change so it is not all or nothing.

Good luck

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82005697#Comment_82005697

That is good. I had visions of tens of thousands of interest landing in one lump.

If you are going to be a higher rate taxpayer you might think about gilts as an alternative to rolling the NS&I bond into another one. They won't give you the income stream but low coupon gilts bought for a clean price below 100 and held outside a tax wrapper can be beneficial for higher rate taxpayers. It will take you quite a while to get that sort of money into an ISA or even a pension.