The "Save 12k in 2017" Thread!

Wentthedaywell? wrote: »

Big fanfare - I've now semi retired and have received my pension lump sum. My savings this month are...£62,000! :j

This is a once-in-a-lifetime payment and it doesn't feel quite right reporting it here, a bit boastful and certainly not a typical month (I wish!). But it is savings I've made through my working life via my pension and have never counted anywhere because it was "invisible" but it is now sitting in my bank.

I've now got to decide what to do with it. Oh for the happy days of being able to bung it in a building society at 6% interest!

Many congrats Wentie, you've reached a major milestone there! No need to feel you are boasting about the lump sum at all, you've earned it after all.

I'm reporting £1828.55 this month. Things have been a bit expensive recently, but partly due to a trip to visit family in Switzerland last week, so I musn't grumble!

I have got another £1,079 to add for this month :j

Xenon The Excruciatingly Lazy And Astonishingly Handsome

This month a mighty £1207 This Year £9062

So that's the mortgage deposit + solicitor + other costs + small emergency fund all set

CrabbitDutchie wrote: »

Have realised just how much I hate using a credit card and then paying it off - even with it being paid off in full every month. It feels like paying for stuff twice.

When I buy something on a credit card, I enter it as a purchase on my spreadsheet, and the DD to pay it off automatically appears on the forthcoming movements sheet as a transfer between my accounts, same as all those needed to operate the multiple current account and regular saver regime so many of us operate.
So I don't feel like I'm paying twice.

darkidoe wrote: »

While we are on this topic, just to familiarise myself with how pensions work, so I presume this lump sum is 25% of your entire pension that you do not have to pay tax on?? Any subsequent income you get from the pension, you have to pay tax according to the income tax rules?

How do you access your pension; is there a draw-down plan or you get to choose year to year?

Thanks!

No, it's even better than that, Darkidoe!

I have a defined benefit pension, which gives me a guaranteed, index-linked income for life. In addition I got a £90,000 tax free lump sum (the balance was my Additional Voluntary Contributions but I'd already counted that in my monthly updates here).

There is no "pot" as such, but I think mine's the equivalent of about £500,000 (the index-link boosts the value quite a bit).

Defined contribution pensions work as you have set out I think, but I don't know the details. It's such a complicated subject and I wish I'd learned more about it when I was younger. I had a mad maxing-out of my AVC in the final couple of years but I should have done it ages before - tax free money on the way in, and tax free on the way out.

I'm a bit of a pensions evangelist now and keep nagging people to sort theirs out NOW and pay extra and not to leave it too late! I'd really recommend looking the Retirement thread. There's lots of very knowledgable and helpful people there, they really helped be make the right decisions.