Pension/Investment Contributions

[The G Man]

What we all need to remember regards pension contribution, which I’ve found a staggering amount of people don’t, is that you don’t pay any tax on pension contributions, you’re taxed after pension contributions on your salary are taken off.

 

Tax comes later when lump sum payments are calculated and accordingly, what income a pension pays out.  It’s all very complicated for us mere mortals but it’s never too early to start learning and hoping you’ve done the best with your money.

[Stutopia]

2 hours ago, Ponsonby said:

Going back to the original post, I decided at age 17 to start paying into a pension. I worked for British Coal where many people were taking early retirement and decided that I wanted to be in a similar position so set a retirement age of 55. I have always aimed to be paying around 10% of salary into a pension scheme, so I always topped up my employer contributions to 10%. 

I also wanted to be mortgage free by the time I retired. I have always bought houses that need a little work that I can add value to and continually upgraded. First house was bought in my late teens, worked double shifts 'at pit' whenever there was a colliery emergency to save up for the deposit. I have never earned a huge wage so the above is achievable for a lot of people if they put their minds to it.

Must admit that the idea of a wealth tax makes me feel sick. Most of what I have has been achieved by sheer hard graft and has been achieved on a modest wage. My pension pot and house alone will be worth close to £1M, money used to buy the house has already been taxed, money in pension will be taxed when I start taking it. At 5% they would want £50K from me, for being sensible and ensuring that I am not a financial burden on society when I am old.

 

 

I wish I could grab my 18 year old self and have this conversation.

[evilscorp]

Thought I had a cast iron pension with my current employer of 7 years, nice final salary pension I pay 21.5% of my wage into so I could retire at a 60+ age rather than 70+ I expect it to become (i am 35), Sadly this year its all been shattered, must have been made from British steel (previous employer and that pension went belly up, but has floated to the surface hopefully without going into PPF).

So Now I am looking at a new pension with my employer who I couldn't trust for @*&% with my money. Do I take the £4K cash in hand softner and invest/spunk however I want or trust them with £8K ( incentive to put money into the pension without tax hit.)

 

For me its premium bonds and fingers crossed. 

 

Most of the younger folk I work with just don't realise how much money they will need when they retire to be comfortable. Happy to pay minimum into pensions.

 

As stated its tax efficient to pay more into them, but as long as I keep it under the tax threshold at the other side, I will be happy + no major outgoings.

 

Sadly I get envious of my parents who have pensions close to their incomes after tax when they were employed.

 

Plan for the worst, hope for the best.

 

 

Big money, big money, 1 mil PB. lol. Odds also look surprisingly good once you have decent money in.

[Mikey_S]

17 hours ago, evilscorp said:

Thought I had a cast iron pension with my current employer of 7 years, nice final salary pension I pay 21.5% of my wage into so I could retire at a 60+ age rather than 70+ I expect it to become (i am 35), Sadly this year its all been shattered, must have been made from British steel (previous employer and that pension went belly up, but has floated to the surface hopefully without going into PPF).

So Now I am looking at a new pension with my employer who I couldn't trust for @*&% with my money. Do I take the £4K cash in hand softner and invest/spunk however I want or trust them with £8K ( incentive to put money into the pension without tax hit.)

 

For me its premium bonds and fingers crossed. 

 

Most of the younger folk I work with just don't realise how much money they will need when they retire to be comfortable. Happy to pay minimum into pensions.

 

As stated its tax efficient to pay more into them, but as long as I keep it under the tax threshold at the other side, I will be happy + no major outgoings.

 

Sadly I get envious of my parents who have pensions close to their incomes after tax when they were employed.

 

Plan for the worst, hope for the best.

 

 

Big money, big money, 1 mil PB. lol. Odds also look surprisingly good once you have decent money in.

My dad had a final salary pension with British steel, luckily he got out before it went tits up but a lot of his pals got totally shafted. 

[evilscorp]

1 hour ago, Mikey_S said:

My dad had a final salary pension with British steel, luckily he got out before it went tits up but a lot of his pals got totally shafted. 

Yeah, my dad was the same.

 

The pension map is in a total shift at the moment. 

[gangzoom]

On 24/02/2021 at 21:40, HEADPHONES said:

I was in an NHS final salary pension.

Over the past few years I saw my monthly contribution increased FOUR fold and the retirement age increased a few years.

 

The NHS pension is probably the best/safest scheme around. The final payout is directly related to your contributions and the pay out growths at a inflation+1.5% rate guaranteed. Compounded over 30 years it a crazy figure at the end.

 

The final salary scheme was even crazier, presuming you are near the top of the NHS pay scale at retirement, 50% pension at that amount is substantial higher than average UK salary let alone average UK pension payout.

 

Yes you will be taxed for having such a generous pension, but as they say its a nice problem to have. I much rather pay tax on a large pension pot than not have a large pension pot to start off with.

 

Gold plated I believe was the term uses to describe NHS final salary schemes, having looked into the figures recently I can see why they were called that.