blonde poker forum

In before arrboy sarcasm  ;D

You will spend your youth enjoying life without a care in the world as you rightly should, don't stop that.....

Suddenly you will hit an age where you think fk, how long do I need to keep doing this shit for before I can sack it off?

Happened to me about 5 years ago and I started to take a more serious attitude to saving for the future.

The moral of the story is to start saving an amount in your mid 20's that may seem a bit painful at the time as it will make your life a lot easier 25 years down the line.

I always saved, but probably never enough because I never thought beyond the next year or two, fortunately I got my shit together about 5 years ago and I now save more as I definitely wasn't putting enough aside before. Paying into a pension is the most tax effective way of saving money.

Have a read of this http://www.bbc.co.uk/news/business-38609422

Yours sincerely, possible future skint pensioner if I don't sort my shit out  ;tk; ;yippee;

''They reveal that even at the age of 25, you need to be putting away several hundred pounds a month''......yeah I'll just sacrifice a roof over my head to stick some money in a pot.

I'm up shit creek without a paddle but I'm very aware in all reality I'm gonna be working until I drop dead :)

I'm pretty sure that for most their salary by the time they hit their 40s will be significantly higher than when they were in their 20s. Their spending will obviously have increased due to kids and all that shit but it should have also reduced because of less drink, drugs and generally fun.

Really can't see the point of saving anything when you're 25. Try to get on the property ladder asap but forget pensions in my opinion.

The long term savings you make by steadily paying off a house whilst it also appreciates in value are enormous. If you buy a house at 25 then by the time you're 40 it's more than half way paid for and you get to re-mortgage at a low LTV. The savings you make there far outstrip the few quid you could've put away in a pension pot.

I've always classed my house as my pension pot since I was in my 20s. It forced me to put money in to bricks and mortar and has put me in good stead now. If you have a mortgage you have to pay it, there's no avoidance. If you have a pension fund you can easily skip a few months to give you an extra bit of blackjack money if you have a bad run.

House first, pension second in my opinion.

Half agree mate.

I would however say that if you save enough early on it grows into a much bigger pot faster for the mid/late years. This is important by the time you get into the later years before retirement. The difference in growth between a 100, 250, and 500k pot if you have say 10% growth is so massive in the final years that it's worth shoving money as much money as you can afford in the early years into it to get to that bigger number for the later growth years.

House first, pension second? Ok maybe for the younger guys who don't know what interest rates will do in the long term, but for me with interest rates so low I'm better off smashing as much into my pension right now and using my tax free lump sum to finish off any final payments.

Half pissed now, so will respond to any more replies tomorrow  ;djinn;

Just marry a rich bitch

my advice..

- don't worry about saving a penny
- spend all money you have and spend it on experiences/meeting new people/educating yourself
- if you do really well between 20-30 and set yourself up you wont have to worry about saving

Something I thought was a bit 'odd', or perhaps just journalists being journalists, in that article they pick on £20,000 as a pension target to aim for because of the report saying that a bit over £20,000 is the average expenditure of a retired household.

But won't most retired households have 2 people in them? At the very least some will. So if that expenditure is for an average of 1.7 people (for example) then the pension they each need goes down to about £13,000 - which makes the extra amount above the state pension seem a lot more achievable. Particularly as I would assume that average expenditure is disproportionately skewed upwards by the extra expenses any retired households have in London.

The way I think about it myself is right now I live on about a grand a month after my bills are paid, my bills are about £300 a month (minus the mortgage). So I have a minimum number I want to get to make sure I get that £1300 a month pension. Any more Is icing on the cake and means I can go on more holidays etc. I don't want to rely on the state pension either. No effing way I'm staying in the corporate game until 67, want to be gone before 60.

Wouldn't surprise me down the line if they start to means test pensions also, another reason why I won't rely on that....

2 of the 3 cover me nicely, no prizes for guessing which one doesn't apply though ;)

I think relatively successful people in their 40s advising people currently starting out in life on a results orientated basis is dangerous based on their situation where they have enjoyed record low interest rates, record property captial appreciation and incredible university financial terms when they went in the 1990s.  

To sum it up for me i went to uni and got paid by the government to go to uni a grant twice the amount of my fully catered hall fees every term with no £9k a year fees to pay and no loans.  I came out of uni with an education and money in the bank and zero debt to start my career.  I basically had the same money again after my bills were paid to get pissed and live on throughout uni.  With a summer job i was able to live a comfortable live as a student, run my own car, foreign holidays every year. I came from a single parent (much rarer in those days) family with my mother earning relatively low wage hence my full grant status.  Kids nowadays wouldn't be remotely able to relate to this.  

Upon graduation in the mid 90s housing price ratio to wages were at a record low in modern times (well under 3/1).  I started out on £14k a year outside of London and could have bought a 3 bed house easily for less than 3 times my salary. Walking into my local bank and getting a mortgage with a decent graduate career and starting salary would have been the formality of all formalities and the bank manager would probably have offered me a bigger mortgage to buy a 4 bed house with.

Within 3 years of graduating my annual salary would have been bigger than said house if i had bought it when i graduated.  What kid can possibly relate to this nowadays unless they are a professional footballer?

I had all the disposable income in the world since i graduated but never once considered paying into a pension in my 20's.  Would i be better off later in life?  Probably.  Spend your 20s investing your money in your talent (s)to earn large later in life doing something you are passionate about.  Don't spend your whole life doing something you hate if you are talented enough to do something you love.  I took a huge pay cut initially to enter the online betting industry because i wanted to spend the prime years of my life doing something i was good at but more importantly loved doing and would it wouldn't seem like work to put in the long hours to get to the level where you are very good at what you do.  I saw it as an investment short term in my future and it would pay off both financially long term but lifestyle wise even more by bouncing out of bed every day loving my job.  16 years on nothing has changed.  It is much much easier becoming successful (and wealthy long term financially) doing something you love than something you don't.  

I am at the time in my life now that i am thinking like Woodsey but stuff like that never crossed my mind in my 20's.  There are so many things you can't do when you are 40/50 with all your money you have saved that you want to do in your 20s.  Get to your 40s and think 'i done all the crazy stuff i wanted to do so it doesn't interest me now' and you will probably avoid the mid life crisis as well that occurs because you spent your whole of your youth and 20s being a nit and planning for your retirement.

How does someone in the 20s nowadays with £60k of student debt, huge rent payments every month even afford to put money into a pension with a normal job as they climb up the career ladder without massively reducing enjoying the prime years of their life?  Paying off your expensive unsecured debts is way more benefical in your 20s than pumping money into a pension (unless you are lucky enough to be a higher rate tax payer that early).  Once you are debt free then worry about pensions.

That's not really advice. Spend all your money, have a great time and get rich.

Yeah this is how I am approaching things ATM especially as interest rates are low. One caveat though is if you can get an employer to match your pension contribution it's tremendously +EV.

I'm like 1 2/3... I just forgot to do the educating part, in point 2 :D

Few thoughts

20s it is probably ok to pay off debt/enjoy yourself.  Would always pay into a pension if your employer has one.
30s I'd save pretty hard.  Either deposit or ISA/Pension.  It doesn't get easier if you have kids.
Don't think the skills you get in your 20s set you up.for life.  The World moves, skills become obselete.  Always try and improve yourself, retrain etc.
Don't do anything that you think is likely to make you unhappy.  If you think your career/life is getting stuck somewhere, move now.
You are likely out of luck with property right now.  Others were lucky in the past, but the World moves etc.

I'm kind of aiming for 20k+, but the sums you have to save are enormous, and most will get nowhere near.  I am not convinced I'll be capable of skilled work at 67, so best get my finger out.

Paying into a work pension up to the maximum your employer matches it to should be the minimum requirement for everyone, you are simply losing money otherwise. Isn't this compulsory these days? Think it might be now....

One thing I will say is you don't miss money you never had unless you are at the bottom end of the pay scale. I have forced myself to increase my pension payment at least 1% every year for the last 10 years or so (sometimes more) and my pay rise will always be more than that, I've never missed those extra contributions because I've never had that income go into my bank.

Bought my house at 30 and am only now properly putting money into pension. I do 10% per month which my employer matches.

Getting the house first was the important part I think. It's already gone up in value name the money being put in isn't burnt rent money.

I can see how for most getting a house would be too expensive. And student debt these days is obscene. I managed to do uni before things became as bad as they are now.

(Removes regulated Adviser's cap momentarily)

1. High rate debt should not be tolerated under ANY circumstances. It's one of the greatest ills of 'civilised' society that the highest rate interest is typically charged to those who are least well off, causing (at least in part) a self-perpetuating cycle of difficulty. --> PAY OFF ANY DEBTS FIRST THAT ARE AT A RATE OF INTEREST YOU CAN NOT FEASIBLY EXPECT TO ATTAIN WITH THE ALTERNATIVE YOU WILL TAKE.

2. People in the U.K. perceive property as the proverbial 'no brainer', but memories are short and often people neglect liquidity risk and the leverage inherent in the investment, both of which can hurt. Recent tax changes have made second (and beyond) property ownership highly punitive for most in a position to buy such properties. The capital appreciation point stands, but I often see individuals far too heavily concentrated towards property. --> BUY THE ROOF OVER YOUR HEAD IF YOU CAN AFFORD TO DO SO BUT HAVE A PLAN FOR WHAT HAPPENS IF AND WHEN RATES RISE.

3. I meet so many individuals that neglect to pay into pension citing either complexity or inaccessibility as their reason. If you are getting tax relief on your contributions (which all do, to a limit) and an employer match then think this one through, if you are a basic rate tax payer you can have £8 in your pocket or £20 in pension. For a higher rate taxpayer £6/£20. For an additional rate taxpayer £5.50/20. The reality is often a little better still though salary sacrifice and NI saving sharing. --> YOU HAVE TO LOOK AFTER THE SHORT TERM, OF COURSE, BUT THERE IS NO BETTER VEHICLE TO SAVE FOR 55+.

4. You can't spend yourself rich. Investment in skill development is different of course, but every £ you spend is a £ you don't have. Senseless expenditure can kill your chance at compound growth.

5. If a self-employed individual aspires to work until 55 then that is around 32 years all told. If said individual works 8 hours per day, but is only productive in 7 of those, they could feasibly expect to retire four years later than their aspiration.

How could 2 people possibly live off £20k even in retirement!?
I mean, are they taking it in turn's to go to Vegas?

Is this 20k figure including what folks get from state pension, or is it state pension + 20k a year private pension?

20k + state and assuming house is paid off seems decent, but I am a northerner.

As an aside, the fact that you are reading and posting in this thread self selects you are somebody who is going to probably be better than average in retirement. Back before I became the worlds greatest pokery writing n that fella, I worked in pensions and it was horrifying how little thought most people had put into this.

Early on a phone call with a customer really shook me up. He joined a company pension maybe 20 years earlier, didn't check up on how it was going once, rang up about four weeks before he was set to retire and discovered he was getting next to nothing on top of his state pension. He started blaming the government, 9/11 and the company I worked for, but (IMO of course) the fact that he just blindly assumed everything was going to sort itself out for 20 years was the culprit.

Most people are not going to get close to a big enough pot for £20k though are they?

If the dream is done at 60 with £20k + state we need over £500k in the pot? Is that right?

Good post Ed.  In my circumstances of paying no income tax legally and having no employer matching any contributions is this the best vehicle for me saving for 55+?  I don't see any advantage of having a pension tbh over just growing my bankroll the way i have tax free/fund manager fee free for years.  Anything else i should be considering over than the tax implications?

I think there are a couple of mentions in the article that suggest that £20k (including the state pension) is ambitious.

Yes, that's correct. You'll need approx £500k in today's money to have an annual pension income (taxable) of c£20k. The state pension of £155 p/wk is on top - assuming that relevant NI contributions have been made during the period. (Making voluntary contributions to this is perhaps something arbboy might investigate, as he will not qualify otherwise, I believe).

Ed's post offers excellent advice. All I would add is that there is no "one size fits all" solution. Everybody's life circumstances are different, as are attitudes to risk and life goals. I've found myself envying those people I've bumped into along the way who seem to have no cares and simply live life day to day and worry about what tomorrow might bring... tomorrow. Before long, though, I realise that not worrying about these things is just not me. It could be you, though ;)

This is something i need to look into tbh.  I worked in UK from 1996 to 2004 unbroken.  Since 2004 i haven't had any paid UK employment and haven't paid any UK income tax or NI since tax year 2004/2005.  During this time i haven't paid any vol NI contributions at all either.  How much will this impact me longer term if i was to start paying the vol NI contributions now?

ARB, didnt you have a pension plan with the company you worked for, i had one with mine ( was there for 8 years after left school ) and always get a letter each year even tho havent paid in since leaving company , i guess/ hope the payments i made back then kept rolling up, as it were. Started my own private one once being self employed.

Forgot to say i have never had any company pension payments either when any of the 3 firms i worked for in the UK.  I know that for a fact there are no hidden pots lying around anywhere that i have forgotten about.

£20K a year now will need to be what £40K in 20 years time due to inflation? So a million needed. Think Woodsey's right about starting to save ASAP.

Not even the accountancy firm (big4 IIRC?) you started at? I'd be surprised if they didn't enrol new starters in a scheme back then. My first job after uni was from 89-95 and we had a Pru company scheme - pretty sure I didn't contribute much back then. Current transfer value is £10k.

http://www.moneysavingexpert.com/savings/state-pensions

Covers everything you need to know. Looks like you can 'buy' 10 years worth of pension credits for £7300 then presumably you can start making NI contributions now to give you a full 35 years by the time you hit 67.

You can then defer by a couple of years and potentially get about £220 per week. Obviously they may not allow this by the time it applies but under current rules you could.

No there was no pension at the accountancy firm (GThornton) for trainees set up automatically.  There was one there which was optional but i never signed up.

I'll doff my own "regulated" cap to that - good post.

This is brilliant.

1. - I wonder how many people out there keep a 'rainy day' savings pot of a few grand whilst at the same time having a few grand on a credit card at 19.9%? Paying off expensive debts can save a fortune. My personal triumph is managing to shift a car loan at 6.9% APR on to 0% credit cards saving myself over £160/month. Takes discipline to do this but the savings can be huge.

2. - I think a first property is a no-brainer as you can't go wrong if you have a roof over your head. Second, third etc. are nowhere near as good as people think especially with the new tax rules on their way. I don't think they're a great pension pot at all now but definitely good to have as part of a diversified pension fund.

3. - Being self employed I always forget about the employer contribution. Are there many employers who would match say a 10% pension contribution? I know I wouldn't.

4. - Pretty sure I'd be rich now if I never spent anything. I'd have had a pretty shit life though.

5. - The amount of times this reality hits me is scary. My personal target is to finish at 55. A recent trip to Vegas that went slightly wrong left me thinking '55 and 3 months it is then...... :D'

We get a fixed 7% employer contribution as long as ours is more than 3.5%. Plus it's done via salary sacrifice so we get the small additional benefit of the employers NI contribution saving.

Individuals who have a genuine, proven mechanism to generate a return on capital are a slightly different kettle of fish to the average punter (pardon the pun). The flip side however would be that if you don't diversify future income-source exposure you are placing total emphasis on your punting. Some people like it this way, others it would scare the life out of.

If paying nil income tax I would suggest an approximate route of...

1. Voluntary NICs to accrue State Pension. Effectively an annuity but at a fantastic rate (versus the annuity market).

2. Personal pension payment of £2,880 grossed to £3,600 by HMRC. Each individual can contribute this even with no relevant earnings.

3. ISA allowance (diversified stocks and shares, not cash please) for £15,240pa.

4. CGT exemption (many neglect to use this) enables realisation of £11,100pa of tax free gains. Similar investments to in your ISA but in 'unwrapped' Unit Trusts.

5. Dividend Allowance - a new one from last April that sees the first £5,000 of dividends free of any taxation. Again, a Unit Trust portfolio is the way to address it.

6. Internationally-domiciled investment bonds (a tax structure, rather than them being actual Corporate Bonds) see gross roll up, i.e. Nil tax on the way. You will pay some tax on the way out, however.

Ed. Regarding number 5, the £5k tax free dividend. If you're not earning any taxable income anyway how does this change anything? Wouldn't it have previously fallen in to their tax free allowance?

Yes although it no longer 'wastes' the Personal Allowance. In this manner you could have the following and pay nil tax:

£11,000 'taxable income' - State pension, rental income etc - sits within Personal Allowance
£5,000 dividend income - separate £5k dividend allowance
£11,100 capital gains tax exemption - completely separate allowance for realisation of gains

Without even getting into tax-advantaged investments etc. etc.

As a financially sensible but also financially illiterate younger person, thanks for all the advice thus far :)



Would add here that this could be a good option come april for self-employed/pokery people: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/508117/Lifetime_ISA_explained.pdf (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/508117/Lifetime_ISA_explained.pdf). I've seen it billed as a pension for self-employed people. In short it acts as a regular isa but you get 25% bonus per year on deposits up to £4k (ie £1k per year) from the government. Then once you're 60/want to buy your first home you get the full amount tax-free. Only for us young'uns though :)

Any thoughts on this vs. personal pension? Or could both be best - say you could save £7k/yr, I assume it would be best to put the 4k/yr into the isa and then the £2880 into the pension to maximise free monies, rather than lumping the whole lot into either?

Woodsey does that £300 include everything?, seems very low to me

Buying a property, if you can, should be a no brainer. Saves you sooo much money, just in the rent each month that you no longer pay.
I used to pay into an NHS pension but stopped when I left the NHS. Saying that, the pension has been devalued significantly in the past 10 years and will continue to do so.

Have a house that I rent out and will be keeping that as an income source in retirement.
I actually cashed in my peps/isas a few years ago to pay off the mortgage on my first house, saved me thousands in interest and the pep/isa earnd fk all in the 10 years I had them.

Problem with pensions nowadays, is so many company schemes have gone tits up, and that will only increase imo.

Just checked, it's actually £370.....

I think people leave some money to one side and keep in debt in case the credit card company shuts them off and leaves them without access to money.

Jeez, really? Council tax, gas, electric, buildings/contents/life/car insurance, TV, phone, water etc.?

No car costs mate, company car, no insurance, no petrol, work pay for life insurance etc . Plus I don't live in a big house, I downsized a few years back because I was rattling around where I lived before. Also I live off company dime half the week when I'm out and about and they pay for at least half of my food/booze etc mon-fri. So I'm lucky in many respects simply because of my job.

Plenty of income tax at 40% though on the BIK of having a company car.  Don't you count that as a cost?  If you didn't have the car your take home pay would be substantially higher so there is a car cost you just don't pay it yourself it just comes directly off your payslip every month to the tax man.  Still incredible fiscal control to spend so little every month on your bills.

We'll I don't because it's taxed out of my salary before I see it.....always has been since I've done a 'proper' job.

I only add up stuff I actually pay each month. Probs saved about £75 a month through Martin Lewis site from about 18 months ago.

Just found video clip of Woodsey at a local restaurant :)




YouTube: http://www.youtube.com/watch?v=U8Kum8OUTuk

Some very good points rased n this thread. 

The only thing I'd like to see is some sort of subject brought in at schools teaching these sort of life lessons.  Too many people haven't a clue what they are doing in terms of planning for life/future. 

I'd argue unless you come from a background where your parents were financially savy and grounded you well you are at an even greater disadvantage. 

I speak tp people evry day in appointments and they vastly underestimate how much they are spending.  It's alarming but once you challenge them on it and they stick to their guns there isn't much more you can say/do.  On the otherhand those who are completely honest often get screwed over as well. 

Agree with this 100% and I think it's disgraceful that there isn't something in the curriculum.

I mean don't get me wrong it's obviously vital that kids know how many wives Henry VIII had but it would also be handy to know that by switching to a different energy provider they could save themselves £400 a year.

Martin Lewis has been pushing for financial education in schools for years, spent a lot of his own time and money badgering the government about it.

Sadly I don't think it would work, human beings are naturally very bad at predicting the future and it's only hard life lessons that seem to shape what somebody will be like financially. People with money think it will never end, people without money think fuck it what's the point, it's only when you have a major life lesson you change (IMO of course). My missus was the worst with money and it was only when she had debt collectors chasing her did she sort her life out (thanks to Martin Lewis btw), I was pretty crap with money too but when my Dad passed away I suddenly realised I was on my own and I got good with it.

Some people are naturally good obviously, but I think it takes bitter experience to change somebody's attitude towards it.

I typically think that people need a tangible, attainable goal that they attach value to in order to make progress / change. (Which is basically what you say above)

1. Skint and no chance of that changing --> why bother / what's the point / what difference will it make attitude

2. Rich and 'no chance'  of that changing --> why bother / what's the point / everything is good already

3. I perceive a goal I feel I can hit that would really mean a lot to me --> how much do I want it / what will I sacrifice or do extra / when can I get there

***

Often it takes a serious life event to drive people from 1/2 to option 3.

Definitely agree that they should teach financial education at school. It will be the most valuable life lesson kids will learn. I had to learn everything from moneysavingexpert, but thank god for Martin Lewis as I have saved a fortune thanks to his tips. Hope he gets knighted soon for his services to the U.K. 

+1, IMO he has done more good that most of the folks who get knighted combined. Can you believe there are some (wrong) people around these parts that don't like him?

Well, there's always bitter or hyper-cynical people out there. You kind of have to feel sorry for them. Don't get me wrong, Martin Lewis is quite annoying as a TV presenter, but he's saved/reclaimed millions for people versus the banks/corporations, and is still looking for the next cause to fight, as a multi-millionaire.

Some people just get the hump with him.

Agree he's been excellent with his advice/ website.

Plus all the stuff he has done for mental health causes and vulnerable people.

I must admit I roll my eyes at his antics on TV, but his Radio 5 podcast is excellent for those of us who are little bit more into personal finance.

Not everyone can afford to save as much as they’d like (or need) each year, but putting a little something away every month is better than doing nothing.


The earlier you save, the more time your money will have to grow. Saving just £100 a month from the age of 25 would result in a pension pot of £152,602 at the age of 65,

Delaying retirement saving until age 30 would see the fund value at 65 drop to £113,609 — and leaving it until age 40 would mean a further reduced fund value of £59,551. These figures are based on growth of 5%.

Yup, good point well made. Something is waaaaay better than nothing.

They are also changing the age at which you can claim any of your pensions so you have to ask yourself when do you want to stop working?

Currently you can take you pension at 55 as a minimum, this is going to change to 10 years before your state pension date. That for a lot of people is going to be 68 meaning you cant access your own pensions until 58. How many of you want to retire at 60? I'd imagine a high amount of builders etc would like to retire as early as possible, to do this you need a income for those 8 yrs until the state pension kicks in.

People say about paying mortgage of as early as possible but why? if you're paying 2% for a mortgage and can get 10% on a investment / pension why are'nt you plowing as much  possible into that and keep the mortgage for as long as possible.

People also say they are going to use their Residential home as a pension, look at the facts how long is that going to last ... ?

Say your property is worth £300k is 3 bed semi detached in a nice area, you've lived here 20 yrs ad loved it.

Are you going to want to move out of that area? Most likely no, you know he area you like it, your friends are there so you'll probably stay in the area.

You had a nice house so now you want to downsize and get a smaller flat, say 2 bed, that's still going to cost you £175 -200k.

After fee's you've got £120k max. Now you spend a little, help kids out, go on holiday and replace the car. You've now got £80k left and you're 68. You now have £80k to last you on average 15 yrs giving you £5k per year without growth. Is this enough for you to live on?

I know what i'd prefer to do, stick what you can away whilst staying at folks house rather than blowing it. Put what I can away whilst getting on the property ladder and then push as hard as possible in my later years.

Age of working is an important thing. I never gave a second thought to it until probably my late 30's, now I have reached mid 40's there's no effing way I want to be working into my 60's. I appreciate that a few people love their work or won't have the choice not to work until state pension age, but across all my peers my age virtually all of them think the same as me.

So even though it may not even be crossing your mind now it probably will be when you reach my age. So we are back to save something if you can rather than nothing, it will pay big dividends down the line 20 years later.....

Really looking forward to 'Future Woodsey' posting in 2032 that he has blown his pension fund and had to go back to work.  :D

This. It's frightening how many people I know who think their family home is going to produce a significant income. Only going to work if they sell up in leafy suburbia and move into a 1 bed flat on a sink estate.

lol, reckon I might do a bit of easy work locally couple of days a week to keep active and for a few extra quid, the real target is getting out of the corporate hamsterwheel lifestyle and having choice  ;D