Conor:
Where? Even in a conservative 60% equities and 40% bonds fund you’d have seen decent double digit growth just in the last 12 months. The index fund I’m invested in (Vanguard FTSE Global All Cap) went up 36% from this time last year.
As I already said…
yourhavingalarf:
I’m sure that I could have done better.
yourhavingalarf:
Conor:
Where? Even in a conservative 60% equities and 40% bonds fund you’d have seen decent double digit growth just in the last 12 months. The index fund I’m invested in (Vanguard FTSE Global All Cap) went up 36% from this time last year.As I already said…
yourhavingalarf:
I’m sure that I could have done better.
The 36% rise of the fund Conor cites is good.
The 6% loss the previous year may not have got a post made about it though?
.
Conor:
Carryfast:
How much interest are you talking which beats paying down the compound interest of a mortgage combined with the unbeatable investment of property.Even a difference of just 0.1% better return on investing the money and the mortgage interest rate makes it better using your money you were going to overpay with to invest.
Lets illustrate…
Mortgage at 2%, outstanding £100,000, time left 25 years.
Using this mortgage overpayment calculator: moneysavingexpert.com/mortg … alculator/
A one off lump sum payment of £100 will reduce the amount you repay on your mortgage over the 25 years will save you a total of £65 in interest. You’ve therefore gained £65 over 25 years.
For the next bit we’ll use a simple compound interest calculator: thecalculatorsite.com/finan … ulator.php
If you invest £100 as a one off into something that gives you a 2.1% return, just 0.1% more than the mortgage rate, over the same 25 year period that £100 will be worth £168.13, you’re £3 better off.
However lets look at it again with more realistic real world figures. The long term average growth for the stock market is 7%. So plumbing that into our £100 invested over 25 years at 7% that £100 now becomes worth £542.74, you’ve gained £442.74 which is £377 more than the interest you’d saved if you’d used the £100 to make a single overpayment on your mortgage.
So lets look at another scenario where we make regular overpayments of £100 a month on our £100k 25 year @2% mortgage.
In this scenario we save £13973 in interest and we repay the mortgage in 21 years and 2 months, 4 years and 10 months early.
However if we invest the £100 a month instead not even the full 25 year initial term but the 21 years and 2 months above when we’d become mortgage free overpaying, again at the long term 7% average return the amount of our pot would be worth £58,404 leaving us £44,431 better off than overpaying the mortgage.
And that’s your money working the hardest for you. However for most people it’s a hard thing to do because there’s nothing like the security of owning your own home mortgage free so despite it being something that is going to leave them £10,000s or even £100,000s worse off than they could have been most will choose overpaying the mortgage over investing.
By your logic the best retirement plan would be to sell the house then use the cash to buy an annuity and then rent.Good luck with that when even buying an annuity with equity release is a really dumb idea.
No the best retirement plan isn’t necessarily that. If you go into care though if you were renting you’d be much better off than being a home owner as when renting the council cover the cost whereas if you owned a home they’d force you to sell it to pay for that care. Who said anything about buying an annuity? Sod that. Drawdown leaving the pot invested to continue to grow.
Pensions are a scam if they weren’t they’d be economically unviable for the provider.
Let alone when income tax is taken out of the pension payments when they are added to your state pension income.Assuming that you live long enough to get back even half of the pension fund.You only pay tax on the amount that, state pension included, takes you over the personal allowance so currently if you’re on full state pension and take only £3,161 a year out of your pension you’ll pay no tax. If you use drawdown instead of buying an annuity when you die anything left in your pension pot goes to whoever you choose to leave your money to in your will.
If your figures worked out everyone would be flogging their paid for house and using the funds to buy a drawdown pension and renting.
All that to get 3k on top of the state pension yeah right.
The fact is a drawdown pension still ain’t going to pay out at a higher rate than an annuity would either way and no pension provider is going to allow a pension to be transferred after your death without some serious charges.
So let’s get this right.Let’s maximise our pension contributions at the expense of 13k on the mortgage for every 100 pm we put in.
Bearing in mind that 100k buys around 5k pa of pension.
All to get an extra 3k max over the state pension if we want to avoid the taxman taking 20% of the payout after that.
Then we can leave all the resulting cash left in the pot as an inheritance at the obvious cost of some serious charges to make it worth it for the provider.Sounds like a plan where do I sign. 
How’s it performed over the last 10 years?
shullbit:
Conor:
shullbit:
I pay into a stocks and shares isa, as soon as my mortgage is paid off i will be upping my saving into this to around £900 a month total. I retire in 16 years so with normal growth i should have well over 200k so lets say 200k for arguments sake, i will draw out 5% per year (10k) leave the rest in to grow at hopefully more than 5% this will give me around £200 per week plus my state pension which will be £170 a week so £370 a week to live on with no mortgage to pay…You’d have been better sticking it in a SIPP if it was for your retirement. You’d get a free 25% top up from HMRC as it was contributed to out of take home pay. Yes you get taxed on the way out but not all of it and SIPP beats ISA every time.
monevator.com/sipps-vs-isas-bes … n-vehicle/
As for the mortgage, I used to overpay but stopped when I realised that the mortgage interest rate was much lower than the rate of growth that same overpayment would get invested.
With a SIPP i cant access my money if i need it for an emergency until i am 55, my ISA i can take it all out tommorow, and no tax to pay either, its ISA all the way for me just for the flexibility. Either way is better than just putting it in a bank account though, thats for sure.
I split mine.
Enjoy the 25%top ups courtesy of the tax man…plus I can’t spend it.
Drop any spare in ISA for mislaneous.
Fork annuities…you’ll have to live till you’re 175,just to get your money back
commonrail:
Fork annuities…you’ll have to live till you’re 175,just to get your money back
If it isn’t an annuity it’s not really a ‘pension’ plan.It’s just a personal investment plan with an age limit to start drawing on it.
I do think that there’s a case for compensation for those that were forced into non transferrable annuities, which are obviously not only laughably rationed in terms of payments but also cease paying on death, on the basis that their pension pot could only be used to buy such an annuity or nothing. 
Either way the returns are still taxable and like any other type of investment it’s a gamble.You can still end up with a lot less than you put in if the markets crash at the point of your retirement and don’t recover fast and it’s obvious that a contribution of only around 100 pm won’t cut it.
Compare all that with maximising the mortgage payments and then funding retirement with resulting property equity which obviously puts you ahead by 13k on every 100 pm and zero tax on the proceeds.
Especially if leaving much/any inheritance isn’t an issue and anything that is left is still subject to inheritance tax allowances of at least around 300 k often a lot more.Unlike SIPPS in which the payments are still taxable on the income of whoever it’s transferred to.
Good to see some guys are clued up
never understand why anyone would sign up to a annuity, £100k pension giving 4% annuity( if your lucky). 100k in the bank, would take 25 years to draw down, at 4k per year, with no interest on it, so retire at 67+ 25 years =92 , average age is 79.4 years for males,makes no sense to me
Or 35 years drawdown at 4k on 2%.
So take 100k pension at 4% interest , draw down at 10k per year runs out at year 13, Or age 80 for some of us.
can’t rely on my company pension, but started a sipps a number of years ago, A great year last year.
If you do the calculations betwwen pension v isa, as long as your not above 20% tax bracket at retirement, its beter in a pension, and if things go pete tong (health), you can still claim benefits( before retirement), where as a isa is classed as savings
Never understood why people want to work after retirement, its a mistery to me, but i guess where all different
I’ll always rember going to a guys funeral, where they discribed all the places the guy had worked over his life, not much else, Hope that dosn’t happen to me.
Here lies mr crush99 age 72, died in his sleep, in his truck , in a ■■■■ smelling layby. worked at eddies, wincantons etc, maxed his hours out every week, payed for his bosses new car, was a proper company man, Thats Not for me.
crush99:
Good to see some guys are clued up
never understand why anyone would sign up to a annuity, £100k pension giving 4% annuity( if your lucky). 100k in the bank, would take 25 years to draw down, at 4k per year, with no interest on it, so retire at 67+ 25 years =92 , average age is 79.4 years for males,makes no sense to me
Or 35 years drawdown at 4k on 2%.
So take 100k pension at 4% interest , draw down at 10k per year runs out at year 13, Or age 80 for some of us.
can’t rely on my company pension, but started a sipps a number of years ago, A great year last year.If you do the calculations betwwen pension v isa, as long as your not above 20% tax bracket at retirement, its beter in a pension, and if things go pete tong (health), you can still claim benefits( before retirement), where as a isa is classed as savings
Never understood why people want to work after retirement, its a mistery to me, but i guess where all different
I’ll always rember going to a guys funeral, where they discribed all the places the guy had worked over his life, not much else, Hope that dosn’t happen to me.
Here lies mr crush99 age 72, died in his sleep, in his truck , in a ■■■■ smelling layby. worked at eddies, wincantons etc, maxed his hours out every week, payed for his bosses new car, was a proper company man, Thats Not for me.
Careful. You’re making an error with your life expectancy figures I think.
Don’t mix life expectancy for someone born in the same year as you, as for someone born in the same year as you, who has already reached retirement age.
Use the actuarial tables, and adjust for your own circumstances
Edit.
ons.gov.uk/peoplepopulation … 2019-06-07
A male 66yrs old today has an average life expectancy of 85yrs, and a 1 in 4 chance of reaching 92yrs.
Carryfast:
Franglais:
Starting a pension is like stopping smoking:
The sooner you do it, the healthier and wealthier you will be, and its easier to start sooner rather than later.Pensions are a total rip off to the benefit of the pension providers and the tax man.
Which is why no one with any sense would use the equity in their house to buy a pension annuity because at best the fund you had then becomes taxable when you draw it wiping out any meagre interest it might pay.In addition to a good chance of dying before you get all or even half of your money back.
Much better to use the cash to pay off a larger mortgage on a better more valuable house and faster and then use the resulting equity to fund retirement.
Bearing in mind that equity release or house downsizing funds aren’t taxable unlike pension payouts.You’re effectively paying tax on your income then paying it again on any growth that your pension might provide when you draw on it.Assuming you even live to see it all paid back.
But who in their right minds buy’s an annuity nowadays?
It’s all about pension drawdown and managing it. I’ve got pensions and ISA’s and just treat it as one pot.
Only difference is tax relief on pension payments (less tax paid now) but tax paid when drawn. This can be managed by drawing max tax free allowance from pension and topping up from ISA.
Sent from my R19 using Tapatalk
If you’re a smoker and drinker who enjoys dangerous sports, you may well get a good deal on a life annuity.
crush99:
Good to see some guys are clued up
never understand why anyone would sign up to a annuity
In many cases they had no choice.It was the only option allowed for pension funds.
Realistically the extortionate annuities payout rates, combined with classing pensions as taxable income, are an unviable rip off for the consumer.
The pension providers both private and state then have the nerve to expect us to accept their laughable claim that everyone is living longer so pension payouts have to be cut and the pension age has to be extended.
That just leaves the best of all the other options.
But I’m surprised that annuities are even still in the running and haven’t been flagged as a scandal requiring compensation for the victims.At least ■■■■ Turpin wore a mask.
As for the bosses and the government.People still swallow their continuous zb that workers must save more for retirement but don’t expect the money to be provided in your wages to save.In addition to the scandal of annuity payout rates and hard earned pensions then being robbed by the taxman.Oh and we’re all going to live until we’re 100.
Franglais:
Careful. You’re making an error with your life expectancy figures I think.
Don’t mix life expectancy for someone born in the same year as you, as for someone born in the same year as you, who has already reached retirement age.
Use the actuarial tables, and adjust for your own circumstancesEdit.
ons.gov.uk/peoplepopulation … 2019-06-07
A male 66yrs old today has an average life expectancy of 85yrs, and a 1 in 4 chance of reaching 92yrs.
Says another thieving pension provider ( government ) with a financial interest in pushing the lie.Tell that to Les McKeown. 
Carryfast:
shullbit:
WhiteTruckMan:
I’d just like to point out to people that their calculations about how much per week they’ll have to live off after saving and investing wisely look good by today’s standards, but in 20 years time might just be enough to super size their once a month big mac.Lets just say the isa ONLY achieves 2% growth per year, at my savings amounts from now until 2037 i would have over 200K to play with. I would be very suprised if the markets only achieved 2% growth, i would be very dissapointed if they dont achieve at least 7% growth and if they do this would give me more than 300k, or you could just leave your money sitting in a bank account and watch it DEVALUE at interest rates of 0.1% when inflation is much more than this.
If i was starting out again at say 20 years old, just £100 a month at 5% per year growth would give me a future investment value of £227K. For me, its a no brainer.Tell us more how £100 pm makes 227k.At £1,200 pa that would take around 200 years not 20 even with the 5% compound.
Oh and even if it did a 227k annuity would buy around 10k pa pension all subject to around 20% income tax after the state pension is added to it.Which means you’ve got to live until you’re around 90 + just to break even.
You think that beats paying a 100 pm more expensive mortgage to buy a more expensive house which you can then use to equity release with no tax burden and for the full amount while you’re still around to spend it.
Thats how compound interest works, if you invest £100 a month for 47 years with a growth of 5% per year you would be investing £57000 but you would earn £160000 in interest if you didnt touch it and it achieved the 5%
Oh and assuming i could do it for 200 years as you say, the £100 per month woud give me 426 million pounds 
Why do you want money when ya old…live today, tomorrow might not come.
Remember this, if you fall I’ll you pay for the privilege, if you’ve never worked or payed nothing into society, you’ll get it payed for you…wake the ■■■■ up people.
Sent from my SM-N976B using Tapatalk
rearaxle:
Why do you want money when ya old…live today tomorrow might not come.
Remember this, if you fall I’ll you paty for the privilege, if you never worked or payed nothing into society, you get it payed for you…wake the [zb] up people.Sent from my SM-N976B using Tapatalk
This is possibly…
THE most important aspect of retirement, your health. You can have mo’ money than Mr Bezos but if your back is knackered and your bowels are as reliable as Network South-East, your retirement will be a never ending merry go round of doctors visits, second opinions, painful procedures and sleepless nights.
Back the to The Who, ‘I hope I die before I get old’.
rearaxle:
Why do you want money when ya old…live today tomorrow might not come.
Remember this, if you fall I’ll you paty for the privilege, if you never worked or payed nothing into society, you get it payed for you…wake the [zb] up people.Sent from my SM-N976B using Tapatalk
Sadly that seems to be the truth. I thought that I would sail when I was older but I find that I just dont want to any more. Glad that I sailed and skied when I was younger. No pockets in a shroud.
Franglais:
If you’re a smoker and drinker who enjoys dangerous sports, you may well get a good deal on a life annuity.
That’s me sorted then.
Munchkin:
But who in their right minds buy’s an annuity nowadays?
It’s all about pension drawdown and managing it. I’ve got pensions and ISA’s and just treat it as one pot.
Only difference is tax relief on pension payments (less tax paid now) but tax paid when drawn. This can be managed by drawing max tax free allowance from pension and topping up from ISA.
The max tax free allowance taking state pension into account is around 3k’s worth of extra pension any income after that gets hit.
Agreed Annuities are a junk product and were from the start.They really should be subject to compensation for miselling let alone pensioners continuing to be locked into them without the option to close them and move their remaining pension pot out and manage it and draw on it as they choose.Bearing in mind that any growth in the pot after annuity payments start goes to the provider not the pension holder.Annuities are a scandal similar to the state pension.Both are rationed and weighted way in favour of the provider and still the providers try to take more based on the laughable everyone is living longer lie.
Which still then leaves the choice of play the stock markets or put the extra money into a larger mortgage building up more equity in a more valuable house.Which should increase in value at a better rate than an ISA and the equity can then be accessed tax free.Also less likely to end up with the possibility of getting back less than you’ve put in than playing the stock markets.
Guarantee Carryfast for a negative prediction of doom no matter what the subject.
Pensions are for an individual to sort out as to what they think they will need.Starting in a scheme early is better than thinking about your pension in your 50`s
I would of thought inheritance would make a lot of difference to most drivers / peoples retirement pot with most houses 3/400 k mark , bit morbid but life is life , my girl is a only 1 so will get the lot so will be a tidy pot though hopefully not for a long while