When do you start Investing?

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  • DrEskimo
    DrEskimo Posts: 2,348 Forumite
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    atush wrote: »
    What is your mtg rate? LTV?

    As said above you are very conservative, so i'd consider cutting back the overpayments and upping that 5% of investments. is it in a S&Sisa?

    Detailed in the last paragraph of my post :money:
    DrEskimo wrote: »
    My mortgage is quite high at ~£300k, but then my LTV is 53%, with a rate of just 2.74%. Overpayments now are probably not very wise, but when I renew my product and get the rate down 1.39% I will probably stop overpaying and look to reallocate to the other categories. Most likely to increase my S&S ISA contributions.

    Yea it's in a S&S ISA. I will most likely move the overpayments to the S&S ISA. We are always looking to move so I'm still undecided if I want it in something more medium term that's all...
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
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    DrEskimo wrote: »
    Overall, I am pretty light on my pension due to only small contributions during my twenties though...

    Long ago one of my friends bought extra years of service in USS. If that's still available in the DB scheme it might be a good buy especially as the continued existence of the DB section looks pretty precarious. Buy now while stocks last! (He did it as a basic rate taxpayer and hasn't regretted it.)

    There was also a Pru AVC available which could be used to take TFLS without commuting the pension. Maybe that task is now covered by the DC bit.

    My view is that it's almost always worth using pension contributions to avoid HRT while that facility is still available. Time teaches that such opportunities don't last forever. (How long will a £20k annual allowance for ISAs last? Dunno. How soon will your total wealth in ISAs be subject to a Lifetime Allowance? Dunno.)
    Free the dunston one next time too.
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
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    DrEskimo wrote: »
    We are always looking to move so I'm still undecided if I want it in something more medium term that's all...

    "We". If you're married you could check whether USS still offers "Allocation" whereby you volunteer to accept a smaller pension so that your widow will get a bigger one. It's a good way of covering widows who might themselves have only a small pension because of, for instance, child-rearing years, or years spent looking after elderly parents, or parents-in-law, or whatever.

    You are far too young to do it but it might be wise to establish whether it still exists and whether it will continue to exist into the years when you are much nearer to retirement. For example, I have no idea whether deferred pensioners are allowed to do it. That might be worth knowing.
    Free the dunston one next time too.
  • DrEskimo
    DrEskimo Posts: 2,348 Forumite
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    kidmugsy wrote: »
    Long ago one of my friends bought extra years of service in USS. If that's still available in the DB scheme it might be a good buy especially as the continued existence of the DB section looks pretty precarious. Buy now while stocks last! (He did it as a basic rate taxpayer and hasn't regretted it.)

    There was also a Pru AVC available which could be used to take TFLS without commuting the pension. Maybe that task is now covered by the DC bit.

    My view is that it's almost always worth using pension contributions to avoid HRT while that facility is still available. Time teaches that such opportunities don't last forever. (How long will a £20k annual allowance for ISAs last? Dunno. How soon will your total wealth in ISAs be subject to a Lifetime Allowance? Dunno.)

    Sorry missed these replies!

    Yes I agree. I didn't do AVC to my pension last year, as my savings were depleted by a rather hefty renovation project. The money was needed to bulk my savings up again!

    Unfortunately it looks like they are taking away the 1% match bonus on AVC to the DC side next year in April as part of ongoing negations around the affordability of the USS scheme...as you say...how long will these perks last!
    kidmugsy wrote: »
    "We". If you're married you could check whether USS still offers "Allocation" whereby you volunteer to accept a smaller pension so that your widow will get a bigger one. It's a good way of covering widows who might themselves have only a small pension because of, for instance, child-rearing years, or years spent looking after elderly parents, or parents-in-law, or whatever.

    You are far too young to do it but it might be wise to establish whether it still exists and whether it will continue to exist into the years when you are much nearer to retirement. For example, I have no idea whether deferred pensioners are allowed to do it. That might be worth knowing.

    Ah OK I'll have a look into it.
  • Moneycat
    Moneycat Posts: 41 Forumite
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    edited 26 June 2018 at 2:24PM
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    Personally it was after these 3 boxes were ticked:

    1) No outstanding debts (except residential mortgage)
    2) Mortgage less than 60% LTV and 10% yearly over payments paid
    3) 12month living expenses readily accessible in cash (regular savers)

    Pension would probably come 3rd or 4th on that list but mine is taken care of so not mentioning it here.

    Investment involves risk so ideally, you should have your financial foundations in place first.
  • swindiff
    swindiff Posts: 865 Forumite
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    edited 26 June 2018 at 4:17PM
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    I am in the USS, making the same contribution as you to the DB pension. However, I have decided to put any spare cash I have into the DC scheme which runs alongside it. My employer offers salary sacrifice and as you know there are currently no fees for investing in the DC scheme. I am paying 25% into the DC scheme with my employer paying the match of 1%. On my current salary this means that £875/month is going into my DC scheme at a cost to me of just £572. Over £300/month (53%) gain immediately. I don't know how I could beat this sort of gain putting it anywhere else?
  • atush
    atush Posts: 18,726 Forumite
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    DrEskimo wrote: »
    Detailed in the last paragraph of my post :money:



    Yea it's in a S&S ISA. I will most likely move the overpayments to the S&S ISA. We are always looking to move so I'm still undecided if I want it in something more medium term that's all...

    I dont read an entire thread before I reply to the OP.
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
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    swindiff wrote: »
    I am in the USS, making the same contribution as you to the DB pension. However, I have decided to put any spare cash I have into the DC scheme which runs alongside it. My employer offers salary sacrifice and as you know there are currently no fees for investing in the DC scheme. I am paying 25% into the DC scheme with my employer paying the match of 1%. On my current salary this means that £875/month is going into my DC scheme at a cost to me of just £572. Over £300/month (53%) gain immediately. I don't know how I could beat this sort of gain putting it anywhere else?...

    Maybe DC rather than DB is not a bad idea; I suggest that you scroll down to “It is reckless for USS to keep betting on equities” at
    http://www.johnralfe.com/main_pages.php?page_num=2


    P.S. Will you be allowed to start drawing money from the DC scheme before the DB scheme's normal retirement age?
    Free the dunston one next time too.
  • swindiff
    swindiff Posts: 865 Forumite
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    I actually asked that question very recently this was the response.

    Unfortunately you can’t currently draw any of the Investment Builder pot without drawing at least part (under flex) of your main benefits. It is something we’re looking into currently but I’m afraid we can’t give a date for when that might take effect.

    So not at the moment but hopefully by the time I retire in about 12 years :T
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
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    edited 27 June 2018 at 8:40PM
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    swindiff wrote: »
    So not at the moment but hopefully by the time I retire in about 12 years

    It's a DC scheme: can they stop you just transferring it to, say, a SIPP (or penalise you if you do)?
    Free the dunston one next time too.
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