Funding for retirement in 20 years?

Pensions, ISA's VCTs

Unfortunately risk tends to be inversly proprtional to gain.

Take lots of little different risks - 20 years is plenty for some of them to come through.

I think one realistically needs to know your current tax rate and tax rate over the next 20 years, your likely income (and therefore top tax rate) in retirement. Your marital / children and therefore inheritance needs now - or how they might change over the next 20 years and lots of other things before one can make proper suggestions.

Bitstring , from the wonderful person Hammer Head said

Yep, you need to think bigger. Look £10-20k will just about buy a decent new car, right? Over 20 years, if you keep ahead of inflation by 4%/year (very tough to do without taking significant risks) you'll about double it. That's not going to keep you into old age very far (two cars worth!).

You need to be thinking more along the lines of sticking in 15-20% of your gross salary into something, every year for 20 years, and hoping you can then take out 30-40% of your final gross salary for the 20 years after that. Depends what you need to live on of course, but £20k wouldn't get me and the wife very far at all.

Give up on pensions.

The pensions industry are crooks who take your money and do a bad job and pay too much to themselves.

Invest in property.

But bear in mind that property prices are exceptionally high at the moment, perhaps because everyone in the country seems to think like Mr Saxton.

So Invest in Indian Property ?

At least if you lose out you only have yourself to blame and not a bunch of crooks.

It was damning. I wonder how Cos ever got away with taking 'payment holidays'..?

They behaved like Maxwell, but apparently it was all legal.

And how on earth did nobody see it coming...?

Wow...don't even think of it...!

Remember your contributions are likely to pay for existing pensions, not your own. If the scheme is already and deficit and now closed to new members there maybe nobody left to pay the pensions of the youngest people remaining in the scheme as those already retired refuse to die on cue and drain the scheme of its reserves.

Cash ISAs, Bulgarian and Eygptian property.

In message , Peter Saxton writes

What? And deal with Estate Agents? They are just crooks who take your money and do a bad job and pay too much to themselves.

You don't need to deal with estate agents to invest in property.

Well, the pension protection fund should cover things now -

With that amount of money you'll be looking at a real increase of between around 2.5 to 3.9 times the original sum if you invest directly in shares. If you pay someone to do it for you, then you're looking at 2 to 3.2 times at a charge of 1%pa .i.e (18 - 20% less) [1]. Cash would be the most risky investment over that period and therefore I've ignored it.

In a pension you could take 25% tax free and then income of ~7.2%. -

On £20,000 that's -

25% Income £19,500 £4,212 £10,000 £2,160

and half that for a £10,000 starting sum.

The governments minimum income guarantee (MIG) which you would get your income made up to would be around £9,077 - £11,451 making such an investment pointless. You'd need to find some investment vehicle that wasn't taken into account by the benefits people such as collectibles or antiques, and you'd need to know what you were doing. Perhaps you could make some genuinely value enhancing addition to your property or move, although there's a high (~2%) cost to the latter.

Daytona

[1] Barclays Capital Equity Gilt Study -

106 Years -

Inflation 3.9% Equity Capital Growth 4.6% Equity Income Growth 3.8%

Total Real Growth 4.5%

1990 - 2005 low inflation period -

Inflation 2.7% Equity Capital Growth 7.0% Equity Income Growth 2.7%

Total Real Growth 7.0%

ISBN 0836217578

Err, and ISAs

HTH, Alan

If you want to deal with estate agents then go ahead. Even if you do you are in a position of influence completely different to handing the money over and letting an incompetent waste it.

I'm expecting to getting sufficient income from property in my old age. My wife's daughter is 24 and already has a BTL and deals with it herself - but she is an estate agent!

No - You'd blame the Estate Agents :-)

Considering he has a final salary pension scheme plus presumably the state pension, I guess his other income would take him well above 11.5K.

Sorry, I'm nonsensically comparing inflated Pensions Credit (was MIG) with real investment returns. PC is £5,931pa single, £9,051pa couples.

Can't make any more out of it even if we wanted to without, as you say, the other sources of income.

Daytona

"Peter Saxton" wrote

Ah, but if "you only have yourself to blame", then you have

*no-one* else to go after for compensation. But if you can blame "a bunch of crooks", then you can go after *them* for compensation. And even if *they* can't pay out, then you can go to the Financial Services Compensation Scheme / Pension Protection Fund etc (depending on type of pension).

So why do you think it is better to "only have yourself to blame and not a bunch of crooks"?

wrote

For the most part, they *had* to -- in order to keep all their tax benefits. [If their funding level went over 105%, they began losing the tax benefits...]

"news" wrote

Isn't that 1.5%, when applied to *all* the house sales across the country during the year, actually VERY similar to the 9 Billion total you quoted above?

Does she do her own accounts?