Savings and Investments thread

I finally retired at 58. The plan had always been to stop at 55 and my financial planning supported this but when the time arrived it just felt too early. Three years later it was just about right after a 40 year shift and two years into retirement I have no desire to return to working. At first it was good to wake up without much of a plan but that soon passed so I fully agree with the need to have structure and to plan ahead.

For what it’s worth, I took the maximum TFC when I retired. Between my wife and I we have since placed £120k into ISAs and with her tax allowances unused, coupled with some carried forward CGT losses (good old share save schemes working for a bank), there hasn’t been a tax hit. Perhaps it can be argued that this wasn’t the best financial planning decision but it felt right and I’m glad we did it especially with the subsequent removal of the IHT benefits for SIPPs.

Rob7Lee said:

A question really for those over 55 or heading to that age with a DC pension.

is anyone NOT taking their full tax free 25% from pension (up to the cap) before age 75? With the new inheritance rules on pensions if you die after 75, aside from the tax free growth for keeping it in your pension (which can be dealt with) I see no reason not to take it in full?

Took it and it's gone helping son buy a house.
Annual withdrawals of the rest keeping tax below the higher rate.
I'll withdraw it all as tax efficiently as possible over the years to come.

Covered End said:

jamescafc said:

TelMc32 said:

Rob7Lee said:

TelMc32 said:

I’m in drawdown and the schedule is to draw my £268,275 by 75. So effectively, two tax free elements to my monthly income - the personal allowance and the tax-free pot - and then the rest from the main pot.  Keeping myself under the top tax rate band, but having to be careful with dividends.

Thanks, exactly my thoughts, just to decide on taking it out over what period. As I'm likely to retire early, withdrawal by 75 will be very easy. However there is one added point that will probably make me draw the lot in one go.

In December 2027 I reach 55 and can access my pension, in April 2028 the age you can access your pension moves to 57. I'm yet to get clarity, but from all I can read, if I don't touch my pension before April 2028 I'll have to wait until I'm 57 which is at the very end of 2029. That period is my concern if government were to change any rules (knowing my luck they would on April 7th 2028!) I could be in Limbo.

I'll probably just take the hit knowing that a bit of growth for a few years will be taxed, but I can minimise that to a degree.

Yeah, I retired at 55 so the tax free element is on a 20 year drawdown schedule. My advisor keeps me updated on what they expect to happen, but I went a couple of years before you, so I don’t have to worry about that 55-57 change.  Good luck. 

Out of interest, how do you reflect on retirement at 55?

I’m actually looking to do it a bit earlier but lots of people warning me not to, so curious for your views 

I retired at 49 and should have retired earlier in hindsight.
What do you do all day everyone says?
The answer is whatever I want to do.

What was your profession CE?

Covered End said:

jamescafc said:

TelMc32 said:

Rob7Lee said:

TelMc32 said:

I’m in drawdown and the schedule is to draw my £268,275 by 75. So effectively, two tax free elements to my monthly income - the personal allowance and the tax-free pot - and then the rest from the main pot.  Keeping myself under the top tax rate band, but having to be careful with dividends.

Thanks, exactly my thoughts, just to decide on taking it out over what period. As I'm likely to retire early, withdrawal by 75 will be very easy. However there is one added point that will probably make me draw the lot in one go.

In December 2027 I reach 55 and can access my pension, in April 2028 the age you can access your pension moves to 57. I'm yet to get clarity, but from all I can read, if I don't touch my pension before April 2028 I'll have to wait until I'm 57 which is at the very end of 2029. That period is my concern if government were to change any rules (knowing my luck they would on April 7th 2028!) I could be in Limbo.

I'll probably just take the hit knowing that a bit of growth for a few years will be taxed, but I can minimise that to a degree.

Yeah, I retired at 55 so the tax free element is on a 20 year drawdown schedule. My advisor keeps me updated on what they expect to happen, but I went a couple of years before you, so I don’t have to worry about that 55-57 change.  Good luck. 

Out of interest, how do you reflect on retirement at 55?

I’m actually looking to do it a bit earlier but lots of people warning me not to, so curious for your views 

I retired at 49 and should have retired earlier in hindsight.
What do you do all day everyone says?
The answer is whatever I want to do.

£25 for me and £150 for Mrs R7L, both on max. £150 for daughter on around half. Other daughter will be back in the game next month!

nothing for father in law 🤣

£375 on max for me. Best ever!

De nada

£25  on 22k
Yiperdedo

Bugger all for me £200 for ‘Er Indoors both approx 50%.

£25 on 20k holding

Athletico Charlton said:

Pension question please.  About the 3 year catch up rule.  If I have had 3 years of small contributions and wanted to catch up a lot over one or 2 years then how does that play forwards?  
Ie in a couple of years time it would look like I had put in a lot more than I am allowed over a look back.
Not sure if that makes sense. Hopefully someone will understand and be able to answer.
Thanks all

I'll try to simplify it using this tax year. 

To "carry forward" unused pension allowance you first need to maximise this tax year's £60k allowance. Then you go back to 2025/26 and use up that £60k allowance, then to 2024/25 and use up that year's allowance & then finally to 2023/24 and use up that years allowance. 

However, you must have enough earned income to do so. ie, you must have earn't / will earn at least £60k this tax year to start the process. You can't simply go back 3 years & put in £100k if you've only earn't £40k. 

I hope that makes sense.

Edited.

There used to be special forms to fill in (and copies of payslips/ P60's) but as everything now is done online I have no clue how you do it nowdays

Fortune 82nd Minute said:

One of the changes that the financial genius who was our previous Chancellor has introduced is that it will not be possible to hold cash in a Stocks and Shares ISA from next year without paying tax on it.

Does anyone know for certain whether investing any cash in a S&S ISA in a money fund such as the Royal London Short Term Money market Fund is to be allowed?

I believe Martin Lewis looked at this a few months ago. Currently the rules going forwards says that you can hold cash-like funds in your S&S ISA as long as they don't make up 100% of the ISA value. How HMRC will monitor this I have no idea. I expect more clarity on this before April next year. 

jamescafc said:

TelMc32 said:

Rob7Lee said:

TelMc32 said:

I’m in drawdown and the schedule is to draw my £268,275 by 75. So effectively, two tax free elements to my monthly income - the personal allowance and the tax-free pot - and then the rest from the main pot.  Keeping myself under the top tax rate band, but having to be careful with dividends.

Thanks, exactly my thoughts, just to decide on taking it out over what period. As I'm likely to retire early, withdrawal by 75 will be very easy. However there is one added point that will probably make me draw the lot in one go.

In December 2027 I reach 55 and can access my pension, in April 2028 the age you can access your pension moves to 57. I'm yet to get clarity, but from all I can read, if I don't touch my pension before April 2028 I'll have to wait until I'm 57 which is at the very end of 2029. That period is my concern if government were to change any rules (knowing my luck they would on April 7th 2028!) I could be in Limbo.

I'll probably just take the hit knowing that a bit of growth for a few years will be taxed, but I can minimise that to a degree.

Yeah, I retired at 55 so the tax free element is on a 20 year drawdown schedule. My advisor keeps me updated on what they expect to happen, but I went a couple of years before you, so I don’t have to worry about that 55-57 change.  Good luck. 

Out of interest, how do you reflect on retirement at 55?

I’m actually looking to do it a bit earlier but lots of people warning me not to, so curious for your views 

Personally, I don’t regret a single moment.  I spent 36 years in banking, the last two decades as a relationship director looking after professional service firms. The office joke was that I answered emails quicker when on holiday than I did in the office and that I’d miss it.

The bank collected my laptop, phone & iPad at 9am on the Saturday after I’d finished a big deal on Friday evening, my last day.  I haven’t missed them one bit.  I made a lot of friends among colleagues and clients and still see those ones regularly on a social basis.  It’s always the people you miss, so I make sure that doesn’t happen.

As for the rest, as others have said. But the key thing is pretty much what @bobmunro said…it’s liberating and very relaxing to be able to wake up and not have your day mapped out. Don’t feel bad about doing nothing some days, but enjoy yourself and stay active. Find new hobbies or enjoy old ones more than you’ve ever been able to. 

Athletico Charlton said:

golfaddick said:

Athletico Charlton said:

Pension question please.  About the 3 year catch up rule.  If I have had 3 years of small contributions and wanted to catch up a lot over one or 2 years then how does that play forwards?  
Ie in a couple of years time it would look like I had put in a lot more than I am allowed over a look back.
Not sure if that makes sense. Hopefully someone will understand and be able to answer.
Thanks all

I'll try to simplify it using this tax year. 

To "carry forward" unused pension allowance you first need to maximise this tax year's £60k allowance. Then you go back to 2025/26 and use up that £60k allowance, then to 2024/25 and use up that year's allowance & then finally to 2023/24 and use up that years allowance. 

However, you must have enough earned income to do so. ie, you must have earn't / will earn at least £60k this tax year to start the process. You can't simply go back 3 years & put in £100k if you've only earn't £40k. 

I hope that makes sense.

Edited.

There used to be special forms to fill in (and copies of payslips/ P60's) but as everything now is done online I have no clue how you do it nowdays

Thanks Golfie, that but I get.  My question is more, if someone has put say £15K pa into their pension for 4 years straight but earns £180K pa, then in theory they could put ££170K into their pension to catch up the under use of previous years (v £60K allowance).  

If they did that, then in future years they put in the full £60K then on a 4 year period in the next years it would look like you have out in too much (ie you out in £60K a year next 3 years then total for the 4 years would have been £360K.

Assume that isn't an issue as the amount put in was catch up so doesn't cause future problems.

(Numbers made up just to illustrate).

Sorry, I'm not sure what you are asking. Why does it matter what it looks like and to whom ?  HMRC will know you've used  "carry forward" and what years it was spread across. All that matters going forward is that 2026/27 and the preceding 3 years have been fully used. 

paulsturgess said:

Covered End said:

jamescafc said:

TelMc32 said:

Rob7Lee said:

TelMc32 said:

I’m in drawdown and the schedule is to draw my £268,275 by 75. So effectively, two tax free elements to my monthly income - the personal allowance and the tax-free pot - and then the rest from the main pot.  Keeping myself under the top tax rate band, but having to be careful with dividends.

Thanks, exactly my thoughts, just to decide on taking it out over what period. As I'm likely to retire early, withdrawal by 75 will be very easy. However there is one added point that will probably make me draw the lot in one go.

In December 2027 I reach 55 and can access my pension, in April 2028 the age you can access your pension moves to 57. I'm yet to get clarity, but from all I can read, if I don't touch my pension before April 2028 I'll have to wait until I'm 57 which is at the very end of 2029. That period is my concern if government were to change any rules (knowing my luck they would on April 7th 2028!) I could be in Limbo.

I'll probably just take the hit knowing that a bit of growth for a few years will be taxed, but I can minimise that to a degree.

Yeah, I retired at 55 so the tax free element is on a 20 year drawdown schedule. My advisor keeps me updated on what they expect to happen, but I went a couple of years before you, so I don’t have to worry about that 55-57 change.  Good luck. 

Out of interest, how do you reflect on retirement at 55?

I’m actually looking to do it a bit earlier but lots of people warning me not to, so curious for your views 

I retired at 49 and should have retired earlier in hindsight.
What do you do all day everyone says?
The answer is whatever I want to do.

What was your profession CE?

Bank Manager and then Financial Adviser