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13-03-2020, 05:25   #961
Yellow_Fern
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You do realise pension saving is tax free but regular saving is not?
I always encourage pensions, but pensions are not tax free. Pensions are not taxed as they grow and you have the tax free lump size option but aside from that they are taxed when you use them just like anyother income.
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13-03-2020, 08:43   #962
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8 years of stock market gains now wiped out in a week. .........
S&p500 was this low back in Dec 2018.


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.......Those with pensions have no control over their own money and can only look on and weep. If only they had of put the money into stocks directly instead of a pension they could of sold out weeks ago when it was clear what was going on. Wonder is this the final nail in the coffin for the pension industry?
Daftest load of sh1t I've read in a while.
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13-03-2020, 10:09   #963
Henry Ford III
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I always encourage pensions, but pensions are not tax free. Pensions are not taxed as they grow and you have the tax free lump size option but aside from that they are taxed when you use them just like anyother income.
Don't forget about tax relief on premiums.
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15-03-2020, 13:17   #964
 
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Don't forget about tax relief on premiums.

Heard talk on radio earlier about emergency budget within couple weeks, expect major major changes to tax system, money has to be raised to pay for the unprecedented effects of what's unfolding in our country. Hundreds and thousands of people are about to become unemployed.
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22-03-2020, 12:55   #965
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8 years of stock market gains now wiped out in a week. Those with pensions have no control over their own money and can only look on and weep. If only they had of put the money into stocks directly instead of a pension they could of sold out weeks ago when it was clear what was going on. Wonder is this the final nail in the coffin for the pension industry?
This dip will be a distant memory in five years, and nobody who needs the money to retire on within five years should be all-in on equities if they are relying on their pension as their main/only source of income.

I kept putting as much as I could into my pension during the GFC and it's worked out very well for me.
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05-04-2020, 13:46   #966
christy G
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Hi I'm 28 and dont no much about pensions, I'm looking to start saving now . Should I open up my own penison scheme and put money in each month ?

Or I could put In 14k now straight away would it build up over 30 years if I just left it in it ?

I have an apartment rented out which I get 1200 a month from that is going to pay off my mortgage when my partner and I decide to build or buy new .

Thanks for your advice in advance.
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05-04-2020, 15:32   #967
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Originally Posted by christy G View Post
Hi I'm 28 and dont no much about pensions, I'm looking to start saving now . Should I open up my own penison scheme and put money in each month ?

Or I could put In 14k now straight away would it build up over 30 years if I just left it in it ?

I have an apartment rented out which I get 1200 a month from that is going to pay off my mortgage when my partner and I decide to build or buy new .

Thanks for your advice in advance.
If you are still paying a mortgage on that apartment then use the 14k on that instead
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05-04-2020, 16:03   #968
Bass Reeves
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Originally Posted by christy G View Post
Hi I'm 28 and dont no much about pensions, I'm looking to start saving now . Should I open up my own penison scheme and put money in each month ?

Or I could put In 14k now straight away would it build up over 30 years if I just left it in it ?

I have an apartment rented out which I get 1200 a month from that is going to pay off my mortgage when my partner and I decide to build or buy new .

Thanks for your advice in advance.
It unlikly you would have 14K in higher tax band income. However you could look at your 2019 tax year income and see how much you paid at the top tax rate. You can pay that amount into a pension and recover the tax from 2019 tax year before October. You can repeat this as often as necessary to put money into you pension tax efficient.


For example if you paid tax on 10K in 2019 at the 40% rate and put that amount into your pension you would receive 4K back in tax. So you would still have 8K left in savings. Next year if you repeated the exact same amount you put 8K + 2K(I say borrowings but it may just be using an over draught) into your fund you receive 4K back leaving a 2K in savings. You have now put 20K into the pension fund and you have 2K in savings. Make your money work for you.

Finally I generally never worry about mortgage payments it is the cheapest money you ever borrow, it car loans, holiday borrowings , paying insurance and car tax in installments etc that ruins wealth creation. Finally if you can build or buy without selling the apartment down the line consider it.
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05-04-2020, 20:28   #969
christy G
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It unlikly you would have 14K in higher tax band income. However you could look at your 2019 tax year income and see how much you paid at the top tax rate. You can pay that amount into a pension and recover the tax from 2019 tax year before October. You can repeat this as often as necessary to put money into you pension tax efficient.


For example if you paid tax on 10K in 2019 at the 40% rate and put that amount into your pension you would receive 4K back in tax. So you would still have 8K left in savings. Next year if you repeated the exact same amount you put 8K + 2K(I say borrowings but it may just be using an over draught) into your fund you receive 4K back leaving a 2K in savings. You have now put 20K into the pension fund and you have 2K in savings. Make your money work for you.

Finally I generally never worry about mortgage payments it is the cheapest money you ever borrow, it car loans, holiday borrowings , paying insurance and car tax in installments etc that ruins wealth creation. Finally if you can build or buy without selling the apartment down the line consider it.
Thanks for your advice, yeah that the plan I dont want to sell it would prefer to rent.

Should I own my own penison scheme and pay into that each month not sure where to start just start looking a few companys up ? Also how safe Is your money in your own penison scheme?
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06-04-2020, 19:22   #970
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If you are still paying a mortgage on that apartment then use the 14k on that instead
Why on earth would you recommend that?

Overpaying a mortgage would be far down the list of priorities for 99% of people and without knowing more, is extremely likely to be terrible financial advice.

Christy, what is your current employment situation and income? If you are employed, your employer will have a pension scheme, so that should be your first port of call with regards looking in to pension options.

And while you should definitely be putting money in to a pension, it is important to keep at least some money in emergency savings (the past month being a very good example of why). For pensions, when in steady/regular employment, the main thing is the regular contributions (a percent of your salary) and build it up over the years. While it may be of benefit to kickstart a pension with a small portion of the 14K, I would recommend keeping a good chuck of that in easy-access emergency savings. Especially when you have an investment property (imagine, for example, if your tenants stopped paying rent next month; it could take months, even a year to evict them - how would you cover the mortgage repayments while waiting to evict them and find new tenants? etc)
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06-04-2020, 19:46   #971
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I'm currently putting in what my employer matches 6%.

I definitely won't be increasing it as have to wait 30 years for it.

I'm saving money regardless outside of the pension but don't understand people trying to max it out with as much as they can at a young age.

Live your life for now, not for retirement.
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06-04-2020, 21:31   #972
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Why on earth would you recommend that?

Overpaying a mortgage would be far down the list of priorities for 99% of people and without knowing more, is extremely likely to be terrible financial advice.

Christy, what is your current employment situation and income? If you are employed, your employer will have a pension scheme, so that should be your first port of call with regards looking in to pension options.

And while you should definitely be putting money in to a pension, it is important to keep at least some money in emergency savings (the past month being a very good example of why). For pensions, when in steady/regular employment, the main thing is the regular contributions (a percent of your salary) and build it up over the years. While it may be of benefit to kickstart a pension with a small portion of the 14K, I would recommend keeping a good chuck of that in easy-access emergency savings. Especially when you have an investment property (imagine, for example, if your tenants stopped paying rent next month; it could take months, even a year to evict them - how would you cover the mortgage repayments while waiting to evict them and find new tenants? etc)
Assuming you have a roughly six month emergency fund many and maybe most advisors would say pay off your mortgage. Its very conservative advice but very safe advice too.
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06-04-2020, 21:41   #973
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Why on earth would you recommend that?

Overpaying a mortgage would be far down the list of priorities for 99% of people and without knowing more, is extremely likely to be terrible financial advice.

Christy, what is your current employment situation and income? If you are employed, your employer will have a pension scheme, so that should be your first port of call with regards looking in to pension options.

And while you should definitely be putting money in to a pension, it is important to keep at least some money in emergency savings (the past month being a very good example of why). For pensions, when in steady/regular employment, the main thing is the regular contributions (a percent of your salary) and build it up over the years. While it may be of benefit to kickstart a pension with a small portion of the 14K, I would recommend keeping a good chuck of that in easy-access emergency savings. Especially when you have an investment property (imagine, for example, if your tenants stopped paying rent next month; it could take months, even a year to evict them - how would you cover the mortgage repayments while waiting to evict them and find new tenants? etc)
Because the poster said they have 14k that they want to put into a pension. If you are paying a mortgage I'd seriously consider paying off mortgage instead of a pension. Depending on their age and salary they won't get 14k in an avc anyway

I'm also assuming that the 14k is disposable income and not their only funds, otherwise neither mortgage or pension is appropriate and it should be in cash.
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06-04-2020, 22:33   #974
WhatsGoingOn2
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Originally Posted by christy G View Post
Hi I'm 28 and dont no much about pensions, I'm looking to start saving now . Should I open up my own penison scheme and put money in each month ?

Or I could put In 14k now straight away would it build up over 30 years if I just left it in it ?

I have an apartment rented out which I get 1200 a month from that is going to pay off my mortgage when my partner and I decide to build or buy new .

Thanks for your advice in advance.
Offset your tax bill at the end of the year by paying into your pension using as much of the 14k as necessary, repeat next year with whatever is left.
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06-04-2020, 22:34   #975
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Offset your tax bill at the end of the year by paying into your pension using as much of the 14k as necessary, repeat next year with whatever is left.
You can offset 2019 tax and get it back straight away. But you should only do it at the higher tax rate
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