Early-retirement wannabe
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I have a DB pension from my first job that will give me £1600 pa at 60 but the rest for us is DC. I am putting in just under £40k via Sal sac now (latestarter in catch-up mode) and OH is adding well over £30k (harder to tell exactly as he can Sal sac his bonus). OH gets the employer NI too.
He did start talking last night about brexit and needing to pay off the mortgage if interest rates rose rapidly - a reminder of the basic maths around tax/NI relief soon knocked that on the head
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Not sure what you refer to as attack. We are both effectively salary sacrifice so save income tax plus NI.
Annual allowance constantly dropping, often without notice, "special" annual allowance being brought in for one year only, lifetime allowance dropping, annual allowance taper, all a big pain.
I was earning far more than my wife and we wanted to save as much of my salary as we could, but often saw big tax bills, and tracking everything was a pain.
There was also the constant threat of tax free lump sum being capped and/or tax relief being restricted, so we grabbed the 25% as soon as we could!I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
LTA in increasing.
I don’t have massive sympathy for people who can afford more than £40k annual. Morally there should be limits as it fundamental the wealthy subsidise the less well off.
The only thing that does annoy is trying to plan with the goal posts constantly moving.0 -
Same here - I started to activate drawdown the weekend after my 55th birthday and took the 25% as soon as I could. I actually thought 'ha ha, got it!' when it hit my account!gadgetmind wrote: »There was also the constant threat of tax free lump sum being capped and/or tax relief being restricted, so we grabbed the 25% as soon as we could!A positive attitude may not solve all your problems, but it will annoy enough people to make it worth the effort Mortgage Balance = £0
"Do what others won't early in life so you can do what others can't later in life"0 -
gadgetmind wrote: »Buy a copy of Tim Hale's "Smarter Investing" as it's very readable, very practical, and will be the best money you've ever spent.
Great book. It was what got me started.0 -
LTA in increasing.
After year upon year of massive drops, it's starting to creep up with inflation. I hit a £20k tax charge to my pension for no other reason than LTA dropping and sterling also dropping due to Brexit.
The "special" annual allowance was £30k, and tapering can reduce what you can contribute to £10k pa.I don’t have massive sympathy for people who can afford more than £40k annual.
I had an unexpected bonus during my final year of employment, stopped contributing to my pension straight away, but still hit a £3k charge for exceeding my annual allowance.
Yes, it's like trying to walk during an earthquake and it's no wonder that some turn their backs on pensions.The only thing that does annoy is trying to plan with the goal posts constantly moving.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
gadgetmind wrote: »It would be interesting to know how many are aiming for (or who have achieved) early retirement without any DB pensions? Given how DC is under pretty much continuous attack from the tax man, it's a difficult thing to achieve, and I found it hard despite a healthy income.
Being a single income household seems to make it very hard especially with the 40k AA.
So DWs pension gets 3.6pa and I mine gets 40 then we live off mid 30s and hopefully will be able to retire on a similar amount for life at 55 - although the main problem will be tax as the vast majority will be in my name. A tactical divorce seems to be the best option…..I think....0 -
Being a single income household seems to make it very hard especially with the 40k AA.
Yup, I reckon DC can work well if both partners are in decent jobs as annual income of £40k-£50k-£60k each is according to HMG "doing a great job, keep it up!" whereas a single £100k+ is "nasty person, must punish!"A tactical divorce seems to be the best option…..
I did mention that. Once.
Pleasingly my wife just had some surprise income of around £10k that's been lobbed into her pension for the good old "tax relief despite no tax paid" thing.
As for tax, with PCLS, personal allowance, and full 20% bracket, I'm on around 12% tax with no NI, so not too bothered TBH. Once state pension starts to trickle in 10+ years down the line, it will cover my tax bill!I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
LTA in increasing.
I don’t have massive sympathy for people who can afford more than £40k annual. Morally there should be limits as it fundamental the wealthy subsidise the less well off.
The only thing that does annoy is trying to plan with the goal posts constantly moving.
I used to think that before I contemplated putting 75% of my salary into a pension and thought that it would take me over the £40k allowance.
Perhaps the people contributing £40k per year are just prioritising saving rather than saving as a bi-product of being "rich"?0 -
gadgetmind wrote: »Yup, I reckon DC can work well if both partners are in decent jobs as annual income of £40k-£50k-£60k each is according to HMG "doing a great job, keep it up!" whereas a single £100k+ is "nasty person, must punish!"
I did mention that. Once.
Pleasingly my wife just had some surprise income of around £10k that's been lobbed into her pension for the good old "tax relief despite no tax paid" thing.
As for tax, with PCLS, personal allowance, and full 20% bracket, I'm on around 12% tax with no NI, so not too bothered TBH. Once state pension starts to trickle in 10+ years down the line, it will cover my tax bill!
Got me thinking now, we earn some rent a room income which is less than 7495 so ignored for tax purposes but what if instead DW was self employed running a 'board and lodgings' business then it could be earned income and thus could go into her pension with the tax relief....I think....0
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